Digital to Fuel Chinese Adspend Growth

23 October 2008

BEIJING: Adspend levels in China will surge by 22% in 2008 and 19.5% in 2009, with digital expenditure rising respectively by 73% and 43%, according to a study by international consultancy KPMG.

In Destination Digital: Opportunities in China's Media and Advertising Market, KPMG estimates the Chinese ad market will be worth $37.8bn (€29.3bn; £23.0bn; Yuan 258bn) by December 2009, up $6bn on 2007. 

Digital expenditure will reach $5.2bn at the end of next year, giving the country's online market an annual value similar to its UK equivalent. 

As digital adspend currently has an 8.5% share of Chinese marketing spend, compared with 20% in the UK, the report suggests online has huge possibilities for future expansion in the country.

The medium has enjoyed annual growth rates of over 60% from 2003–07, compared with uplifts of around 10% for traditional media like TV and print.

China is also home to 250m internet users (up 91m year-on-year), 120m online gamers and 100m bloggers, and its internet users spend around 14 times longer on the web than their US counterparts.

Honson To, a partner at KPMG China, said: "Chinese internet user numbers are higher than anywhere else in the world and so far only 19% of Chinese people are online.

"China has truly emerged as a leading market for digital media including web 2.0 technologies such as social networking, blogging, online gaming and cross-platform services."

According to KPMG's data, the country numbers 1.19bn television viewers aged four and above, and a third of the world's cable TV audience (with cable currently taking around 60% of Chinese adspend).

Radio will see its share of adspend increase from zero in 2004 to 3.5% by the close of 2009, though newspapers' share will fall to 9.6%, down from a high of 19.4% in 2001.

Data sourced from Media Guardian (UK); additional content by WARC staff