China’s rapid ad spend growth – what you need to know

Date:2017-02-06 From:DU Ad Platform Team

China is the place to be when it comes to advertising. Despite reports of an overall economic slowdown, China’s digital ad spend continues to gain momentum coming off a year of extreme growth ($27 billion). Many have taken note of China’s success and tried to predict how this will impact the future of mobile ad spend on a global level. Some even argue that China will overtake the US as the highest spending advertising market in the next few years. It’s easy to agree when taking a deeper look at the growth rates of the Chinese and U.S. markets. Up until 2015, the amount spent on ad space in the U.S. remained steady, while China grew three and a half times over this period.

Here’s a bit of insight into what makes the Chinese mobile advertising market tick.

Can traditional media compete with mobile?  

Long gone are the days when traditional media was the preference among consumers. Internationally, ad dollars are being taken away from television, radio and print and channeled into digital and mobile. To put it in perspective, five years ago the internet accounted for only 15 percent of China’s total ad spend. This year it’s expected to take 50 percent. What makes the ad space in China so successful is companies’ ability to act quickly and capitalize on the popularity of smartphones. Research firm, Warc discovered that China was the first market where mobile was the biggest slice of overall ad spend. And mobile’s popularity is not slowing down anytime soon. eMarketer recently released a report predicting that total mobile ad spending in China will annually grow by at least 20 percent each year through 2019.

Which app categories reign supreme?

When decoding China’s mobile market, it’s easy to see that companies are putting their energy and pocketbooks into the utilities and gaming categories. In an attempt to hook users on a global level, China is focusing on keyboard apps, memory and battery optimizers, and Android launchers. It’s a wise strategy considering that utility apps account for nine of the top 25 mobile apps in the U.S. by unique visitors and 60 percent of mobile ad spending worldwide. Mobile games on the other hand are not only the most popular app category in the world, but are also considered the most profitable app category in the U.S. We can expect to see the Chinese market continue to tap into this sector in the coming years.