China's advertising spend gaining momentum

China's advertising market is expected to rise 5.4 percent to 607.5 billion yuan (US$95 billion) in 2018, the second largest behind the US, while the global market is set to rise 3.6 percent, with the Winter Olympics and other events expected to stimulate ad spend growth, according to Dentsu Aegis Network’s latest Ad Spend Forecasts.

Digital media channels will continue to power ad spend growth and are estimated to add 12.6 percent annually this year to reach US$220.3 billion, versus the 15 percent of growth last year. It’s expected to account for 38.3 percent of total ad spend versus TV’s 35.5 percent.

“In many markets, disruptive innovation — from mobile, voice activation and new ad tech players — is still providing new sources of growth and we forecast this trend will continue into 2018,” commented Jerry Buhlmann, CEO of Dentsu Aegis Network.

China is expected to contribute to 15.2 percent of worldwide advertising spend and is forecast to grow by a further 5.3 percent in 2019, driven by digital and out of home media spending.

In China, digital advertising spend is forecast to grow at 15.9 percent this year to reach RMB 365.9 billion, accounting for a significant 60 percent share of total ad spend.

Three top Chinese Internet giants, namely Alibaba, Baidu and Tencent, will dominate digital ad spending and together account for 64.1 percent of total digital ad income, while online video is the fastest growing ad format, a predicted 31.3 percent in 2018.

Phil Teeman, CEO of Dentsu Aegis Network China, added: “China is at the forefront of digital disruption with the pace of change accelerating and we must continuously transform our business and the spectrum of services that we offer our clients, harnessing the spirit of innovation.”

Globally, mobile advertising’s expenditure has already overtaken desktop as the biggest contributor of digital spend in 2017, which will continue to gain momentum in the coming years.