Group M Downgrades China Ad Spend Growth

While China still has one of the world’s faster-growing ad economies, WPP’s GroupM now reports it won’t be growing as quickly this year as originally predicted.

The company’s forecasting unit has downgraded its spending growth projection for China this year by more than three percentage points. The latest forecast: growth of 13.4% to just over $62 billion. That’s down from the nearly 17% growth that GroupM predicted for China in December of 2011.

Next year, GroupM predicts that ad growth in the country will slow ever further to 11.6%, for total spending of about $69 billion.

Despite the downgrade, China's ad-spending growth continues to outpace many other parts of the world. GroupM projects that spending growth in North America this year will reach just 3.6%, while spending in Western Europe will be down close to 1%. Worldwide, spending will be up an estimated 5.1% to about $506 billion.

“China is full of challenges and opportunities for marketers,” stated Eve Lo, GroupM China’s chief knowledge officer. Mobile technology is still at an “early stage” in China, Lo added, but the medium is expected to become one of the marketing industry’s most effective tools for engaging consumers in the future.

For now, however, TV remains the dominant ad medium in China, with a projected 53% share of all advertising expenditures in the country in 2012.

That said, Internet spending is soaring in the country -- expected to increase 55% this year and another 35% in 2013. At the end of June, China had 538 million Internet users, or about 40% of the population, per GroupM.



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