2021 China Advertising Market Trends

Overall Trends in the Advertising Market

According to data from CTR Media Intelligence, the overall increase in the advertising market in the first half of 2021 reached 23% , which is particularly remarkable compared to the continuous decline in the past two years.

Television, radio, and elevator advertising all achieved growth. Cinema video advertising , which was hit hard last year, also recovered this year with a 700% increase. Such positive growth represents an overall rebound in market fundamentals.

Looking at the top ten categories in terms of advertising volume, most of them showed positive growth, especially food, medicine, cosmetics and bathroom products that are closely related to people's livelihood, with the overall growth rate exceeding 30%. The main categories involved in advertising have entered a period of positive growth.

Due to the impact of the epidemic, consumers pay more attention to health and love themselves and their families more. Therefore, categories related to beauty, health, and personalization, such as clothing, cosmetics, personal health products, glasses, skin care products, etc., have seen even more encouraging growth.

Advertising market data reveals an overall restorative growth, which is mainly due to advertisers’ positive predictions and confidence in the market.

According to CTR's marketing surveys on advertisers conducted over the years, this year advertisers' confidence in themselves, their industry and the overall market situation has increased significantly compared to the lows of the previous two years.

The increase in confidence is also reflected in advertisers' marketing expenses. Affected by the epidemic at the beginning of last year, advertisers generally stated that they would reduce their budgets. This was also the first time that the number of advertisers increasing their budgets was lower than that of advertisers reducing their budgets, thus forming a scissors gap.

The gap is back again this year, with 44% of advertisers choosing to increase their marketing budgets and 19% reducing their marketing budgets . This means that the marketing pie has expanded compared to last year. This trend has a positive impact on the media, but it is not easy to capture the incremental growth .

China's brand confidence upgrade leads the growth of the Chinese market

With the overall growth of the market, Chinese brands have become an important manifestation of market vitality.

According to data from CTR Media Intelligence, among the top 20 brands in advertising from 2011 to the first half of 2021, the proportion of domestic brands has gradually increased, from 50% in 2011 to 90% now. The top brands in the advertising market are basically fully covered by domestic brands. This is an outstanding manifestation of Chinese brand confidence.

From the perspective of key industries , domestic brands have performed more impressively. Comparing the top industries such as food, beverages, IT products and services in 2016 and 2021, the proportion of domestic products in their top 20 brand lists has also changed dramatically . The proportion of domestic brands in the food category increased from 35% to 70%, and in the beverage category from 50% to 80%. As for the IT products and services industry, 80% of the brands were domestic brands in 2016, and this year they are 100% domestic brands .

Whether it is the use of cross-media platforms or the use of stories and content platforms to establish closer communication with consumers, domestic brands have a better understanding of Chinese consumers and have demonstrated sufficient flexibility throughout the entire marketing campaign.

From a horizontal perspective, Chinese brands use a variety of marketing methods to establish communication channels with consumers. From a vertical perspective, domestic brands have many personalized and creative expressions in establishing relationships with consumers.

The value delivered by Chinese brands’ marketing content is becoming increasingly rich. Through data analysis of CTR Media Intelligence's AdBank advertising creative version library, it was found that this year's main value marketing of Chinese brands revolves around Chinese culture, healthy lifestyle, competitive sports spirit, emotional values ​​of love and protection, self-improvement, and caring for oneself.

As the country's national strength increases, especially with the effective control of the epidemic, the national sense of pride has increased. Chinese brands are constantly conveying positive, diverse, and upward personalized values ​​to society, which is also a manifestation of the booming market as a whole.

New variables and new challenges

CTR's insights not only show the booming, positive and dynamic Chinese advertising market, but also the pressure that companies are under as the economic environment changes.

First of all, looking back at the data from 2019, we found that even with a 23% growth this year, the market still declined by 2.7% compared to 2019. This means that although we have made great growth in 2021, we still have a certain gap compared to 2019 .

Secondly, with the implementation of the Data Security Law, the Cybersecurity Law, and the Personal Information Protection Law which will be implemented on November 1, the three have established a legal barrier for privacy protection and created a safe network environment for consumers. However, it will be a significant impact on the Internet's marketing ecosystem.

The precision marketing promoted by the Internet provides business owners with a way to quickly reach consumers. However, there is also data abuse behind this, including labeling of personal information and quickly guiding consumers to import from one platform to another to achieve sales conversions.

The improvement of laws and regulations is a very important challenge for platforms. Platforms that rely on a single model and only target personal tags will face very big adjustments.

Looking back ten years ago, television advertising was in its golden age. Order No. 61 and the restrictions on advertising in TV dramas caused television advertising to lose 10 to 20 billion in market space.

Now, the impact of the introduction of the Personal Information Protection Law on China's digital advertising is roughly estimated to be in the hundreds of billions . Under regulations, advertisers face the challenge of temporarily losing touch with consumers. At this point, how should advertisers re-establish connection with consumers?

Under the new rules, trust bonds need to be built urgently

CTR believes that the first thing to do is to return to brand building.

When consumers can be reached in a variety of ways, advertisers often choose to quickly establish relationships with consumers and make their products popular by attracting traffic and spending money.

However, creating a hit product is not the same as building a brand. When many products are using traffic to drive hits, it will only become a competition for capital rather than a value competition between brands, and it will not achieve the accumulation of real brand value.

If a brand does not want to be just a flash in the pan but wants to become a century-old business, it needs to make long-term efforts and accumulation, continuously and unremittingly establish the connection between the brand and symbols in the minds of consumers, occupy the minds of consumers through products and services, and establish a close emotional relationship with consumers.

It turns out that brand owners have taken too many shortcuts, but shortcuts can also be detours. We still need to return to the ultimate goal in the end, hoping that consumers will recognize the brand and be willing to work with the brand.

Second, leverage the combined resonance of media to establish a more comprehensive and closer relationship with consumers.

In the past, an “intimate” relationship between consumers and brands was established through user privacy information. With the introduction of relevant laws and regulations such as information security, whether this personalized push is still effective and to what extent the effect will be affected still needs to be verified with time and practice.

However, the more scientific and safe approach at present is to identify the value of different media and use a diversified media combination to enhance the brand's comprehensive communication capabilities.

The fragmented media environment requires brand owners to have the ability to identify the value of media. It is difficult to achieve good results by choosing media alone in today's environment.

For brands, in order to meet the diverse needs of audiences, personalized media provides brands with personalized values ​​to cater to and match the individual needs of consumers, such as social media, short videos, etc.

However, we cannot ignore the authoritative media’s powerful endorsement and ability to shape the brand’s core values . Otherwise, it will be impossible to establish the brand’s communication effect from niche to mainstream and from small-scale to large-scale.

At this time, television media, including central-level media, will have many new opportunities. Advertisers should also make full use of the role of these authoritative media.

In addition, scenario-based media is integrated into consumers' living space, and has the advantage of being subtly close to consumers. If a brand can link various scenarios where consumers appear to form a fusion and resonance effect, it will be more conducive to the brand's popularity.

After the scenarios and media are selected, it is also important to pay attention to the transformation from content dissemination to content strategy. If in the past advertising and content were matched, then in the future advertising will be content, and content will be advertising. Advertising and content will no longer be separated.

For enterprises, content was originally a carrier and a shell of marketing. In the future, content will become one of the essences of the entire enterprise strategy. Only good content can gather highly compatible consumers. This is also the axis that drives the product from dissemination to channels to final purchase.

3. Establish a first-party data platform to form a trusted connection with consumers

The establishment of a private domain platform is not only to bring traffic from large platforms to the company's own platform, but also to aggregate consumer data in the hands of the brand.

Therefore, business owners must start building their own first-party platform no matter how difficult it is. Only in this way can we obtain direct authorization from consumers through our own platforms, have the opportunity to establish direct communication channels with consumers, and continuously build interactive services or content that meet the needs of consumers on the platform, and ultimately build an inseparable and mutually beneficial relationship between products, services and consumers.

Lean brand private domain construction requires a professional, scientific and efficient support system. Currently, CTR has established a monitoring and evaluation system for omni-channel marketing to fully assist advertisers in every aspect of marketing decision-making and grow together with the company.

The development of digitalization is still on the way. Whether it is anonymization processing, multi-party computing, or federated learning, etc., they can ultimately be solved through technology.

When we cannot process data across domains, centers that help with data transactions will emerge. When companies want to become first-party platforms, service providers and tool providers will emerge. Everything is unknown, but what is certain is that there are new business models on the way.

If everything we do is to help brand owners and consumers build closer relationships, establish relationships of mutual trust and interdependence, from having confidence in the market to ultimately building trust with consumers, such a relationship will inevitably lead to subsequent business success . I believe all of these will make our future better.

Author: CTR Insight

Source: CTR Insight (ID: chinainsight)