Analysis of China's advertising market and advertisers' marketing trends in 2020

Introduction: This year, the theme that the entire advertising industry and all advertisers are thinking about is nothing more than "How to deal with the impact and changes brought to the market by the new crown epidemic?"

Our advice to the market is: if the epidemic is likened to a long rainy season, then in the future, the advertising industry will urgently need to get used to the working state of "holding an umbrella in one hand and working with the other hand."

1. Trends in China’s Advertising Market in 2020

1. The epidemic has brought important changes to people’s lifestyles

CTR’s survey shows that during the epidemic, more people choose to return to their families, and staying at home has become a normal part of life. At the same time, more and more activities are being transferred online, new shopping habits have given rise to new O2O forms, and the elderly are beginning to become the new Internet generation. At the same time, with the widespread popularization of online teaching for students, people are becoming more and more accustomed to "cloud life"... These are important changes brought about by the epidemic.

As the epidemic develops, people are paying more attention to and caring more about their physical health. From our data, we can see that more people plan to make themselves stronger by doing more exercise after the epidemic ends.

What changes will all these changes in people’s lifestyles caused by the epidemic bring to the advertising market?

2. At the beginning of the epidemic, the market's responsiveness declined

According to CTR’s monitoring data from January to June, the advertising industry has experienced a very sharp decline since the lockdown of Wuhan on January 22. As the epidemic situation gradually stabilizes, the market is slowly turning around, but overall it still shows negative growth.

Data source: CTR Media Intelligence

During this process, advertising in many categories dropped sharply. We selected data from the week before the outbreak and the first week after the outbreak, and compared them with the same period last year. We can see that although there was also great downward pressure on the market last year, this pressure has undoubtedly become even greater after the outbreak: for example, TV advertising in the entertainment and leisure categories has dropped from -4.8% last year to -48.8% this year.

3. Not pessimistic: some categories achieved growth

Although the epidemic conveys a general sense of pessimism, there is still good news in the market. In the first half of this year, some categories achieved rapid growth, including: health-related categories, such as water dispensers, water purifiers, medicines, and health foods; entertainment-related categories, such as digital products, APPs, and game consoles; and categories related to daily necessities, such as grain, cooking oil, household paper, kitchen appliances, etc.

Data source: CTR Media Intelligence

If we look back at the market after SARS in 2003, we will find the same situation. Moreover, the subsequent growth in advertising for several categories that grew rapidly in 2003 (cleaning products, medicines, and categories related to immunity enhancement) continued for a considerable period of time. This proves that the impact of a seemingly sudden epidemic is long-term and long-lasting.

2. Marketing trends of advertisers in 2020

1. Advertisers lack overall motivation to place ads

In this context, how do advertisers view future marketing trends? CTR's continuous survey of advertisers shows that this year, advertisers' overall marketing motivation is insufficient. For the first time in the 11 years since the survey began, the proportion of advertisers planning to reduce their investment exceeded the proportion of advertisers planning to increase their budgets.

Data source: CTR Media Intelligence

Out of caution, many medium-sized advertisers focus their advertising efforts on first-tier cities. Super-large-scale advertisers will transfer their costs to county markets.

Data source: CTR "2020 Advertiser Marketing Survey Report"

2. Performance-based advertising is popular

71% of advertisers, represented by advertisers in daily chemicals, home appliances, and food and beverage categories, expect to increase spending on conversion-based marketing. When they choose conversion platforms, they pay more attention to efficiency and scale. 73% and 69% of advertisers said they would increase the budget allocated to live streaming and short videos respectively. Advertisers of daily necessities, home appliances, and transportation have a higher demand for short videos and live broadcasts. In comparison, the budget allocated to information flow ads has decreased year-on-year.

Data source: CTR "2020 Advertiser Marketing Survey Report"

3. After the popularity of live broadcast and short videos: companies pay more and more attention to brand power

At the same time, we also saw a lot of reflections from advertisers in the survey. For example, with live streaming sales, companies have seen its advantages, such as sinking users, improved experience, fan effect, private domain traffic advantages, etc. But at the same time, advertisers are also keenly aware that the impact of live streaming on brand accumulation is limited and insufficient. At the same time, live streaming is highly dependent on low prices, which may lead companies into fierce price wars. Customers come and go with the price, making it impossible to bring about continuous purchases.

Under the influence of the epidemic, the greater use of live broadcasts and short videos has indeed helped many companies. In fact, with the rapid growth of live streaming and short videos, companies are beginning to pay more and more attention to brand power. Companies are starting to think more about this: When fans enter the live broadcast room, in addition to the host’s appeal, is there any dependence on the brand? Do products with strong brand equity have better bargaining power over their competitors in terms of price? These all come from the long-term accumulation and sedimentation of the brand.

4. In exposure advertising, outdoor media, TV media and smart large screens are more valued

In addition to conversion-type ads, advertisers also show a positive tendency to place exposure-type ads. For example, in outdoor advertising, advertisers’ budget for advertising in commercial building elevators has increased by more than 30%. In addition, digitalization brings more opportunities for outdoor advertising, and the online delivery of outdoor advertising brings corresponding data collection capabilities, which also lays a fundamental foundation for advertisers to intelligently grasp and manage the delivery effects.

Data source: CTR "2020 Advertiser Marketing Survey Report"

Among exposure-type advertising, there is also a very important category, which is television media. CTR's survey shows that advertisers still value the authority and positive value of television, which is also the value that is difficult for current Internet platforms to bring. With the advent of the 5G era, home large-screen TVs represented by televisions will present a different prospect in the future. As a concentrated representation of the value of television, among television media, advertisers' placement choices are more concentrated on CCTV. Survey data shows that advertisers' demand for placement on CCTV is still increasing.

Data source: CTR "2020 Advertiser Marketing Survey Report"

In addition, the value of home scenarios has also attracted the attention of advertisers, and the proportion of OTT advertising has increased. In 2019, the proportion of advertisers choosing OTT advertising reached 41%, far higher than 13% in 2015. This means that as smart large screens mature, smart delivery will bring advertisers more advertising creativity, advertising formats, and more possible communication opportunities.

Data source: CTR "2020 Advertiser Marketing Survey Report"

3. The future: holding an umbrella with one hand and working with the other

The start of 2020 was not easy. Judging from the specific data, the overall data of the advertising industry is still negative and has not returned to positive growth. But from a month-on-month perspective, that is, compared with last month, both media formats and major categories have increased month-on-month. This positive growth is driving the entire market to move slowly in a positive direction.

Although the epidemic has put the entire advertising industry under tremendous pressure, advertisers have never stopped. After this change, the industry also realized that advertising is not just what was originally defined, but more of a way for brands to establish connections with consumers.

If everyone used to work on sunny days, the arrival of the epidemic is more like a rain, and perhaps the time we will face in the future will be rainy season. This also means that we have to get used to working on rainy days in the future. The epidemic will become normalized, and this normalization will become a part of our normal life.

To this end, we need to build our own immunity, and immunity is the brand for brand owners. Only with a brand can you have stronger immunity before the attack comes. Many companies have driven growth through live streaming during the epidemic, and this growth came from the digital integration of live streaming and e-commerce. Therefore, doing digitalization well is to build your own immune system. At the same time, paying more attention to the community and deepening our understanding of the community can also help us develop new immunity.

In the future, we may have to get used to working with one hand holding an umbrella and the other hand. I hope that in 2020 everyone can ride the wind and waves, overcome all obstacles, and show our heroic qualities in difficult times.

Author: CTR Insight

Source: CTR Insights