China's advertising market ends positive
China's advertising market is set to end on a positive note this year with generally stable economic operation and a strong rebound in the consumer market.
Globally, the ad market is set for a milder decline compared to mid-year expectations, according to an outlook unveiled by a major advertising network.
China is an exception among major countries with an estimated annual growth of 6.2 percent instead of a previous estimate of a 2.8-percent dip this year, according to GroupM's year-end forecast "This Year Next Year.”
Global advertising weathered the storm relatively well and is set to end this year declining by “only” 5.8 percent to US$578 billion, excluding US political advertising.
That was much better performance than a June forecast of an 11.9 percent decline, but still a sharp fall from 2019’s 8.7 percent increase.
It also raised the 2021 outlook for the global advertising market from a June forecast of 8.2 percent growth to 12.3 percent.
The global ad market in 2009 declined 10.9 percent following the global financial crisis.
The other major markets including the US, Japan, the UK, Germany, France, South Korea and Canada are set to retreat at least 2 percent this year.
Next year it expects a global level growth of 12.3 percent with China leading the way with a 15.6-percent advance.
There's also widespread expectation that digital advertising will grow faster than previously anticipated.
New consumer behavior forced businesses to rapidly adapt to e-commerce models, and greater dependence on e-commerce will also encourage efforts to directly connect marketing activity with purchasing decisions, leading to greater spending on digital advertising.
Gordon Domlija, chief executive of WPP's media investment unit Wavemaker China and president of the Asia-Pacific region, said China continues to make up nearly 50 percent of the agency network's total business in the Asia Pacific region.
He said there's still a sense of upbeat sentiment among advertisers instead of hesitation. However, ads budgets are under more scrutiny to deliver solid results.
"There's no lack of budget spend but rather the issue of how to allocate that," he said in a recent interview.
As marketers are relying on multiple channels to deliver growth, they need to gauge effectiveness of the customer journeys across different ecosystems, he noted.
Established digital platforms such as Tmall and Tencent's social sites still play crucial role in generating awareness, but it's time for markets to realize "not to put every egg in the same basket," he added.
Digital advertising is expected to grow by 8.2 percent this year, following nearly a decade of double-digit growth, the GroupM study shows.
Television advertising will decline by 15 percent before rebounding to grow 7.8 percent next year.
IPG Mediabrands' media investment and intelligence unit Magna also noted that digital media resilience was even stronger than expected with an 8-percent advance globally, possibly because of the changes brought by COVID-19.
Magna now sees global media owners’ advertising revenues dropping 4.2 percent to US$569 billion, a milder fall than the 7.2 percent estimated in June.
“We believe the return of consumer mobility, major events and economic recovery will prompt most industry verticals to grow their linear advertising budgets in 2021, but the long-term trajectory has shifted even further toward a digital-centric marketing environment for years to come," said Vincent Létang, executive vice president of global market intelligence at Magna.
