China’s digital ad market is forecast to grow by 11.5% year-over-year (YoY) in 2022 to over $135 billion with continued expansion over the next few years. However, the pace of growth is forecast to slow down.
This is according to new data from Insider Intelligence which predicts this year will be the last in which the country’s digital ad spending will increase YoY by double digits, with growth expected to drop below 10% through 2026.
The report specifically pointed to the effects of increased regulatory scrutiny on China’s biggest tech companies, such as Tencent, which reported weaker quarterly revenue growth, while citing efforts to comply with the government rules and e-commerce giant Alibaba which posted its slowest quarterly revenue increase since going public.
In December of last year, it was reported that online advertising in China would be subject to tighter scrutiny with authorities updating existing regulatory provisions.
China’s market regulator, the State Administration of Market Regulation (SAMR), has been revising its online advertising guidelines to improve the supervision of internet advertising.
Overall, the country’s digital ad ecosystem is still set for continued growth, outpacing other markets in APAC.
“China’s digital ad growth is still quite healthy going forward,” said Brian Lau, a forecasting analyst at Insider Intelligence.
“It is still stronger than the other major well-developed markets in APAC. Ecommerce and social ad spending will continue to drive overall digital ad growth—together they make up 66% of total digital in 2022.”
You can access the full report here.