Spending on mobile adverts soars in China

Research report says industry segment in China to grow strongly to reach 25.7 billion yuan in 2017, thanks to more receptive consumers

PUBLISHED : Thursday, 22 May, 2014, 1:19am
UPDATED : Thursday, 22 May, 2014, 4:35am

Advertising spending is going mobile, with a recent research report showing Chinese consumers are more receptive of mobile advertising than those in Britain and the United States.

The report forecasts China's mobile advertising will reach 12.5 billion yuan (HK$15.5 billion) this year and swell to 25.7 billion yuan in 2017, compared with 9.3 billion yuan last year - a compound annual growth rate of 27 per cent, the fastest in any advertising category.

PwC's 2014 Mobile Advertising Report in China also says Chinese consumers show greater levels of engagement with targeted and relevant advertising than global peers.

About 78 per cent Chinese consumers are likely to click on advertisements if the content is relevant to them, compared with 33 per cent in Britain and 29 per cent in the US.

"China is mobile-first as a nation of shoppers. Companies that use customer data to differentiate offers and drive brand engagement have a better chance of influencing buying behaviour before and after a purchase," said Colin Light, PwC's mainland China and Hong Kong digital consulting leader.

The report shows video is the preferred format for mobile advertising in China, followed by coupons.

The report is part of a cross-country consumer intelligence series. Of the 3,800 respondents polled between October and November last year for the study, 1,001 were from China.

Li Guangdou, who heads a brand consultancy in Beijing, said people were moving from computers to mobile devices such as smartphones and tablets when they accessed the internet, hence the "blowout growth" in mobile advertising spending.

"However, there are limitations of mobile ads at the current stage," Li said. "The screen is too small, especially for the smartphones, so it is impossible to run pop-up advertisements.

"It is reported that in the US, spending on internet ads has surpassed that of traditional media platforms like television, radio and newspapers but I think in China it will still take some time, though people are going to continue to see ads shift from traditional media to digitalised platforms."

The PwC report also shows Chinese users downloaded more software applications than in other countries, with an average 42 apps downloaded in the past 12 months, compared with 23 in Britain and 20 in the US.

About 58 per cent of Chinese consumers are also willing to share their personal information in exchange for a free app, double the amount in Britain and the US.

"Giving away free content in exchange for personal data should be a core marketing channel for brands attempting to attract consumers in China," Light said.