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China ad market up 9.8 per cent but dominance of TV and growth rate of digital decline

Ad spend in ChinaAd spend in China is projected to reach RMB 473 billion (US$77 billion) this year – an increase of 9.8 per cent – according to forecasts by media agency GroupM.

But while the market is growing briskly overall, spend on China’s dominant medium, television, has fallen proportionately, the growth rate of online ad spend is showing signs of slowing down, and newspapers and magazine continue to lose share at a more rapid pace.

TV’s share of China’s ad pie is expected to fall below 50 per cent for the first time this year, dropping to 47 per cent of spend but still growing in terms of actual spend.

The growth rate of internet ad spend is expected to reach 35 per cent this year, and slow slightly to 33 per cent next year.

Andrew Carter, president of trading and knowledge, GroupM China, said: “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. Traffic to social networks, online video sites, and search are all beginning to cross the 50 per cent mark. In 2014, brands will attempt to keep pace by funneling more advertising spend into cross-screen mobile search and mobile video campaigns. Mobile display will also continue to ramp up as brands spend more on hero app ad buys and in-app ad networks.”

Newspaper ad spend is expected to decline by 7.3 per cent this year and 9.5 per cent in 2015, while magazines will reverse by four per cent this year and six per cent next year.

China’s ad spend growth tracks with 7.4 per cent GDP growth for this year, according to the International Monetary Fund.

Ad spend in China is expected to grow even faster next year, with an 11 per cent increase, to RMB 525 billion, predicted.

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