Advertising spend in China to fall by 2.8%

Ding Yining
GroupM report predicts 11 percent rise in online advertising next year because of the dominant role that the digital economy is playing in everyone's daily life.
Ding Yining
Advertising spend in China to fall by 2.8%

Advertising spend in Chna is expected to see a loss of 2.8 percent this year. 

China's advertising spend is expected to suffer a 2.8 percent loss this year, with a total size at 626.2 billion yuan (US$89.5 billion), while the global market expects an 11.8 percent fall, according to WPP's media investment arm GroupM.

It said Internet advertising accounts for nearly 80 percent with the dominant role digital economy plays in daily life.

Spending in this sector is expected to climb 4.2 percent this year and 11 percent next year, the only one to see an annual increase, as more businesses rely on digital channels to reach consumers. 

Traditional television advertising expenditure is expected to fall by 18.4 percent this year.

The Tokyo Olympics and the UEFA European Football Championship next year will revive spending on TV ads with an estimated rebound of 1.5 percent.

5G technology will also usher in new models of interaction between audiences and TV content. 

The outdoor advertising market, following last year's weak performance, will be hard hit due to travel restrictions imposed after the COVID-19 outbreak, and total spending is set to be 27.4 percent lower though community level outdoor ads are still a valuable advertising channel for lifestyle service providers and Internet companies.

In 2021, the out-of-home advertising market is set to see a rebound of 4.4 percent. 

Traditional outdoor media formats will also take advantage of technological advances which are the most likely breakthroughs for outdoor advertising to offer integrated online and offline marketing. 

"Advertisers will focus more on conversions of performance advertising, and technology-based precision delivery will be a point of interest for quite some time," said Zod Fang, head of GroupM Knowledge. 

"Consumers are showing more and more loyalty to content instead of channels and brands need to continuously penetrate into markets outside big cities as well as different audience segments in order to expand their market presence," he said.

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