Chinese post-Olympic ad $$$ to grow in the long term
A new report by GroupM, the parent company of WPPs media agencies, shows above the line and digital ad spend in China is expected to grow by 40 percent over the next two years, according to Brand Republic.
The This Year, Next Year: China report has been compiled using data supplied by GroupM parent WPPs constituent companies. It details how the Beijing Olympics will be a significant factor in driving media investment growth of 22 percent to US$35 billion compared with 2007, but it also highlights that growing consumer power will continue this growth curve after the Olympics.
Beyond the games, the report predicts that 2009 adspend will grow 19.5 percent to US$42bn, and the report also claimed that last year, China replaced Germany as
the worlds third largest advertising market, behind the US and Japan.
Smith said that by 2010, ad spend in China will overtake that in Japan. China will supply 23 percent of an anticipated 5.8 percent growth
in global ad spend in 2008 and 30 percent of an expected 4.5 percent global
growth in 2009.
Adam Smith, GroupMs futures director, said: Were confident of strong media investment growth extending to 2009 as demand in China becomes an increasingly important source of growth for global marketers as well as Chinese companies focusing on brand-building. Growth in 2007 was relatively restrained, but we predict many marketers are conserving funds for the anticipated Olympic bonanza this year.
TV and the internet were identified as the main beneficiaries of Chinas increased spend, with the Olympics generating an estimated US$400m in spending on CCTV – Chinas national TV network.
The internet is expected to attract 7.3 percent of adspend in 2008, rising to 8.5 percent next year, the report said, noting that it is Chinas fastest-growing medium and is on track to become the second-largest advertising medium after TV within a few years.
China has the worlds largest internet community with more than 250 million users, Smith added. Thats an increase of more than 90 million from June of last year, representing a year-to-year growth of more than 55 percent.