Analysis Report on the Status and Prospects of China's Advertising Industry

Advertising Industry Overall Positive, Major Category Placement Amounts Remain Stable

The latest data from the State Administration for Market Supervision (SAMS) shows that the advertising industry is generally positive in FY2019, and the structure of advertising business units and advertising practitioners has been adjusted and gradually entered into a benign track of development.The overall scale of China's advertisement market in FY2019 reached RMB867.428 billion, representing an increase of 8.54%. The reasons are as follows: on the one hand, the popularization and application of innovative technologies such as AI, big data and intelligent placement not only created a number of unicorn marketing platforms, but also significantly lowered the threshold of advertisement placement and broadened the advertisement market space. On the other hand, the overall amount of advertisement placement in major categories remained stable in 2019.

Internet user scale growth, Internet advertising has become a leading force in the development of the advertising market

Currently, China's Internet user growth has entered a relatively stable stage, and the penetration rate of the Internet among easy-to-convert populations and residents of developed regions has reached a high level, and the popularization of China's Internet in the next stage will shift to residents of third- and fourth-tier cities and rural areas. At present, with the prosperous development of mobile Internet, the characteristics of mobile terminal equipment, such as cheaper price and more convenient access to the Internet, provide opportunities for Internet promotion in some backward areas and among hard-to-convert people.

According to the 44th Statistical Report on the Development Status of the Internet in China released by the China Internet Network Information Center (CNNIC), as of June 2019, China's Internet users amounted to 854 million, with a penetration rate of 61.2%, up 1.6 percentage points from the end of 2018.

According to the data of China's Internet Advertising Development Report, China's Internet advertising market showed a year-on-year increase in 2010-2019, with a downward trend in growth rate.In 2019, China's total Internet advertising revenue amounted to about 436.7 billion yuan, an increase of 18.22% compared to the previous year, which was slightly slower than that of 2018, but still maintained the trend of growth.

Overall, as the social environment tends to mature and the application of new social tools, the integration of online and offline tends to be closer, and new social brands and small and micro economies based on personalized content and so on are gradually booming, with a number of sizable small and micro brands emerging as new additions to the advertisers' lineup. This not only makes up for the deceleration of incremental advertising brought about by the shrinking budgets of large and medium-sized enterprises, but also provides a possibility for the continuous growth of Internet advertising. While Internet marketing impacts traditional media, it also promotes innovation and industrial upgrading in the advertising market.

--The above data comes from China Internet Advertising Industry Market Outlook and Investment Strategy Planning Analysis Report by Prospect Industry Research Institute.