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What Does China’s Revised Adspend Forecast Mean For Others?

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What Does China’s Revised Adspend Forecast Mean For Others?

As life in China slowly begins to return to normal, the draconian measures that were earlier implemented to curb the spread of the virus have taken a toll on the country’s economy. The two-month-long pandemic forced businesses to halt operations and residents to remain indoors, causing a stint in the country’s economic growth. This also forced Dentsu Aegis Network (DAN) to revise their forecasts of the country’s advertising spend for the year.

According to the report; DAN predicts a growth of 3.9% for 2020, a higher rate than the 3% observed in 2019, but a sharp revision from the 6.9% the network previously predicted. Mobile will continue to be the growth driver as it accumulates almost 77.5% share of total digital advertising spend. This will only continue to grow with the expansion of 5g.

During the lockdown, consumers took to e-commerce platforms to make essential purchases – heavily influencing its growth. The revised forecasts expect the sector to capture a share of 42.4% of all digital ad spend in 2020.

As other countries including the region continue combatting the virus, uncertainty prevails as to what will be the state of the MENA advertising market in the months to come. Will there be a revision of forecasts here as well? Communicate got in touch with Anouk Bondroit, managing director at Vizeum MENA, to help get a clearer picture of the situation.

Will there need to be a revision in the forecast for ad spending in the MENA market as well?

We expect there to be a marked decrease in forecasted spends for 2020. The main influence on how significant this decrease will be is whether planned Ramadan activities will go ahead or not. Ramadan is a key sales and advertising period in our region, particularly for the automotive category, so if the situation continues- this will heavily impact spends.

What measures can we adopt to better prepare ourselves in the current climate?

Contingency and scenario planning are fundamental to preparations. We must collaborate closely with our clients and media partners to find workable solutions. Despite many of us working from home, ensuring our teams are working together with no silos to deliver on workstreams is vital.

Will mobile and e-commerce experience the same boost as it did in the Chinese market during the crisis?

We are already seeing this happening. E-commerce enabled brands are better equipped to continue pushing campaigns live. However, brands need to consider whether they want to be actively present during the peak of this crisis.

From a wider perspective, what are the key things we should take away from this crisis to better prepare ourselves for the future?

The safety of our people is the number one priority and having reliable business continuity plans, that enable us to do our jobs is vital. Looking at how businesses are handling the situation has brought to light how prepared or not, we all really are. We have a good IT infrastructure and agile working culture in place, so the impact has not been too significant on our business.

Personally, this has shown me that we all have the ability to adapt fast to a crisis situation and the digital world has geared us towards this. We are all working as one team, across borders, sharing and learning from each other. I look forward to our office, country, and the world coming back together after this time apart as we celebrate turning all of our digital connections into face to face.

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