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China advertising spend to grow 7% in 2019

China ad spend is expected to continue to increase in 2019

Advertising spend in China is forecast to increase by 7% in 2019 as the middle classes’ purchasing habits continue to fuel the market, according to Dentsu Aegis Network.

China’s ad spend will reach RMB 717bn driven by digital’s ongoing growth – up 15.8% in the first three quarters of the year – and digital out of home (OOH), which increased 14.2% over the same period. Meanwhile, newspapers, magazines and television all recorded declines of 28%, 9% and 5.5%, respectively.

The increase in ad spend is in line with consumer behaviours which are being driven by increased disposable income, consumption habits and media behaviours. Chinese consumption accounted for 78% of China’s GDP during the first three quarters, a 14% increase over the same period last year.

Pharmaceuticals were the top category by ad spend in 2018 at more than RMB 125bn, while Entertainment and Web Services are the fastest-growing sectors. Real Estate showed the largest decline, with a -34.93% drop year-on-year.

Susana Tsui, group CEO of Dentsu Aegis Network China, said: “China’s digital economy continues to lead the globe, both in terms of scale and advancements made. It is therefore unsurprising that China remains a core driving force in the year ahead, with further positive growth forecast.”

Tim Andree, global CEO & chairman of Dentsu Aegis Network, said: “As the world transitions to a digital economy, advertising is at the leading edge of change. Digital connectedness - driven not only by advances in technology, but the speed of consumer adoption - has fundamentally changed the shape of our business and will continue to do so. Even where digital penetration is highest - such as China and the UK – the trend shows little sign of slowing down.”

The forecast is part of a global ad spend report which predicts global growth will increase 3.8% in 2019 to reach a total of $625bn. Asia Pacific and North America continue to be the strongest growth market with forecasts predicting each will contribute 42% and 30%, respectively, to the global increase. Western Europe accounts for 15%, Latin America is 10% and Central and Eastern Europe is 4%.

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