China's Rising Middle Class Drives Mobile Ad Spend

More than one-third of all mobile ad dollars in Asia-Pacific will be spent in China this year, driven by a thriving middle class of early adopters, according to an eMarketer report.

China’s total mobile digital ad spend will increase from 15 percent in 2014 to 50 percent by 2018, as brands take advantage of China’s growing digital consumers, notes the research.

Martin Utreras, senior forecasting analyst at eMarketer, says China’s upper middle class is driving much of the growth and spending for online and mobile ads. “These young adults are early adopters of technology and are starting to lead income gains. For marketers, this cohort represents a great opportunity to build brand loyalty through digital means, which are native to these consumers,” he says.

Utreras attributes much of China’s digital mobile spend to growth coming from China’s outer-tier cities where consumers have less access to shopping malls and retail outlets, and, as a result, are more inclined to turn to online shopping and other e-commerce channels compared to consumers in China’s tier one and tier two cities.

“This [digital growth] is driven by demographics and China’s investment in digital infrastructure, which is focused on creating a consumer driven economy. Consumers’ time spent with digital media has increased a lot as a result,” says Utreras.

Beijing-based Craig Zhang, chief executive(CEO) of digital marketing agency mJoule, says in China, for branding purposes, digital is the backbone, and mobile even more so.

“Chinese people are addicted to mobile phones and this is why ad spending is growing so quickly in China,” says Zhang.

Zhang’s advice to marketers in China is to consider mobile digital strategies with rich media and rich content, where mobile has become the integrator between social, video, and commerce, and is especially important for online-to-offline (O2O) commerce in China.

“Try new and brave things to entertain your target audience, Chinese people are early adopters – they love new things,” he says.

Regionally, China’s mobile Internet spending is expected to grow 210 percent this year, alongside other hot growth markets Australia, at 150 percent, and South Korea, at 120 percent, according to eMarketer.