Digital ad revenue in China grew by over 20% in 2020

Digital advertising revenue in China grew by almost 23% in 2020, and the double-digit growth occurred even though average media spend fell by more than 15% between Q1 and Q3 because of COVID-19, according to a new report from independent consultancy R3.

Takeaways

• The 2021 China Media Inflation Trends report states that digital dominated all marketers’ media mix in 2020 and will continue to do so in the new year, with short-form video, e-commerce and social media the platforms most in demand.
• Chinese e-commerce giants Baidu, Alibaba and Tencent (the so-called BAT companies) increased their collective dominance of the market from 65% to 69% in 2020.
• Social key opinion leaders (KOL) and performance media investment were the fastest-growing media types in 2020 as content became a key focus for marketers looking to increase engagement and conversion through social commerce.
• Short video led growth across all categories, with an increase of 10% on ratecard, driven by the growing popularity of platforms like Douyin, Kuaishou and Bilibili, with each platform serving specific audience demographics. Short video outperformed e-commerce in digital advertising revenue by 39% in 2020.
• Mobile internet is expected to account for 17% of China’s total IP traffic in 2021, suggesting that mobile traffic has grown at a compound growth rate of 56 % since 2016.
• OOH is forecast to “maintain resilience” in 2021, while mega LED inventor rates are expected to maintain a higher growth rate due to their premium locations.
• CCTV and the top four satellite TV companies (Hunan Satellite, Jiangsu Satellite, Zhejiang Satellite and Dragon TV) will offer similar pricing, while local television will try to entice advertisers with better deals as viewership decreases.

Key quote

“The most robust platform in each digital category will be able to outgrow their competitors by uplift in rates or loading fees when advertisers buy into selective traffic” – Greg Paull, co-founder and principal at R3.