Investment in Social Media Advertising on the Rise in China

The number of Chinese users logging into social networks on their mobile devices has been steadily growing over the past year. According to a new report by iResearch titled, “China’s Innovative Social Networking Marketing Report,” there were more than 346 million monthly active users via mobile as of March 2016 and 458 million desktop users.

As a result, 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.

Businesses are also investing in social media advertising. 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.

The study points to the social networks’ large base as a tool for marketers to reach and engage targeted groups, interests and demographics.

Marketing analysts agree social media marketing has potential as the industry is maturing in China. In a recent South China Morning Post article, Cindy Liu, an analyst for eMarketer, said advertisers in China will account for 16 percent of all social network ad spending globally in 2016.

“Many of the social networks in China are still in very early stages of monetization,” Liu said, referring to their commercial potential. “Along with the growing middle class and a generation of young consumers, spending per social network user is expected to rise rapidly.”

The iResearch report notes that Facebook, Twitter, Weibo, Qzone and WeChat Moments have “huge growth potential” as users continue to move toward mobile.

Companies Investing More in WeChat Platform

WeChat, a multifunctional mobile app with more than 700 million mobile users in China, is one of the more attractive platforms for business advertising. The “2016 WeChat Impact Report,” a joint effort by Tencent Penguin Intelligence and China Academy of Information and Communications Technology (translated by WalktheChat), found the app has more than 560,000 businesses with official WeChat accounts.

The data shows more than 64 percent of the operators invested in their own public accounts, up from 53 percent last year – and businesses plan to spend more on the platform this year.