Following Ebiquity’s media predictions for 2023 and 2024, the media consulting firm forecasts that actual media buying costs in China for brand advertisers will increase by only 2.1% on average in 2025. This marks the fourth consecutive year, with an increase below 2.8% since 2022.
Based on Ebiquity’s analysis, the projected weighted media cost increase for 2025 is expected to be 0.5 percentage points less than in 2024, reflecting a generally low market price for media buys. This was surmised using data from actual media placement costs between 2020 and 2023, as well as contract renewal and agency pitch quotes for 2024-2025.
On the average cost increases for specific media types, Ebiquity forecasts OTV at 2.2%, digital display at 2.3%, and OOH at 2.8%. However, due to the steady decline in TV ads, Ebiquity predicts a 2.0% decrease in TV media buying costs for the first time. Meanwhile, print media costs are expected to continue dropping by 2.1%.
Stewart Li, managing director of Ebiquity China, observed that based on several contract renewals and agency pitch selection projects the company managed in the past 20 months, prices are either stagnant or deflated.
As China’s economic downturn continues, Ebiquity estimates that media spending by China's Top 500 brands will maintain a slow growth trend in 2024 and 2025. The projected media expenditure growth rate is expected to decline to 2.5% by 2025.
Ebiquity has also conducted research on the 2025 media spend growth forecasts with six leading international media agency groups in China. Their predictions signal a broader market trend towards more cautious advertising investments.
Building upon the trend of modest expenditure growth observed in 2023 and 2024, international media agency groups are now projecting even more conservative figures for media expenditure growth in 2025. The forecasted growth rates fall between 4.3% and 7.5%. Five of these groups unanimously anticipate a decline rate ranging from 0.3% to 2.2% compared to 2024. Publicis, which predicted the lowest growth rate in the previous year, expects no change this time. Specifically, GroupM, Dentsu, and Havas all estimate a growth rate of 4.3% for 2025. MediaBrands forecasts a higher rate of 5.5%, Omnicom predicts 7.5%, and Publicis expects 4.5%.
Meanwhile, financial institutions are adopting a cautious approach when it comes to China’s GDP growth rate for 2024 and 2025. Goldman Sachs projects a growth rate of 4.8%, while the IMF forecasts 4.6%, with an expected dip to 4.5% in 2025.
Several factors influence the forecasts, including adjustments in the real estate sector, global economic volatilities, and the long-term viability of investment strategies. In the first half of 2024, the Consumer Price Index (CPI) experienced a marginal increase of 0.2%. However, the estimated rise for the entire year is expected to reach 1.3%, falling short of the government’s 3% target.
In the context of a slowing economy and a cautious marketplace, Li suggests that advertisers should implement three strategic measures to bolster their competitiveness in the media market. These include evaluation of agency operating models, proactive negotiation, and strengthening transparency and governance.
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