China’s ad market snowballing

The Olympics and growing consumer power are helping China's ad market draw closer to being the second-largest in the world.

A new report by UK-HQ’d global media investment management operation GroupM predicts that China is on the road to becoming the world’s second-largest ad market in 2010.

Driven by Olympic-related expenditures, growing consumer power and urbanization, ad spending in the 2008 Olympic host nation is expected to grow more than 20% this year and by almost 20% in 2009.

‘We’re confident of strong media investment growth extending to 2009, as demand in China becomes an increasingly important source of growth for global marketers as well as Chinese companies focusing on brand-building,’ says GroupM futures director Adam Smith.

Last year, China outstripped Germany to become the number-three ad market in the world, behind the US and Japan. The report notes that with Japan close to recession, it should be relatively easy for China to overtake its neighbour by 2010.

GroupM’s report cites television and the Internet as the key catalysts of ad growth in China, especially with the estimated $400 million in spending the Olympics generated on CCTV, China’s national television network. The Internet is expected to account for 8.5% of ad investment in 2009, which would be a jump from the 7.3% expected this year.

‘China has the world’s largest Internet community, with more than 250 million users,’ says Smith. ‘That’s an increase of more than 90 million from June of last year, representing a year-to-year growth of more than 55%.’> GroupM serves as the parent company to WPP media agencies. The study, ‘This Year, Next Year: China,’ is part of GroupM’s media and marketing forecasting series taken from data supplied by WPP’s resources in advertising, public relations, market research and specialist communications.