Digital Tops TV Spend in China, Now the Majority of Advertising Spend

 In China, Digital Marketing, Ecommerce, Social Media Marketing

In 2016, for the first time, advertising spending on Digital topped spending on television according to GroupM’s “This Year, Next Year: China Media Forecasts”.

In 2017, spend on Digital is set to make up 57.2% of total Chinese advertising spend and TV ad spends are set to decline, falling 5.2% year on year.

So is it finally time to call time on TV? Should your brand abandon this platform and should you make the leap to digital only advertising?

Digital Spend VS. TV Spend

According to a recent study by Kantar Media, the answer to this question is both yes…and no.

They’ve shown in a study of over 40,000 households in China that Digital Advertising drives some 80% more spend than traditional TV advertising.

So why continue to advertise on TV? Well, it still has better coverage than digital advertising across all age groups – even the particularly coveted 20 to 40-year-old demographic.

They claim that in fact, as in the chart below, digital marketing’s reach only covers 43% of the market by itself, whereas TV still reaches 87% of the market.

By dropping all spend on TV advertising then, brands would be missing out on 58% reach, but by dropping all spend on digital they would only miss out on 13% of the market.

reach_by_media

Source: Kantar Worldpanel

A Media Mix for the Largest, But Digital-Only for the Rest

What this means is that given the choice, all companies should attempt to carefully balance TV and Digital spend to achieve the optimal trade-off between reach and efficiency of spend.

For the largest players, this makes perfect sense.

But for all but the largest multinationals, this is not the best route to take. When every pound counts and sheer efficiency and ROI is your priority, this research clearly shows that Digital is the way to go.

With better targeting, easier attribution of ROI and with programmatic, quicker cycles of optimisation, Digital should rule the roost for most businesses.

If your business would like to explore your Digital Advertising opportunities, or want to optimise your current spend, contact us below.

We’ve got partnerships with some of the largest and some of the most dynamic media and ad-tech companies in China and we’re happy to help.

Mobile VS Desktop Advertising

Finally, if you are going to go Digital-only, you might wonder how you should allocate your media spend between mobile and desktop.

With eCommerce going mobile and Alibaba reporting $14.6bn in sales from mobile devices (82% of all orders) in its Singles’ Day event 2016, you might think to allocate the bulk of your spending to mobile.

digital_sales_uplift

Source: Kantar Worldpanel

But, according to Kantar Worldpanel again, this is not yet necessarily a good idea. They’ve shown (as in the graph above) that sales uplift for mobile based advertising is still only 2% more than desktop advertising.

So, a balance here is still necessary.

If your business would like to explore your Digital Advertising opportunities, or want to optimise your current spend, contact us below.

We’ve got partnerships with some of the largest and some of the most dynamic media and ad-tech companies in China and we’re happy to help.

TongDigital is an agency at the forefront of social commerce and digital marketing in China. We focus on social commerce through WeChat, social media marketing, digital PR and media buying in China.

Get in touch for a preliminary consultation on how to best sell direct to the Chinese consumer.

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