GroupM's predictions are drawn from data supplied by parent company WPP, as well as CTR and iResearch.
Television will still dominate adspend with an estimated US$36 billion (RMB 221 billion) for 2013, representing a 51.4 per cent share of all expenditure. In terms of category spending, the top
five categories have not changed: toiletries, business & services, beverages, pharmaceuticals and foodstuffs.
In particular, CCTV has steadily accounted for one tenth of total television adspend in China, and is not expected to change in the coming two years. Its most recent annual ad-sales auction achieved a new record in November 2012, demonstrating advertisers’ confidence in this platform. GroupM predicts the growth of CCTV adspend to be 5.5 per cent this year and 6 per cent next year.
However, the share of TV has been declining over the past seven years, from 65 per cent in 2007 to forecasted 48.5 per cent in 2014, due to gradual encroachment by online video.
Two important reasons for this are that nearly all content available on Chinese TV can be seen online, plus TV stations often partner with video sites on promotions.
Nevertheless, online video will not be able to drive the doubling of adspend growth seen in 2012 due to insufficient pre-roll inventory, particularly in China’s most developed cities. The number of online video viewers will also hit a saturation point in 2013, according to GroupM.
Internet will be enjoying rapid adspend growth of 36 per cent and 34 per cent this year and next respectively on brand picture ads, search engine ads, text link ads, rich media ads, email ads, and others.
In comparison, the momentum of out-of-home (OOH) adspend will decline. In 2012, OOH adspend increased 17.5 per cent, benefiting from deeper OOH penetration in tier-two and -three cities. GroupM predicts this growth will slow down this year to 9.7 per cent and 9.3 per cent next year, since the development of OOH media depends on the creation of interactive, interesting content and its combination with appropriate technology.
Mobile advertising is growing at a startling rate as the scale of mobile internet users expanded further to 74.5 per cent of overall internet users. Meanwhile, Chinese consumers are spending more and more time on their tablets, which tend to be the first choice for many forms of entertainment.
The positive forecasts are set against a backdrop of Chinese GDP growth, which the International Monetary Fund (IMF) predicts to be 7.8 per cent in 2013 (same as 2012) and 7.7 per cent in 2014.
Nielsen's Q1 2013 data also show that the Chinese consumer confidence index reached 108 points, which is 15 points higher than the global average. This, and a stable environment for economic development form an excellent foundation for China's media market, according to GroupM.
From a government policy perspective, a SARFT (State Administration of Press and Publication, Radio Film and Television) circular in January 2013 has encouraged radio and TV stations to combine with the internet, mobile communication networks and other new media to develop new forms of media organisations, in the hope that a new media landscape will be created in three to five years.