Development trend of advertising industry in the future

Analysis on the present situation and development trend of advertising industry in China

First, the development of macro advertising market and existing problems

Since the economic recovery in 2000, China's economy has entered a new development cycle. By 2008, China's economy has been running rapidly and smoothly for eight consecutive years. The national economy has maintained a good and rapid development trend, which has provided a strong economic guarantee for the development of advertising industry. According to a survey released by the German Advertising Central Association in 2008, China's advertising industry has jumped to the second place in the world, second only to the United States. ① In 2007, the annual turnover of advertising industry in China was 147 1 100 million yuan, accounting for 0.706% of GDP. The advertising industry has begun to take shape in the national economy. As an economy-dependent industry, the advertising industry in China has maintained a double-digit growth in turnover every year, driven by sustained macroeconomic growth. From 2000 to 2007, the average annual growth rate was 13.75%, which was higher than the average GDP growth rate of 9.24%. ③ In 2007, the growth rate of total advertising turnover was 10.68%. Considering the steady growth of macro-economy and the promotion of Olympic economy, it is predicted that the growth of advertising industry in China in 2008 will be more optimistic than that in 2007. Driven by the digital revolution and new media technology, the media advertising market in China has undergone earth-shaking changes. Traditional media is still the main body of the advertising market, but the growth rate is slowing down year by year; The advertising share of new media represented by the Internet has been rising, surpassing magazines and radio. In the all-media advertising market in 2007, TV ranked first with a share of 74. 1%.

Newspapers and outdoor media ranked second and third with 13.5% and 3.7% respectively, while Internet and business building LCD ranked fourth and fifth with 3.5% and 2.3% respectively, exceeding the share of magazines and radio stations. ⑤ Generally speaking, the advertising industry in China has entered a new period of "high growth" since 2000 after experiencing a recovery period in 1980s and a rapid growth period in 1990s. ⑥ The development of advertising industry in China is moving from low starting point and high speed to high starting point and low speed, the growth rate tends to be stable, and the average profit of the industry tends to be stable. However, the fundamental problems existing in China's advertising industry have not been solved, and the unreasonable growth mode and industrial structure of China's advertising industry are still bottlenecks restricting the development of the industry. Judging from the growth of China's advertising industry in recent years, the growth mode is still extensive growth driven by quantitative growth, and there is no qualitative leap. The growth rate of advertising business units is much higher than that of advertising turnover. Taking 2007 as an example, the growth rate of advertising business units in China in 2007 was 20.6%, which was nearly 10 percentage point higher than the growth rate of total turnover 10.68%. ⑦ From the perspective of industrial structure, the concentration of China's advertising industry is low, with small and medium-sized advertising companies accounting for the vast majority, highly dispersed and weak in strength. In 2006, a large number of small and medium-sized advertising companies other than China 100 advertising business units only accounted for 23% of the total turnover, which was seriously mismatched with its number. In addition, the relationship between the main bodies of the advertising market, namely the media, advertisers and advertising companies, is extremely unbalanced, and the pattern of "strong media and weak companies" remains unchanged. According to the statistics of the advertising industry in 2007, the advertising business of the four traditional media accounted for 49. 1% of the total business, and the advertising business of professional advertising companies accounted for 39.55%. This structural imbalance in China's advertising industry directly leads advertising companies to be in a weak position in the game of the three major market players.

Second, the new changes in the micro-advertising market

1, the media environment is more complex and the media competition is becoming increasingly fierce.

Since the new century, the fission and differentiation of the media have become increasingly serious, and the media environment has become more complicated. New media emerge one after another, while traditional media gradually decline; The pattern of the media has undergone profound changes. The new media represented by the Internet is developing rapidly. Since 2004, Focus Media, represented by building TV, store TV and bus mobile TV, has developed rapidly. Since 2006, wireless media represented by mobile phones has also become a new growth point. Affected and squeezed by new media, traditional media gradually declined. The advertising market of traditional media such as TV, newspapers, magazines, radio and outdoor has slowed down, and advertisers' investment in traditional advertising media has decreased year by year. In 2007, the advertising turnover of TV, newspapers, radio and magazines totaled 85.443 billion yuan, an increase of 7. 1% compared with 2006, and a decrease of1/kloc-0 compared with the growth rate of 18.2% in 2006. Pet-name ruby Although the traditional media is still in the mainstream position at present, from the development trend of new media, the development of new media has shown a trend of replacing the mainstream position of traditional media. Facing the new media structure, both traditional media and new media have accelerated the pace of coping with competition. The traditional four major media seek to transform into new media, deploy the development of digital TV, mobile TV, network TV, digital broadcasting and electronic magazines in advance, and further accelerate the integration with new media. Following the "Year of Outdoor Media Acquisition and Integration" in 2002, the traditional outdoor media is still strengthening its integration in recent years, realizing large-scale operation and improving its competitiveness by integrating traditional outdoor advertising resources. New media, on the other hand, take advantage of capital to seize resources, compete for territory and step up expansion. Focus Media launched a large number of acquisitions to seize the commanding heights of the future development of the industry. Following the acquisition of frame media and crowd media in early 2006, Ye Hao Advertising was acquired in 2007 to enter the Internet advertising market. At the end of 2007, a series of focus outdoor media such as Hangmei Media, China Television Media and WorldCom Warner went public for financing. In 2007, a large number of new interactive marketing media, such as Internet video websites, online games and mobile Internet, won development capital with their own resources and business models.

2. Advertisers are more rational, pursuing practical results and accurate communication.

After experiencing the era of "one advertisement saves an enterprise" and advertising can make money, advertisers are becoming more and more mature and rational in advertising media delivery, and pay attention to the use of media combination strategies. In recent years, advertisers pay more attention to communication efficiency and return on advertising investment, emphasizing "accurate delivery" and "effective arrival". Pay-per-effect advertising came into being. On June 5438+ 10, 2005, "Narrow Advertising Network" officially announced the launch of the "no click, no charge" advertising model, which provided an economical and applicable marketing tool for small and medium-sized enterprises. Precision marketing forms based on Internet and mobile phones, including search engines, rich media advertisements, online classified advertisements, blogs and mobile Internet, have begun to attract the attention of advertisers. Due to the decline of the advertising effect of traditional mass media, advertisers began to use various emerging focus and niche media as a supplement to traditional mass media. Focus Media and Direct Mail (DM for short) are paid more and more attention by advertisers because of their strong pertinence and low cost. With the rapid rise of emerging electronic media such as the Internet and mobile phones, advertisers have gradually increased their investment in new media from paying attention to and optimistic about new media to trying to use new media. According to the data released by CTR market research, in 2007, advertisers spent 265,438+0% of the total budget on major new media. In 2007, Internet advertising expenditure increased by 48%. Attending in addition to online advertising, instant messaging, search engines, online games and WEB2.0 are the main forms of online advertising. Wireless media represented by mobile phones also attracted the attention of advertisers in 2006. In 2006, BMW launched mobile phone advertisements on Sina, Kong Zhong, Lexun, TOM and other well-known WAP websites through Focus Wireless. In the new market environment and communication environment, advertisers' marketing communication needs have also changed. In order to communicate with consumers more effectively in the increasingly complex communication environment, advertisers urgently need to integrate more diversified and innovative communication means and marketing methods. Offline forms, such as shops, shopping malls, POPs, trade fairs, etc., as a supplement to online advertising, are highly valued by advertisers. In addition to the new form of online advertising, in the context of declining advertising trust and consumers' weariness of conventional advertising, product placement advertising that embeds advertisements in TV, movies and even the Internet began to be favored by advertisers in 2005. Internet interactive marketing, activity marketing, experience marketing, entertainment marketing, guerrilla marketing, product placement marketing and other marketing methods have also been adopted and tried by advertisers.

3. Multinational advertising companies are speeding up in an all-round way, and local companies are actively responding.

In 1990s, multinational advertising groups began to deploy and expand in China. From June 5438 to February 2005, after China's advertising industry was fully opened to the outside world, the expansion of multinational advertising groups in China accelerated in an all-round way. The main performance is that multinational advertising companies increase mergers and acquisitions of local advertising companies, realize resource integration and business complementarity through mergers and acquisitions, and establish a comprehensive local network. In 2002, WPP Group of the United States took a stake in Shanghai advertising company, which opened the prelude for multinational advertising companies to acquire local advertising companies. According to statistics, as of May, 2006, the top five advertising groups in the world had 38 joint ventures in China, including WPP Group 19, Hongmeng Group 5, IPG Group 6, Publicis Group 5 and Dentsu Group 3. On the one hand, multinational advertising groups have increased their expansion and penetration in China, expanded their business scope and competed for market share through mergers and acquisitions or alliances with local high-quality advertising companies. On the other hand, in the face of the growing interactive marketing business and Internet advertising market, multinational advertising companies either set up independent interactive marketing departments or branches, or innovate their services by merging small interactive marketing companies. In May 2006, WPP Group acquired Huayang Lianzhong Advertising Company, one of the largest online advertising companies in China. In July 2007, Publicis Group acquired CCG (Guangxun Pioneer Enterprise Management Consulting Co., Ltd.), the largest interactive marketing company in China. In addition, multinational media buying companies are also stepping up integration, reducing purchase costs and maximizing profits through integration. In 2000, WPP Group merged its media brands Li Chuan, Mai Shi and Shang Yang into Qunyi and established a holding company. In June 2006, Publicis Group integrated its strength communication and star communication media and established Borui Communication. Borui Communication has since become the largest media purchasing organization in China. Facing the threat of multinational advertising companies, local advertising companies are constantly exploring in practice, trying to find a new way out. Local large-scale comprehensive advertising companies mainly start from their own advantages and rely on in-depth understanding of the local market to enhance their planning and creative advantages compared with multinational advertising companies. Local media agency advertising companies (including outdoor advertising agencies) have stepped up their efforts to seize resources and compete for land, which has developed rapidly. Among the top 10 advertising business units in 2007, media plus outdoor advertising companies accounted for half, including a large number of local companies. Some local small and medium-sized advertising companies have chosen the direction of professional development, focusing on providing a certain business, or intensive cultivation in a certain industry to improve their competitiveness. A large number of local advertising companies have emerged in the fields of liquor, health products and real estate. New concept Focus Media and digital media agency companies seek living space through capital operation. In 2006, new media advertising companies such as Health Media, Ye Hao Advertising and Time-sharing Media successfully raised funds. In 2007, a large number of Internet video, online games and mobile Internet companies obtained venture capital.

Third, the future development trend of China advertising industry

1, integration of advertising and marketing communication

Due to the continuous emergence of new media, the communication environment is unprecedentedly complex; Product competition is more intense, and the market environment is complex and changeable; A single advertisement can no longer effectively reach consumers. In this context, advertisers urgently need to adopt new communication methods and integrate various marketing communication tools to reach consumers to meet the needs of brand communication. Therefore, advertising is facing unprecedented challenges, and the living space is squeezed by new marketing methods. In order to expand the living space in the new marketing communication environment and help advertisers communicate with consumers more effectively, advertising companies should not only provide traditional advertising services, but also integrate various communication tools such as public relations, promotion, direct sales and interactive marketing to maximize the communication effect. At present, some multinational and local advertising companies and media buying companies have realized the integrated communication needs of advertisers and started to transform from professional advertising agents or media buying to integrated marketing communication agents. In fact, this business transformation of China advertising company is not the first, but conforms to the general trend of strategic transformation of global advertising companies. In the 1990s, under the background of great changes in the global marketing communication environment, with the concept of "integrated marketing communication" put forward, American advertising professional organizations took the lead in transforming into integrated marketing communication agents. A number of integrated marketing agencies came into being, and powerful advertising companies gradually integrated into a huge marketing service group. Therefore, in the new marketing communication environment, the business transformation of advertising companies and media buying companies will break through the traditional advertising concept, and advertising and marketing communication will gradually merge. The evolution of media forms has brought about changes in advertising forms, and the advertising forms relying on new digital media bear the dual functions of advertising and marketing because of their one-to-one and strong interaction. Relying on the internet, mobile phones and other digital new media advertising forms, the biggest feature is one-to-one, strong interaction, suitable for one-to-one communication with consumers and direct sales, so it has become a part of precision marketing. Search engine advertisements, rich media advertisements, classified advertisements on the Internet and mobile phones, blog advertisements and mobile Internet advertisements are all personalized and precise marketing models based on consumer characteristic data. Therefore, the evolution of media forms means the extension of advertising forms and the expansion of media-based functions. In the new media environment, the extension and function expansion of advertising will also accelerate the integration of advertising and marketing communication.

2. Advertising companies should take the road of collectivization and specialization.

Under the background of economic globalization, with the strategic shift of global customers, the business focus of multinational advertising groups has also shifted to China. A series of mergers and acquisitions in China in recent years show that the expansion and penetration of multinational advertising groups in China are increasing year by year. Faced with the massive attack of multinational advertising groups, local advertising companies urgently need to change the status quo of scattered power and fragmented. Grouping is the inevitable choice for the further development of advertising industry in China. At present, local advertising companies in China are highly dispersed, weak in strength, lacking brands with core competitiveness, and the overall advertising service level is not high. Through the establishment of advertising groups, we can realize large-scale operation, reduce operating costs, improve the core competitiveness of local advertising companies and improve the overall service level of the advertising industry. Since the new century, in the face of fierce competition from multinational advertising groups to the local advertising market, local advertising companies have begun to appear collectivization trend. Some researchers believe that there are three main modes of advertising collectivization in China: first, advertising companies compete for land and seize advertising media; Second, advertising companies operate independently and gradually expand; Third, strong media extends to advertising. The first mode is mainly in the field of outdoor advertising. Some outdoor advertising companies form networks and groups by monopolizing outdoor advertising media. Baima Advertising Group and TOM.COM are the most typical representatives. The second mode is that advertising companies rely on their own strength to integrate resources and form a communication group; The third mode is that strong media rely on media advantages to form advertising companies, public relations companies, direct selling companies and communication groups. A series of cross-disciplinary and cross-disciplinary mergers and acquisitions of Focus Media have initially demonstrated its strategic goal of building a local communication group in China. In any case, collectivization has become the mainstream of the development of advertising industry in China, and it is the general trend of the development of advertising industry in China in the future.

In order to cope with the competition, local advertising companies should not only rely on the establishment of advertising groups to improve their comprehensive strength, but also take the road of specialization. At present, the internal division of labor in the advertising industry has been highly subdivided, and there has been a special division of labor in market research, advertising planning creativity, design and production, and media release. However, the degree of specialization in various fields is not high and it is still in the stage of extensive development. In order to win in the increasingly fierce competitive environment and better meet the needs of customers, only the specialty can win and win the trust of customers through full specialization. At present, in order to survive in the fiercer competition, many small and medium-sized advertising companies have begun to seek business transformation and change their business strategies. They are good at a certain professional service or focus on certain industries to provide more professional services to their customers in order to improve their competitiveness.

Four. conclusion

Since the new century, the advertising industry in China is in a new stage of development: the communication environment and market environment are unprecedentedly complex, new changes are brewing, and new trends are beginning to appear. How can the future advertising industry be unpredictable? But what is certain is that the advertising industry in China will continue to advance in the changing situation.