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Mobile to Become Leading Advertising Channel in China

| Mar 10, 2017 09:34 AM EST

A commuter walks past a China Mobile Ltd. advertisement in the Futian district of Shenzhen, China.

According to the latest forecast of eMarketer, mobile is on pace to become the leading advertisement spending channel in China. It is predicting that 60 percent of total media advertisement expenditures and close to 82 percent of digital ad spending will be dedicated to mobile by 2021.

This year, China's growth in mobile ad spending has been propelled by BAT (Baidu, Alibaba, and Tencent), with a combined market share of 72 percent of all mobile ad expenditures in the country.

The digital ad spending in the country increased by 27 percent, reaching over $50 billion, which accounted for nearly 60 percent of paid media spending.

Video ad spending is still growing, which accounts for 15.5 percent of the total digital ad expenditures in 2017.

eMarketer is expecting that video ad spending will rise 35.8 percent at the end of this year, and will reach $7.80 billion through better-quality video content and a large portion of ad inventory.

eMarketer also predicted that video ad spending will account for 18 percent of digital media ad spending by 2021, reaching $17.37 billion. Mobile video ad spending will particularly have a significant growth, making up to 72 percent of all video ad spending.

Cindy Liu, a forecasting analyst at eMarketer, said: “Ad spending in China continues to shift rapidly toward digital formats, fueled by rising time spent online and greater advertiser spending on mobile formats, especially on video and social media.

"We think this trend will persist in the coming years, especially as publishers continue to introduce new and innovative ad formats and improvements to data technology.”

Tencent, the largest online entertainment and social network in the country, is expected to earn $6.02 billion in digital advertising revenues this year. As Tencent continues to monetize its WeChat platform, eMarketer expects the growth to continue over the next few years.

Baidu, on the other hand, is expected to remain ahead of Tencent when it comes to ad revenues despite it being affected by new online search advertising regulations that took effect in Sept. 2016.

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