China mobile ads industry growth has been nothing short of explosive. As it was recently reported by eMarketer, mobile ads spend in China is expected to double this year compared to 2014. eMarketer predicts that “spending on display and search ads delivered to mobile internet-connected devices will reach $13.98 billion this year, up from $7.38 billion in 2014, and will account for 45% of all digital spend in the country.”
Overall, digital advertising spending has already surpassed TV in China. In fact, TV ads are gradually falling out of favor with the advertisers, mostly due to huge costs, limited targeting options and complete lack of interactivity. TV ads may still be effective for blanket advertising for products that benefit from maximum reach. Unfortunately, whenever more granular approach is required, they lack flexibility.
Digital advertising, on the other hand, has none of those problems – it can be fine tuned to a specific demographics and made to target people with relevant interests.On top of that, digital advertising almost always comes with robust analytics allowing endless analyzing and tweaking the delivery to maximize efficiency.
Main factors driving China mobile ads market
Mobile adverting promises to ad another dimension to digital ads – ability to reach consumers anytime, anywhere and on their most intimate gadget.
In addition, distrust for traditional media, such as TV and print, is still quite common in China – this could be another factor behind the growth of China mobile ads.
Mobile penetration in China continues to increase, although it is still behind some other developed markets. This means that the growth of China mobile ads market will be further stimulated by more mobile phones in the hands of consumers and continually improving mobile infrastructure.Smartphones are still the primary device for connecting to the internet for majority of Chinese. This is another factor why China mobile ads are growing fast.
High efficiency of China mobile ads is also attributed to the fact that Chinese do spend money on mobile, mainly with Taobao and other mobile based internet stores. Alipay, primary Chinese payment system that is integrated with the largest stores (except WeChat) provides the required “lubricant” to make shopping with smartphones an easy and safe experience.
It is still remains to be seen whether developers of China mobile ads platform can avoid some of the problems common in digital ads, particularly fraud.
One of the most powerful features of mobile advertising is its capability to target consumers based on their location. Knowing where your customers are can allow advertisers to deliver the most relevant message and maximize the chances of conversion. Without a doubt, it is going to be the future of digital adverting.
Emarketer’s research concludes that by 2019, digital ads will account for almost 60% of the total advertising spend in China with about three quarters of which will be entirely mobile. TV ads will account for about 20% by then with the rest split between print, outdoor and radio.
It is still remains to be seen whether developers of China mobile ads platform can avoid some of the problems common in digital ads, particularly fraud. I’ve discussed the problem with China digital adverting in one of the earlier posts.