China’s social media ad spending surged 23.6% in the first quarter of this year, driven by a significant increase in users on platforms such as ByteDance Ltd.’s (BYDTF.O) TikTok and Douyin, according to a report from research firm eMarketer.
The growth in social media ad spending comes amid a broader shift towards digital advertising in China, with online ad expenditure projected to reach $43.3 billion this year, up 15.1% from last year, the report said. This represents about 60% of total Chinese ad spending, which is expected to reach $72.4 billion.
The increase in social media ad spending was driven by a significant rise in users on platforms such as TikTok and Douyin, with eMarketer projecting that these platforms will account for 23.6% of China’s social media ad market share this year, up from 16.8% last year.
Market Move
The growth in social media ad spending is having a positive impact on the market, with shares of ByteDance Ltd. rising 12.5% in Hong Kong trading to HK$93.4 per share, while shares of Tencent Holdings Ltd. (0700.HK), which owns a minority stake in Douyin, rose 1.8% to HK$420.2 per share.
However, the growth in social media ad spending also raises concerns about data privacy and security, with regulators increasing scrutiny on tech giants over their handling of user data. The Chinese government has already launched an investigation into ByteDance’s data collection practices.
Drivers
The growth in social media ad spending is driven by a shift towards digital advertising in China, with online ad expenditure projected to reach $43.3 billion this year, up 15.1% from last year, according to eMarketer.
The increase in social media ad spending is also driven by the rise of short-form video platforms such as TikTok and Douyin, which are popular among younger generations. According to a report by Sensor Tower, TikTok had 34.5 billion downloads worldwide as of April this year, while Douyin has over 500 million monthly active users.
Reactions/Quotes
“The growth in social media ad spending is driven by the increasing popularity of short-form video platforms such as TikTok and Douyin,
