Mobile ads to overtake wired-internet ads by 2019 in China: PwC

Highlight from PwC's Global Entertainment and Media Outlook for 2017 through 2021.

Mobile ads to overtake wired-internet ads by 2019 in China: PwC

Mobile internet advertising revenue in China is set to overtake wired internet advertising in 2019, while Hong Kong's mobile internet advertising will surpass paid search over the same period, according to PwC's Global Entertainment and Media Outlook for 2017 through 2021. 

The PwC forecast predicts that mobile internet advertising in China will increase from US$15.4 billion in 2016 to US$38.7 billion in 2021. As the regional internet advertising powerhouse and the world's second largest internet market after the US, China's total internet advertising revenue is projected to grow at a 12.6 percent compound annual growth rate (CAGR) to reach US$68 billion in 2021. Japan and South Korea are the region's second- and third-largest markets. 

The PwC forecast notes the importance of Tencent's WeChat platform in driving China's mobile-advertising boom. With around 900 million users globally, WeChat boasts that more than half of its Chinese users spend over an hour a day on the platform, while nearly a fifth spend more than four hours a day. 

"Mobile advertising will continue to dominate internet advertising spend," Sandy Xu, PwC China TMT partner, said in the report. "The wide consumer reach makes mobile a truly valuable marketing platform. But for content owners, success hinges on monetising users and content for new revenue streams, especially on social-media platforms.”

Video dominance

In Hong Kong, mobile video internet advertising is the fastest growing sub-sector over the next five years, with a CAGR of 29.2 percent. This category recorded US$41 million in 2016 and is expected to be worth US$146 million by 2021. 

The PwC report attributes the robust mobile video advertising growth to Hong Kong's high-speed broadband and high mobile penetration rate, which is expected to hit 89.5 percent in 2021. The territory currently has 6 million unique mobile-internet users.

Wilson Chow, PwC China and Hong Kong TMT Leader, said while the wide consumer reach makes mobile a valuable platform, further success hinges on monetising users and content for new revenues. "Measuring analytics from social media and online searches is key to understanding users’ digital footprint to optimise products and enhance the brand experience,” said Chow. 

Rise of esports

For the video games segment, social/casual gaming revenue (US$373 million) exceeeded traditional gaming revenue (US$360) for the first time in 2016, marking a 25.8 percent year-over-year increase. 

Chow pointed out that Hong Kong's "East meets West" trade show location is an ideal esports hub for gamers and advertisers, leading to monetisation opportunities in the video games segment. 

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