As the team is on its way to ChinaJoy to support a couple of clients engage with the media, we analyse a couple of reports on the mobile advertising market in China.
Several advantages of mobile advertising make it appear as the promising answer to the future of the industry as a whole. Differently from online marketing and advertising, mobile ads are considered less invasive and out of context, and have therefore been more enthusiastically welcomed by online users. In the PRC, this tendency is particularly accentuated, with the Chinese mobile ad market on its way to become the most valuable worldwide.
In 2016, the global mobile ad industry is going to hit $100B, accounting for 51percent of the digital market and China, together with the US, will nurture around 62percent of the whole ad spend. According to a report from eMarketer, in between 2016 and 2019, the global mobile advertising industry expenditure will almost double, hitting $195.55B worldwide and accounting for 70percent of the digital market spend. In the current year, Chinese advertisers are expected to invest a total of $22.14B, triplicating the amount spent on ads the previous year.
“Mobile Advertising and User Acquisition in China”, published by Talking Data, reports that in 2015, 36.5percent of all ads was represented by brand awareness campaigns, which registered an increase of 9percentage points in comparison to 2014. The development of brand awareness campaigns, subsequently resulted in a shrinking market for direct response ads. The former helps the companies to build up recognition of their brand and products among old customers and increase the companies’ possibilities to gain new ones. The raise of this “new” kind of advertising strategy is due to the emotional bonds that different companies are able to create with their audience. Through an app, each firm succeeds at being connected with their customers on a regular basis, almost 24/7. According to studies conducted in 2014, users spend an average of 158 minutes/day on smartphones and tablets, two hours of which are in apps and only 30 minutes in old-school browsing. Between 2012 and 2014, the number of app downloads grew by 120percent, to 140B.
Why are mobile ads so easily accepted and clicked-on by consumers? Think about it: the main source of revenue generated by the mobile advertising industry is the traffic of users’ data. Tracking consumer behavior in the internet can provide useful insight into the routine, habits and interests of the users, which is basically what ad companies can profit from. By getting to know their consumers online, companies can better target them through ads that reflect their interest, therefore be considered relevant. Among the 1,001 people surveyed by PwC, author of the “Mobile Advertising in China” report published in 2014, 77percent of the respondent considers relevancy of the ads the first reason to click on them.
In terms of ad formats, what appear to be more appealing for the audience nowadays are mainly videos and information streams, which account for 50percent of the total ads that are served. The reason is that videos and information streams provide major involvement to the audience, are more immediate as well as less energy-consuming than search engines and interstitial ads. In China, the trend is also derived from the popularity of free video streaming platforms, such as Youku and Baidu, that provide content on-demand if the consumers accepts to sit through advertisements first.
What’s more advertised in the Chinese market is, according to the Talking Data report, the game industry, which accounted for 81percent of the total mobile ad market in 2014. The following year, the industry was still the most appealing one for advertisers, even though its share in the total mobile ad industry reduced considerably and accounted for merely 60percent of it, as the new media, e-commerce, travel & transportation sectors progressively gained ground.
MadHouse and MobiSgae are the proof that mobile ad networks aren’t limited to the West. When it comes to sponsor a new game though, especially if coming from abroad, they aren’t normally the developers’ first choice. Since most of the online traffic is generated by big Chinese channels, such as Tencent, Baidu, Qihoo and Kingsoft, developers turn to them for better monetization and growth prospects.
So that’s how the Chinese mobile ad sector has been doing lately, are you curious about what the future holds for the mobile ad field? A few interviews to some startup founders conducted by Mashable revealed, as previously mentioned, the importance of video ads that will dominate the market. In addition, having an Instagram account might become crucial to those companies that are willing to gain more visibility. As Jonathan Long, from Market Domination Media said during an interview with Mashable, everybody has an Instagram account and posting an ad on it, would result in immediate reach among the company’s customers and followers. In the opinion of Stephen Gill, from Tiller, the key of 2016 mobile ad market will be represented by native advertising that will rebuild trust between consumers. Native ads can “reach the right audience in context,” Gill said “and draw double the CTR of display ads.”
To sum it up, after collecting data and forecasts related to the Chinese mobile ad industry, it appears clear how the mobile ad market will represent a fruitful investment in the long run and will evolve together with the fast developing gaming and app industries, providing innovative solutions to developers and publishers.
Lucrezia Dal Pra
The team at Influence Matters is always glad to provide you with the results of its researches in the tech field. If you like our article and find it useful, please let us know! Send us an email and keep following our blog to receive further info and insights into the tech sector.
Lucrezia is an Italian graduate student at Tsinghua’s School of Journalism and Communication in Beijing, majoring in Global Business Journalism. She is currently interning at Influence Matters, where she is in charge of the company’s branding, as well as researching about the tech industry trends and development.
