SHANGHAI: Advertising revenues in China are set to record double-digit growth over the next six years, with paid search and online video among the key drivers of this trend.
MAGNA Global, part of Interpublic Group, predicted total expenditure will surge 21.5% to 153bn yuan ($22.9bn; €17.6bn; £14.8bn) in 2010, as television takes nearly 70bn yuan and newspapers receive 39bn yuan.
The agency argued the ad sales registered by media owners - as opposed to rate-card figures typically used elsewhere - should rise 18.8% in 2011, reaching 182bn yuan, making China the third biggest market worldwide.
"Marketers whose sales in their home countries are tepid will continue to look to China as the next frontier and invest accordingly," MAGNA said.
"Global and domestic brands alike hope to capitalise on the increasing purchasing power of the growing middle class."
While China leapfrogged Japan to become the world's second-largest economy this year, currency pressures, food and real estate price inflation might put pressure on GDP growth.
More positively, between 2011 and 2016, advertising spend could witness a compound annual growth rate of 16.6%, touching 392bn yuan in all.
CCTV, the state broadcaster boasting the largest penetration, recently completed its latest advertising auction, equivalent to an upfront in the US, generating 12.7bn yuan, a 15.6% improvement year-on-year.
"Often a barometer for the health of the media industry, and sometimes even the macro economy, the outcome reflects continued optimism for China's economic future," Magna said.
Regional satellite stations Hunan TV, Anhui TV, Jiangsu TV and Zhejiang TV will possibly hold similar events this year, as brands move their focus to the provincial level.
Total TV revenues are due to hit 85bn yuan in 2011, a 21.4% expansion, and were pegged at 205bn yuan in six years time.
The internet is also emerging as a "critical vehicle" for companies hoping to achieve a nationwide scope for their campaigns, coming in at 23.7bn yuan in 2011, and 70.7bn yuan by 2016.
Demand for paid search will treble the 13.1bn yuan expected in 2011 and deliver 39.3bn yuan in 2016, but its share may still decline slightly as web-based alternatives gain ground.
Online video is likely to expand from 3.9bn yuan to 15.3bn yuan during this period, numbers standing at 6.7bn yuan and 15.9bn yuan concerning other formats, including mobile.
Leading video portals such as Youku and Tudou have already partnered with Disney, National Geographic and the NBA, and seemingly plan to go public, offering further funds for development.
Regarding print, the primary challenge could soon resemble that in mature markets as a migration to digital channels gathers speed.
Despite this, the CAGR posted by newspapers might top 4% from 2011 to 2016, when press returns better 52bn yuan, although the pace of acceleration will gradually slow.
The flourishing luxury category and an "influx" of new titles may yield an average 14% annual growth for magazines, to 8.3bn yuan in 2016.
Radio should see an increase of 13.8% overall to 22.5bn yuan, boosted by rising car ownership, projections that stood at 32.6% and 2.2bn for cinema, and 17.2% and 30.6bn yuan for outdoor.
Data sourced from MAGNA Global; additional content by Warc staff