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China’s digital video ad spend to overtake TV by 2021: eMarketer

In China, video is the fastest growing ad format within digital, and by 2021, eMarketer expects it will overtake spending on traditional TV, accounting for 13.4 per cent of all media ad expenditures.

The forecast highlights that advertisers’ increased focus on mobile along with investments into video and social will continue to boost overall digital ad spend. This year, eMarketer estimates overall digital ad spend in China will reach USD 50.31 billion—of which 72.0 per cent will go to mobile channels.

“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 eMarketer forecasting analyst Cindy Liu.

The BAT companies—Baidu, Alibaba and Tencent—will continue to dominate the digital ad market in China due to their continued innovations in mobile and high-profile partnerships. According to eMarketer’s latest forecast, the BAT companies combined will take in 64.1 per cent of digital ad expenditures in China this year. Within the BAT companies, Alibaba will capture more than 35 per cent of China’s digital ad spending in 2017, followed by Baidu with an 18.4 per cent share and Tencent with a 10.4 per cent slice.

By 2019, Alibaba’s digital ad revenues will reach USD 28.93 billion, accounting for 38.0 per cent of all digital ad spend in China.
“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,” Ms Liu added.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.