The news: China’s Q4 ad spending increasingly flowed to a small group of large digital platforms, accelerating consolidation across the market, per our Q4 forecast.

• Commerce-linked ecosystems captured an outsized share of ad budgets as marketers prioritized environments that unite media reach, first-party data, and transaction capability.
• But gains were uneven: Platforms that converted competitive pressure into stronger monetization captured incremental spend (such as Alibaba via higher merchant service fees), while discount-driven ecosystems delivered weaker ad efficiency, weighing on players like Meituan and PDD.
• Short-form video and in-app performance placements outpaced other digital formats, while standalone content platforms struggled to attract incremental dollars.
• Smaller publishers and long-tail apps saw limited benefit from Q4 spending, even as overall digital investment rose.
• Advertisers pulled back on cross-platform experimentation, instead concentrating spend with fewer partners that offer scale and measurable returns. Those partners benefit from faster campaign iteration, supported by stronger measurement and AI-driven optimization tools, such as Tencent’s AI-enhanced performance advertising capabilities.
• Offline media and fragmented digital inventory continued to lose relevance as buying decisions prioritized efficiency and operational simplicity.

Why it matters: Q4 marked a turning point where ad growth reinforced existing power structures rather than redistributing opportunity across China’s media ecosystem. As one of the largest regions for ad spending worldwide, the country’s performance ripples out into the global ad market.

• Consolidation reflects advertiser behavior under pressure: Fewer platforms allows teams to reduce complexity, sharpen measurement, and enable faster optimization. Aggressive AI investment across Alibaba, Tencent, Baidu, and Kuaishou is reinforcing this shift by improving targeting and campaign automation.
• This shift raises the barrier to entry for emerging platforms, which now face greater difficulty convincing brands to test new inventory.
• Media owners without embedded commerce, payments, or first-party data are increasingly exposed, particularly as advertisers favor closed-loop attribution.
• For global platforms and adtech vendors, China’s trajectory offers a preview of how ad markets behave when growth returns cautiously rather than exuberantly.
• Our forecast suggests this pattern could persist into 2026, even if total spending improves, as habits formed under constraint tend to stick.

Key takeaway for marketers: China’s Q4 results signal that scale and integration matter more than reach alone. Marketers should prepare for:

• Budget concentration to intensify competition between dominant platforms, even as consolidation persists amid shifting channel priorities. Reduced leverage in negotiations with top-tier media owners.
• Diminishing returns from fragmented or niche inventory without clear performance proof.

Diversification remains important, but the bar for testing new platforms is rising sharply. For brands operating in China, winning attention increasingly means working within a smaller set of ecosystems that control discovery, engagement, and conversion. Our Q4 data suggests that consolidation is no longer a side effect of slower growth; it is becoming a defining feature of how ad dollars move.