Digital ad revenue in China grew 23% in 2020 as marketers invested in short video, e-commerce and social media.

The growth is remarkable given that the Covid-19 pandemic saw average media spend drop 15% between the first and third quarters of 2020.

The expansion was revealed in R3’s latest China Media Inflation Trends report, which also found Chinese digital giants Baidu, Alibaba and Tencent increased their collective dominance of the market from 65% to 69% in 2020.

“Digital has dominated all marketers’ media mix and will continue to do so in the new year.“ 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,” said Greg Paull, the co-founder and principal at independent marketing consultancy R3.

What does the report say?

• 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, 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 in 2020 by 39%
• In 2021, mobile internet is predicted by R3 to take up 17% of China’s total IP traffic, indicating that mobile traffic has grown at a compound growth rate of 56% since 2016.
• 2021 will also see OOH maintain resilience. Mega LED inventory rates are set 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.
• This means marketers will be turning to targeted video buys on digital to replace previous investment in traditional television commercials.

Source: TheDrum

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