Carol Huang
Jul 21, 2020

China ad spend will drop 2.8% in 2020: GroupM

Online advertising will contribute 80% of total ad spending in China this year, according to a new forecast from the WPP organisation.

China ad spend will drop 2.8% in 2020: GroupM

China ad spending will drop by 2.8% year-on-year in 2020, according to a new industry forecast from GroupM.

Total spending in China will be RMB 626 billion (US$89.6 billion). Although China is suffering from a spending decrease, the market will turn in performance far better than the 11.8% drop expected globally.

About 80% of the ad spending in China will be online, mostly allocated to e-commerce, social media and programmatic advertising. Programmatic advertising will see the fastest growth in 2020, with a 25.2% jump. Ecommerce will see 20% growth in spending in 2020, and another 16.8% in 2021. Social media will see 15.1% growth in 2020, but will slow to 8.7% year-on-year growth in 2021.

Online advertising's gain is TV's loss. Affected by the pandemic, TV advertising spending will fall by 18.4% in 2020. It remains to be seen whether the Tokyo Olympics and other sporting events will bring audiences back in front of the TV screen.

Among categories, internet services still spends the most on advertising: a total of RMB 11 billion (US$1.6 billion) between January and May of 2020. However, this figure is 24% lower than the same period last year. Electronic devices, financial services, education and medical services are among the categories exhibiting the most rapid growth in ad spending.

"Advertisers focused on the conversion rate after the pandemic," said Fang Jun, director of GroupM's intelligence department. "Technology-based advertisement distribution will be under the limelight for a long time as it can provide exactly what audiences want." 

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