China's mobile internet landscape continues to evolve, driven by key growth factors and challenges. With over 1.2 billion mobile internet users spending an average of five hours daily on their devices, short-video, social commerce, and live-streaming apps dominate, accounting for 60% of screen time. The "2024 Mobile Advertising Traffic White Paper" provides a comprehensive analysis of these developments, highlighting key trends and offering strategic insights for businesses aiming to navigate this dynamic environment effectively.
Growth Drivers
The surge in engagement has fueled an 18% year-over-year increase in mobile ad spending in 2023, as brands prioritize performance-driven campaigns such as app installs and e-commerce conversions. Leading platforms—ByteDance (Douyin), Tencent (WeChat), Kuaishou, and Alibaba (Taobao)—control 75% of mobile ad traffic, leveraging AI-driven targeting and closed-loop ecosystems to maximize ad effectiveness.
However, the market faces significant challenges. User acquisition costs (CPA) have surged by 22% due to increasing competition for high-quality traffic. Stricter privacy regulations, such as China's PIPL, are limiting third-party tracking, compelling brands to adopt first-party data strategies. Additionally, ad fatigue is a growing concern, with 65% of users skipping pre-roll ads, pushing advertisers to develop more native and interactive formats to maintain engagement.
2024 Trends Reshaping Mobile Advertising
In 2024, over 700 million advertisements were tracked across the digital landscape, with three key industries—cultural entertainment (23.4%), social dating (21.1%), and gaming (20.7%)—accounting for more than 65% of total ad spend.
1- Cultural entertainment experienced a significant surge in Q4, led by ByteDance’s platforms (Douyin/TikTok). This sector dominated 32.3% of total ad spending, fueled by viral content and heightened engagement during holiday seasons.
2- Social dating saw a major boost during peak festive periods such as Chinese New Year, as brands ramped up aggressive user acquisition campaigns to capitalize on increased social interaction demands.
3- Gaming maintained strong momentum, recording a 12% year-over-year (YoY) increase in ad spend. This growth was largely driven by highly anticipated releases, including Honkai Impact: Origin from MiHoYo and Need for Speed: Heat from Tencent, intensifying competition within the market.
Trends in Advertising Formats
Orientation: The share of vertical video ads decreased notably compared to 2023, while image-based materials saw an increase, comprising 35.8% of ad content. This trend suggests that smaller developers or teams, possibly due to budget constraints and the need for testing, leaned towards more cost-effective image-based ads.
Duration: Advertisers favored shorter video ads, primarily under 30 seconds. Life services materials predominantly featured 5 to 15-second videos (45.5%), whereas social and dating apps favored the 15 to 30-second range. This inclination towards brevity aligns with strategies like rapid montage editing and caters to users' decreasing attention spans, aiming to boost completion rates.
Platform-Specific Insights
Douyin (TikTok) utilizes high-impact ad formats such as TopView (full-screen ads), Brand Takeovers, and Challenge hashtags to drive engagement. User-generated content (UGC)-style ads tend to perform exceptionally well, boasting 35% higher completion rates, as they blend seamlessly with organic content and enhance viewer retention.
WeChat, China’s super app, provides multiple ad placements catering to different marketing objectives. Moments Ads, often used by luxury brands like Louis Vuitton, create immersive storytelling experiences within users’ social feeds, capitalizing on WeChat’s private traffic ecosystem. Meanwhile, Search Ads are integrated into WeChat Search, allowing advertisers to target users actively looking for specific services, such as travel bookings or financial products.
Kuaishou, known for its stronghold in lower-tier cities, attracts a user base where 60% come from Tier 3–5 cities. This makes it an ideal platform for budget-friendly brands such as Pinduoduo, which thrive on price-sensitive consumers. Additionally, Live Commerce plays a crucial role in Kuaishou’s ecosystem, with livestream hosts generating 70% of the Gross Merchandise Value (GMV) for small and medium-sized businesses (SMBs), demonstrating the platform's effectiveness in driving direct conversions.
User Engagement and App Popularity
WeChat maintained its leadership in Monthly Active Users (MAUs), with platforms like Taobao, Alipay, and Douyin also retaining strong positions. Notably, Bilibili and Xiaohongshu (Little Red Book) experienced significant growth, indicating heightened activity among younger demographics. Additionally, Baidu's penetration rate rebounded, likely due to improved search experiences facilitated by AI advancements.
Quark led in total downloads, a success attributed to its integration of AI features and strategic advertising. Remarkably, four out of the top five downloaded apps were under ByteDance's umbrella, underscoring the company's robust influence in the mobile app market.
The 2024 Mobile Advertising Traffic White Paper highlights that success in China’s mobile ad market depends on agility, creativity, and data-driven precision. As competition intensifies, brands that innovate in ad formats and audience targeting will lead the next wave of digital engagement. Stay ahead of the curve with China Trading Desk—your expert partner in navigating China’s dynamic advertising landscape. Contact us today to unlock smarter, more effective mobile marketing strategies.
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