Shanghai, China – New data suggest that net buying cost inflation of leading advertisers in China to be under 3% in 2023, with this year seeing a 10% to 15% cut in media budgets by advertisers, according to the latest report from media investment management company Ebiquity.
According to the data, traditional net media inflation will range from 0% to 2.5% while print media buying cost will witness a 4.2% decrease. Meanwhile, Chinese digital media net cost inflation will hover in the range of 3% to 3.5%.
The data also notes that 2022 has been a tough year for the Chinese advertising industry due to a restricted GDP growth of 3%. This was largely because of the Chinese government’s imposition of ‘Zero-Covid’ policy, where several key cities have experienced extended lockdowns.
Commenting on the forecast, Stewart Li, managing director for Ebiquity China said, “Several global economic institutions have lowered China’s 2023 GDP forecast from 5.3% to 4.5% in September. This has led Ebiquity China to predict another soft year for the advertising industry. Our recommendation for advertisers is to implement a proper media cost management program with their media agencies so that they can negotiate for a tough 2023 media buying cost and KPI.”
He added, “While the budget cuts from leading advertisers have had a significant impact on multinational media agency groups with some forced to announce layoffs in 2022, the impact has been severe for local agencies too. The top 8 locally listed advertising companies’ first half 2022 financial reports show that their revenues experienced negative or soft growth year-on-year.”