Social network ad spend in China to top Japan's in five years

PUBLISHED : Saturday, 04 October, 2014, 4:46am
UPDATED : Saturday, 04 October, 2014, 4:46am

Powered by the fast-growing number of subscribers to domestic social networks, annual advertising spending in mainland China's social media market looks set to surpass that of regional industry leader Japan over the next five years.

Rapid adoption of social media by Chinese consumers has led more marketers, especially those of large international brands, to increase their advertising on popular home-grown platforms on the mainland, where the major social networks such as Facebook and Twitter are blocked by the authorities.

"Chinese consumers are addicted to social media," Forrester Research analyst Wang Xiaofeng said. She estimated that "more than 95 per cent" of Chinese internet users in metropolitan cities were on social networks.

Total social media advertising spending on the mainland is forecast to reach US$1.7 billion in 2019, up from an estimated US$535.5 million this year, as most marketers raise their budgets for campaigns on these networks.

That would be enough to pass Japan, Asia-Pacific's market leader in social media advertising. Japan is projected to record campaigns worth US$1.6 billion in 2019, from this year's forecast of US$864 million.

Despite Japan's current lead, China's social media users are more active in connecting with brands. "On average, online metro Chinese who are Sina Weibo users engage with 29 brands, while online Japanese Twitter users engage with eight brands. Forty-six per cent of metro Chinese online adults don't mind seeing display ads on social media," Wang said.

Beijing-based Weibo, which is owned by internet media firm Sina and e-commerce giant Alibaba Group, had 156.5 million monthly active users in the second quarter.

Weibo chief executive Wang Gaofei said in August that brand advertisers' engagement with mainland consumers rose because of fresh initiatives. "We built new product experiences that integrate Weibo with TV shows and other live events," he said.

Mainland social networks have also sharpened their focus on their advertisers' target market segments. "In the beginning of this year, Renren made a strategic shift to focus on college students and the young generation in China," Renren chief executive Joseph Chen said.

Renren, which had 214 million users at the end of June, had become "the go-to brand for reaching … this important demographic", Chen said.

Forrester's Wang said wide mobile access to social media had also helped spur advertising on the mainland, the world's biggest smartphone market since 2012. "Ninety per cent of metro Chinese adults online are smartphone users," she said.

 

 

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