Ad spend in China to grow 14.6pc in 2010 – eMarketer
Strong Growth Expected in China’s Advertising Market
Advertising spend across all media in China is expected to grow 14.6pc to US$33.64bn in 2010, according to a new report from eMarketer.
And the market intelligence company is forecasting further growth of 14pc next year, 19.8pc in 2012, 14.1pc in 2013, and 13.3pc the following year, to result in total advertising expenditure of US$59.38bn by 2014.
Driving Factors: Rapid Expansion of the Online Consumer Market
Much of the growth is being driven by China’s rapidly expanding online consumer market. eMarketer estimates that by the end of 2010, the country will have 518 million internet users and 116.7 million broadband households. By 2013, there will be 840 million internet users and 179 million broadband households.
Advertisers are expected to spend US$3.7bn on internet ads this year, up 37pc from US$2.7bn in 2009. By 2014, online advertising spending in China is expected to reach US$9.5bn.
Rise of Search Advertising
“Traditionally, advertising in China required tailored, culturally specific campaigns that had to be placed with a large number of individual carriers in different regions,” said Michael Froggatt, eMarketer analyst and author of the new report, China Ad Spending Overview. “In contrast, the internet represents a direct line to a well-connected, young and increasingly affluent consumer segment.”
Growth in Online Display Advertising
Froggatt’s report finds that while display advertising has a 48pc share of the online ad market this year, search is driving much of the growth. As businesses like Baidu attract more marketers from China and overseas, spending on search ads this year is expected to grow 52.7pc to US$1.44bn. By 2014, search’s share of the overall market will grow to an estimated 44.5pc, up from 38pc this year.
Online display advertising, meanwhile, will grow an estimated 34.2pc to US$1.78bn this year.
“As Baidu, Google and other entries to the market continue to refine and simplify the online ad buying process, it’s created a leveling effect for the advertising market in China,” Froggatt said. “Now older, more traditional Chinese brands are being forced to increase investment in advertising as they find themselves competing with global brands locally.”