Weakening ad market in China will still produce growth

The news: China’s advertising industry is softening, but the world’s second-largest ad market behind the US will still produce growth, per our updated forecast.

• The country’s total media ad spending and digital media ad spending will expand this year by 9.2% and 11.5%, respectively, their lowest growth rates on record.
• Traditional channels continue to fall out of vogue. Digital advertising–which appears on laptops, mobile phones and other internet-connected devices–will account for 81.5% of total ad spending of $166.13 billion in the country this year.

Shifting market: While China’s economic sluggishness and the pandemic are weighing on ad spending, a government crackdown on large tech companies is also dramatically affecting the industry.

• Last year, the country adopted measures that restrict corporate data transfers and limit the collection of personal information without consumers’ consent.
• These regulations have created massive challenges for ad tech service providers and digital ad publishers, as previously standard practices for data collection and ad targeting suddenly became illegal.

The big takeaway: Though the days of go-go growth may be ending for China’s ad market, total advertising spending there will far exceed many other regions in the world, making it a country that marketers can’t afford to ignore.

Go further: Read more about our ad spending forecasts for China in our report.