China is no exception when it comes to the growing significance of mobile advertising. In fact, mobile is on track to becoming the leading ad spending channel in China.
That’s the take from a fresh forecast from eMarketer which suggests that by 2021, nearly 60 percent of total media ad expenditures — and up to 82 percent of digital ad spending — will be moving via mobile.
“The growth in mobile ad spending in China has been propelled by the BAT companies—Baidu, Alibaba and Tencent—which combined will take in nearly 72 percent of all mobile ad expenditures in China this year,” according to the forecast. “Digital ad spending in China increased by 27 percent this year, reaching just over $50 billion and accounting for nearly 60 percent of paid media spending.”
All of this will involve more spending on video, a worldwide phenomenon not limited to China. It’s still a small percentage of total digital ad expenditures there, but growing exponentially. Video ad spending is expected to rise 35.8 percent this year to reach $7.80 billion. Goosing the robust growth rate are factors including better-quality video content and a larger supply of ad inventory.
“Ad spending in China continues to shift rapidly toward digital formats, fueled by rising time spent online and greater advertiser spending on mobile formats, especially on video and social media,” said eMarketer forecasting analyst Cindy Liu. “We think this trend will persist in the coming years, especially as publishers continue to introduce new and innovative ad formats and improvements to data technology.”
The big players will reap the benefits. Alibaba will draw almost one-third (31.9 percent) of China’s digital ad spending this year—a figure equal to $16.04 billion. Tencent, China’s largest online entertainment and social network and the fastest growing company in terms of revenues, will earn $6.02 billion in digital advertising revenues in 2017, a 59.1 percent year-over-year increase. Baidu will remain ahead of Tencent in terms of ad revenues, but will continue to be affected by new online search advertising regulations that took effect in September 2016. The company is expected to generate $9.31 billion in digital ad revenues in 2017, up 14.4 percent over the previous year.
“Stricter standards for internet advertising has weighed heavily on Baidu’s search business, while Tencent continues to see robust advertising growth from WeChat,” said Liu. “We expect ad revenues for Baidu and Tencent to be neck-and-neck through 2021.”