Video advertising spend will overtake TV in China by 2021
Video advertising is the fastest growing ad format in China and will account for 13.4% of all ad expenditure by 2021, according to eMarketer.
Video ad spend is expected to overtake traditional TV spend by 2021 as it continues to grow more popular in China.
eMarketer estimates overall advertising expenditure in China will reach $50.31bn this year, with 72% of this going to mobile channels.
Video ad spend in China is expected to overtake traditional TV spend by 2021
Cindy Liu, forecasting analyst at eMarketer, said: “Advertising 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.”
“As well as investing in original content, video platforms are looking to establish exclusive partnerships. For example, iQiyi, Baidu’s on-demand video streaming service, recently announced a deal with Netflix to license some of their premium content,” said Liu.
China’s internet giants Alibaba, Tencent and Baidu (BAT) will collect a combined share of 64.1% of this total digital ad expenditure. Alibaba will secure more than 35%, followed by Baidu with 18.4% and Tencent with a 10.4% share.
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Alibaba’s digital ad revenues will reach $28.93 billion by 2019 when it will account for 38.0% of all digital ad spend in China, according to eMarketer.
“Alibaba continues to outperform expectations and is once again the strongest performer in terms of net digital ad revenues in China. By 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,” said Liu.
Tencent has announced a raft of plans to boost its video inventory including investing close to $300m to encourage the creation of original content for its live streaming video platform Now Live.