Digital Channels Account for 40% of Advertising Spend in China

Digital channels now account for nearly 40 percent of advertising spend in China, according to a recent study by iiMedia Research, a Hong Kong-based consulting agency in the mobile internet industry.

Of that nearly 40 percent, businesses in China are devoting 21 percent specifically to mobile advertising. The other top channel is television (32.4 percent), and the rest of the landscape is fractured across multiple distribution channels (i.e. newspaper, radio, magazine).

The study, which is based on iiMedia Research’s proprietary data, uncovered that many more companies are leveraging DSPs (demand side platforms) for marketing and advertising. The data shows the market size is currently 23.5 billion yuan (US $3.45 billion) and is anticipated to grow to 47.19 billion yuan (US $6.9 billion) in 2018. Mobile DSP advertising currently accounts for roughly half of the total market.

“As DSP becomes more accurate and the targeting more precise, the medium will be more popular for advertisers,” wrote the authors of the study.

Businesses in China are investing more in mobile “in-feed flow” advertisements; this type of ad is based on user browser history and their needs, and also can precisely define the users who are interested in a company’s products or services.

In-feed flow ads are a preferred marketing tactic for 55.6 percent of companies in China.

Traditional image display advertising (46.6 percent) and mobile search advertising (31.7 percent) are the second and fourth most preferred advertising channels.

Social Media Advertising Investments on the Rise in China

According to a report published earlier this year by iResearch titled, “China’s Innovative Social Networking Marketing Report,” the number of social media users logging in from the mobile phone has grown significantly over the past year. As of March 2016, there were more than 346 million monthly active users via mobile and 458 million desktop users.

In an effort to be where their customers are, businesses are joining social media networks to leverage the large audience as a marketing opportunity. For example, Weibo, a platform similar to Twitter, grew from 740,000 verified business accounts in 2014 to nearly 1 million (960,000) in 2015, the report found.

Investment in social media advertising has followed as well. The iResearch study found the social media revenue of China’s social networking advertising was 13.82 billion yuan (approximately US $2.07 billion) in 2015 and projects revenues to reach 40 billion yuan (US $6 billion) by 2018.