Ad market expected to rebound after 11.6% fall in 2020

Ding Yining
CTR Research finds IT products and services the only category in the top 10 to saw an increase in ad spending last year as many turned to digital services during the lockdown.
Ding Yining

China's ad market is expected to rebound after falling 11.6 percent in the past year due to pandemic restrictions and cautious business sentiment, CTR Research said.

"Due to the relatively low base in the early months of 2020, this year ad spending is very likely to pick up steadily," it said.

The ad market has started to show a month-on-month improvement since April after promotional activities spurred ad spending.  

But the total ad budget still falls behind compared with 2018 and 2017 when it recorded a 2.9 percent and 4.3 percent annual increase.  

IT products and services is the only category in the top 10 categories that saw an increase in ad spending last year, rising 46.9 percent from a year earlier as many turned to digital services during the pandemic lockdown.

Entertainment and leisure activities, commercial facilities and transport suffered the most.

Companies in the food and beverage sector remain big advertisers but with relatively mild growth — at an annual increase of just 0.4 percent in 2020.

Digital services tend to favor TV and outdoor channels to impress potential customers as a string of new service launches and listing prompted marketing budget increase.

A recent survey by GroupM's media agency Essence with more than 50 marketers and ad executives shows that the majority expect consumers to spend more time in the virtual environment, more use of biometric data and an irreversible trend toward subscription services.

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