China is expected to lead the growth of the advertising industry next year, and media agencies are seeing favorable sentiments towards the industry among brand owners.
China, along with the United States and the United Kingdom, accounts for about 60% of the total market size and accounts for about 70% of all industry growth, according to GroupM’s annual advertising forecast.
Digital spending now accounts for almost 90% of the entire advertising market in China, up from less than 80% before the pandemic, one of the highest rates in the world.
This year, China’s annual advertising growth was 18.8%. Growth is expected to slow towards the high single digits as the industry’s pandemic-driven expansion eases.
“Performance marketing, social media and content spend has seen high double-digit growth, particularly in 2021, and will continue to play an important role over the next two to three years,” said the director. General of Wavemaker China, Jose Campon.
GroupM’s media investment and brand performance agency Wavemaker, which manages media investment plans for Huawei, Tencent and emerging brands like Three Squirrels in China, also plans to invest more resources in brand and data-related technology infrastructure, he added.
The emergence of social media platforms creates new opportunities for brands to boost their image and better manage brand equity across different channels, he also noted.
A balanced approach to short-term results and building long-term brand equity is crucial for a sustainable customer experience, he commented.
A separate report from IPG Mediabrands’ media investment and intelligence unit, Magna, says China also recorded its highest growth rate in 10 years with a 16.7% increase and a total size of $98 billion, the second largest market outside the United States.
Globally, digital advertising sales increased 31% to $442 billion.
He attributed the digital acceleration to increased digital marketing activity, particularly by small businesses that have increased their use of social media and search formats.