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Digital video ad spend to overtake TV in China by 2021

In China, advertisers’ increased focus on mobile, along with investments in video and social, will continue to boost overall digital ad spend, according to eMarketer’s latest forecast.

This year, eMarketer‚Äôs forecast estimates overall digital ad spend in China will reach US$50.31 billion ‚ÄĒ of which 72.0% will go to mobile channels. Video is the fastest growing ad format within digital, and by 2021 it expects it will overtake spending on traditional TV, accounting for 13.4% of all media ad expenditures.

digital vs tv china

‚ÄúAdvertising on digital video is growing at a faster rate than overall display ads, and strong content is a key driver for this growth as brands are willing to spend more money to appear alongside the most popular content,‚ÄĚ said eMarketer forecasting analyst Cindy Liu. ‚ÄúAs well as investing in original content, video platforms are looking to establish exclusive partnerships. For example, iQiyi, Baidu‚Äôs on-demand video streaming service, recently announced a deal with Netflix to license some of their premium content.‚ÄĚ

Thanks to their continued innovations in mobile and high-profile partnerships, the BAT companies ‚ÄĒ Baidu, Alibaba and Tencent, will continue to dominate the digital ad market in China. According to eMarketer‚Äôs latest forecast, the BAT companies combined will take in 64.1% of digital ad expenditures in China this year. Within the BAT companies, Alibaba will capture more than 35% of China‚Äôs digital ad spending in 2017, followed by Baidu with an 18.4% share and Tencent with a 10.4% slice.

By 2019, Alibaba’s digital ad revenues will reach US$28.93 billion, accounting for 38.0% of all digital ad spend in China.

‚ÄúAlibaba continues to outperform expectations and is once again the strongest performer in terms of net digital ad revenues in China,‚ÄĚ Liu said. ‚ÄúBy incorporating social and video elements into its mobile shopping app – Taobao, Alibaba is able to capture more consumer time and thus attract more advertising spend. Meanwhile, Tencent, which is the fastest growing company in terms of net digital ad revenues, will fall short of Alibaba and Baidu through 2019, as the company errs on the conservative side when it comes to unloading its ad inventory.‚ÄĚ

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