R3 surveyed over 50 of China’s top marketers and media agencies and produced an aggregated result looking at both ratecard and projected net inflation. Inflation forecasts were divided into two sections: national inflation and local inflation for the top 24 cities in China.
The overall insight is that real inflation will continue to rise in high single digits above the 3 per cent consumer inflation forecast for 2015, although some variances exist. China’s net media inflation will see increases of between 5 to 11 per cent for most main media, with TV leading the way at 11 per cent.
According to Chris Lo, senior consultant at R3, this is the smallest increase in the last five years. However, given the historically dynamic industry in China, media inflation is still at high levels versus consumer goods costs.
“If China continues this slowdown, then this gap has to close,” he added.
In addition the study analysed all key media in China such as TV, newspapers, magazine, out-of-home, digital and mobile.
Out-of-home was split into building, LCDs, railway and bus transit media while digital included portals, search engine, video, social networks, Weibo, network communities, instant messenger, AD Alliance/Network and vertical channels.
Using this data, the study benchmarked changes in investment patterns for 2015, showing that TV’s growth has curbed at the expense of mobile, digital and even outdoor, which has become heavily digitised.
Lo observed that the real pressure is going to be on print, which is seeing a 9 to 11 per cent decline in overall investment whilst remaining inflated at 5 to 6 per cent. “Expect to see this sector under pressure through the year,” he noted in the report.
Regarding digital media, marketers and agencies are forecasting different rates of inflation across categories.
As online video continues to prove itself as a viable option to TV, net inflation rates here are anticipated at a much higher rate than ad display.