China Insights
English
English

Ad spending growth disappears in first half of 2016

May Zhao

General Manager of Media Intelligence

TV & Movie 05.08.2016 / 10:45

Less cash

The overall ad spending grows only 0.1%, among which traditional media declines 6.2%. Ad spending on TV shrinks by 3.8%, the leading culprit for the sluggish market.

According to CTR Media Intelligence monitoring, in the first half of this year, China’s overall ad spending grew only 0.1%. On the rate card basis, ad spending on TV dropped 3.8% from a year ago. It cut 2.5 percentage points off the net total growth and offset 2.5 percentage point of growth contributed by Internet.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

Ad spending on traditional media

On the rate card basis, ad spending on traditional media dropped by 6.2% from a year ago, the worst performance in history. Just five years ago, ad spending on traditional media jumped 14.3% in the first half of 2011 from a year ago. But things went from bad to worse ever since, except in the first half of 2013 when it grew by 8.3%.  The market appeared to be shrinking for the first time in the first half of 2015 (-5.7%) and this year the trend deteriorated.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

Radio is the only traditional media format which has reversed its fortune by returning to growth (from -2.9% to 2.9%). TV, though the decline was small, appeared to have entered a downward spiral because its decrease was 0.4 percentage point more than -3.4% in a year ago. Also, the massive scale of ad spending meant a tiny decrease in TV ad spending will deal a huge blow to the overall traditional media industry.

Newspapers’ nosedive accelerated. Ad spending in newspapers lost 41.4%, nearly 10 percentage points more than -32.1% a year ago. The top five buying industries of newspaper ads all significantly reduced their spending. The evaporating of magazine ad revenue has also quickened. In the first half of this year, it was 29.4% less than a year ago, when it dropped by 15.6%. Non-digital out-of-home has also turned from black to red: its growth was -3.6% in the first half of this year while it was growing 3.9% a year ago.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

From an advertiser perspective, traditional media are increasingly relying on revenue from healthcare brands. In the first half of this year, there are eight companies in the top 20 biggest ad buyers whose ad spending growth was higher than 30%. Six out of the eight companies are healthcare companies, among which Hongmao Pharmaceutical Co. Ltd. spent 121.8% more than a year ago. In contrast, some well-known FMCG companies were significantly reducing their spending, including Unilever (No.4, -17.7%), Yum! China (No.10, -48.4%), Dali Foods Group (No.15, -28.8%) and Mars China (No.16, -34%). The only one buckling the trend is Pepsi (China) whose spending on traditional media jumped by 144.8% and ranked No.18 in total spending.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

Healthcare brands’ bullish betting on TV ad was especially apparent. In the top five buying industries of TV ad, healthcare industry is the only one that has been expanding in recent two years (1H 2015 24.4% vs 1H 2016 25.3%). Other industries either has turned from growing to declining, such as beverage (3% vs -13.6%) and food (3.5% vs -7.9%), or has continued to reduce their spending, such as cosmetics/toiletries (-24.4% vs -9.9%) and commerce and service (-9.2% vs -18.7%).

Out of the top 10 biggest TV ad buying brands, six were healthcare brands. They not only dominated the top four spots, but also all grew by at least 30%, the highest being nearly 170%.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

Ad spending on traditional media

In stark contrast to the situation of traditional media, new media has attracted more spending at a much faster pace. Internet, office building screen and cinema pre-roll all reported higher growth compared with a year ago. The only exception being transportation screen, which has extended its decline.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

Internet contributed the biggest share of new media advertising spending. Four out of its top five ad buying industries increased their spending, among which “computer and office automation products” (including mobile apps and mobile gaming) (77.4%) and “finance” industries (94.1%) were aggressive.



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

In office building screen sector, the growth of ad spending happened across all top five buying industries. “Computer and office automation products”, the slowest of them, expanded by 16.2%. “Telecommunications” industry, which included website brands, not only has spent the most, but also injected much more new cash into this media with a year-on-year increase of 174%. The biggest three advertising brands were Nongfu Spring (农夫山泉) (98.3%), travel website Tuniu.com (途牛) (163.5%) and JD marketplace (a staggering 784.9%!). There were also three brands breaking into the top 10 for the first time: real estate website Fang.com (房天下), second-hand car transaction website Guazi.com (瓜子二手车直卖) and live video stream app Yizhibo (一直播).



Kantar
  • SAVE
  • Close

    SHARE THIS WITH FRIENDS

  • EMBED
    Close

    Copy this code to your blog

The sizzling growth of China’s movie market has cooled off when the box revenue increase in the first half of this year dropped to 21% from a year ago, compared with 48% in first half of 2015. However, the soaring of ad spending in cinema pre-roll was not affected: its growth accelerated to 77.1% in the first half of this year, faster than 54.2% a year ago. The growth of top 5 buying industries were all higher than 35%. Among the top 10 buying brands, Xiaomi and car rental website Zuche.com (神州租车) boosted their spending by more than 10 times. Three brands broke into the top 10 ranking: Youku Tudou, online wealth management website Lu.com (陆金所) and live stream app ingkee (映客). Chinese cosmetics brand Marubi (丸美) is the only brand cutting its spending among the top 10 (No.10, -18.4%).

 

Source: CTR

Editor's notes

* For detailed definition of ad spending volume, please check the Chinese version article.

* To know more information, data and analysis of China's advertising market, please contact us.

* Please subscribe to our newsletter to receive news alerts.

 

Latest Stories

About 10% Chinese adult are diabetes patients while another 36% of them are in the pre-diabetes stage. This situation is similar to that in the United States.

Redmi Note 4X boosts Xiaomi’s rally in urban China.

Indonesia’s strongest brands are 8% more valuable than last year – worth US$71.6 billion. BCA leads the ranking for a third year, growing 13% to US$10.5 billion.

‘Millennials’ is a commonly used concept in marketing and offers a convenient demographic cohort for multinational companies to understand consumer segments. But does this concept work in China?

Growth of ad spending in China shows a slight rebound in the first half of this year as the decline of traditional media advertising revenue stabilises.

Related Content
Social Network