TV ad share falls below half in China

Warc, 16 September 2014

SHANGHAI: Television's share of advertising expenditure in China is predicted to drop below 50% for the first time this year, continuing the downwards trend of recent years.

Forecasts from media agency GroupM showed that television will take 46.8% of adspend in 2014 and 43% in 2015, down from 50.3% in 2013 and 54% in 2012.

But the total amount spent on TV is expected to edge upwards this year – by around 2.0%, as GroupM said the overall market would grow by 9.8% during 2014 to reach RMB 473bn (US$ 77bn). It anticipates even faster growth in the total market in 2015, of 11% to RMB 525bn, although growth in TV spend will remain low.

Apart from the internet, the share of all the major media was projected to decline in 2014: radio from 2.9% to 2.7%, newspapers from 9.5% to 8.0%, magazines from 2.2% to 1.9% and outdoor from 9.6% to 9.2%.

Actual spending was falling at newspapers and magazines, but growing at radio and outdoor, helped by increased car ownership in the case of the former and wider digitisation for the latter.

Online advertising, however, was going from strength to strength, its share up from 25.5% to 31.4% in 2014 and a predicted 37.5% in 2015, and spending growing by around one third each year.

"The internet continues to play an increasingly important role in China and the biggest revolution currently underway on the internet is the shift to mobile," said Andrew Carter, president of trading and knowledge, GroupM China.

"Traffic to social networks, online video sites, and search are all beginning to cross the 50% mark," he added, and he expected that brands would react by diverting more adspend into cross-screen mobile search and mobile video campaigns, at the same time as spending more on hero app ad buys and in-app ad networks.

GroupM also noted that ecommerce search ads contributed the largest share of internet advertising spend, as brands recognised the power e-commerce sites exerted as a 'medium' in their own right while also being driving traffic and sales to their online flagship shops.

Release end-July, Warc's Consensus Ad Forecast, a weighted average of industry forecasts, found advertising expenditure in China will grow 11.1% and 10.3% in 2014 and 2015 respectively. TV adspend is expected to grow 5.0% this year, while digital will grow some 30.0%.

Data sourced from GroupM; additional content by Warc staff