China spends more on internet ads than most of the world

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Five years ago, expenditures on internet ads accounted for less than 15 percent of China’s advertising market. Now, according to a new report from market research firm GroupM, that number has climbed to nearly 50 percent (48.7, to be exact). In other words, almost half of the money China’s advertisers plan to spend in 2016 will go online.

That level of spending puts China ahead of most of the world when it comes to internet advertising. GroupM estimates the global internet spending average to be around 31 percent, meaning China’s well ahead of the pack.

GroupM expects China’s total ad expenditure this year to reach US$85.7 billion this year, so more than US$40 billion will likely go towards web advertising. Ecommerce search and video pre-roll ads are expected to be particularly significant areas of growth.

Of course, where there are winners, there must always be losers. China’s rapid internet advertising growth comes at the cost of traditional advertising forms. Spending on newspaper ads dropped about 30 percent last year, according to GroupM, and a similar drop is expected this year. Spending on television ads is also expected to drop by almost five percent, and has gone down by more than 20 percent over the past five years.