Media consulting firm Ebiquity has released China's 2023 media placement inflation figures. It predicts net media inflation for commonly used media platforms in China will remain below 3% in 2023.
Across each category, Ebiquity forecasts that China’s digital media net cost inflation will hover from 3% to 3.5%. However, traditional net media inflation is expected to be softer from 0 to 2.5%, and print media buying cost will drop by 4.2%.
Stewart Li, managing director of Ebiquity China said China’s lowered 2023 GDP forecast from 5.3% to 4.5% in September led to another soft outlook for the advertising industry next year.
Li recommended that advertisers “implement a proper media cost management program with their media agencies so that they can negotiate for a tough 2023 media buying cost and KPI”.
Meanwhile, Ebiquity also calculated that the real media buying cost inflation for leading advertisers in 2022 is standing at 2.5%. Digital real media buying cost inflation for commonly used platforms is between 2.5% to 3%, and traditional media cost ranges from -3.5% to 2.3%.
Due to restricted GDP growth, the Zero-Covid policy and lockdowns, Ebiquity executives conceded that 2022 has been a tough year for the Chinese advertising industry.
Ebiquity also revealed a 10% to 15% (in some cases more) cut in media spending by leading advertisers in China.
Li pointed out that the budget cuts have impacted multinational and local media agencies alike, with some international agencies were forced to announce layoffs in 2022. Data from the first half of 2022 financial reports shows that revenues at the top locally-listed advertising companies’ declined or had only soft growth year-on-year.
Research by Ebiquity and the World Federation of Advertisers (WFA) also suggests that leading global advertisers will impose tighter budget controls in the coming year.
According to their new global study, in the Asia-Pacific region (including China), 35% of those surveyed plan a slight increase in advertising budgets, with 15% planning for a slight decrease. Half of the respondents will maintain spending, but none will increase advertising spending significantly over 10% next year. Compared to other global regions, APAC and China budgets may be in a more positive position.