GroupM revises media spend forecast in China

The new forecasts are in line with the improved outlook for the Chinese economy, with internet advertising leading the way.

The agency’s previous forecasts were 3.2 per cent for 2009 and 8.9 per cent for 2010. They were issued in June this year.

“The pessimism that surrounded the outlook for the Chinese economy as we entered 2009 appears to be passing. Confidence and revenue have returned to the broader marketplace in the second quarter as key sectors increased spending patterns,” said Bessie Lee, CEO, GroupM China.

The internet is expected to be a driving force of growth in advertising in both 2009 and 2010. China currently has approximately 338 million internet users, while the number of online home users is growing by nearly 88 million every 12 months.

Looking to 2010, China’s media spend is expected  to increase on the back of the World Expo in Shanghai and the Asian Games in Guangzhou.

“Advertisers’ options have diversified in 2009 especially in digital, events, video, branded content and sponsorship opportunities, how agencies and advertisers capitalise on these changes and manage the balance of traditional and new media will be the key to moving forward,” said Lucy Zhang, futures director, GroupM Knowledge, China.

Online spend is expected to rise 20.3 per cent this year and 35 per cent next year. Television, by far the biggest medium, is expected to rise by 5.8 per cent then 6.4 per cent. Newspapers are the only media channel expected to post a fall in adspend this year, dropping five per cent; however, newspaper adspend is expected to rise by four per cent next year.

The revised ad forecasts reflect an improved general economic outlook for China. The World Bank and Goldman Sachs have recently raised their forecasts for the market, with GDP growth this year expected to be between seven and eight per cent.