Growth in China: Digital Marketing Spending Expected to Increase 20% This Year

Digital marketing spending is expected to grow 20% in 2021, according to the  China Digital Marketing Trends 2021 report from the Miaozhen Academy of Marketing Science (MAMS), the Global Digital Marketing Summit (GDMS), and Media 360. That could create significant opportunity for related companies such as Adcore Inc. (TSX:ADCO)(OTC:ADCOF), Facebook (NASDAQ:FB), Acuity Brands Inc. (NYSE:AYI), Trade Desk Inc. (NASDAQ:TTD), and Shopify Inc. (NYSE:SHOP). In fact, the report based on surveys of 300 advertisers from more than 20 different industries found that “47% of advertisers expect China marketing investment to increase. Total marketing spending is projected to grow 17%, after 8% actual growth in 2020 and 78% of advertisers said they would increase their digital marketing spending. Digital marketing spending is projected to grow 20%, after 16% actual growth in 2020.”

That’s a big catalyst for Adcore Inc. (TSX:ADCO)(OTC:ADCOF)

Adcore Inc. a leading e-commerce advertising management and automation platform to leverage digital marketing in an effortless and accessible way today announced that it will expand its presence in China with the opening of a corporate office in Shanghai later this month. The establishment of this office follows the opening of Adcore’s regional headquarters in Hong Kong in early 2020, and reflects the Company’s commitment to the rapidly growing digital advertising market in the Asia-Pacific region.

Omri Brill, CEO of Adcore, stated, “Following the immense success the company experienced from launching our Hong Kong office nearly a year ago, we are excited to strengthen our foothold in China with the opening of a mainland office in Shanghai. When we announced the opening of our Hong Kong office, we noted the growing importance of digital advertising in China, which is expected to be $128 billion in 2021. To provide some additional context, according to a study by McKinsey & Co, before COVID-19, China was already a digital leader in consumer facing areas, accounting for 45% of global e-commerce transactions, and consumers and businesses in China have accelerated their use of digital technologies as a result of the pandemic. With our wide-reaching platform, Adcore is well-positioned to partner with Chinese companies seeking to reach a global customer base and we have already seen tremendous interest in our marketing technologies coming from China. The expansion of our presence to the Mainland puts us closer to our Chinese clients and provides a local team that’s fluent in Mandarin, which we believe will accelerate our growth, open new opportunities and drive further penetration of this valuable market.” Mr. Brill added: “I couldn’t be more thrilled about the launch of our Shanghai office as I believe China will be a major growth engine for our company in 2021 and beyond.”

Gal Itkin, General Manager of Adcore Greater China, commented, “Shanghai is a technology hub where both retailers and consumers rely heavily on digital advertising to sell products to the global market as part of their day to day commerce. As more companies look to expand their digital marketing reach, Adcore offers the ideal solution to leverage platforms such as Google, Facebook and Microsoft that are not directly accessible from China. We believe our presence on the Mainland, backed by our regional headquarters in Hong Kong, together with our platform’s capabilities, will allow us to heighten our marketplace recognition and attract a larger share of the vital and growing businesses located in this region.”

Other related developments from around the markets include:

Facebook (NASDAQ:FB) reported financial results for the quarter and full year ended December 31, 2020. "We had a strong end to the year as people and businesses continued to use our services during these challenging times," said Mark Zuckerberg, Facebook founder and CEO. "I'm excited about our product roadmap for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun."

Acuity Brands Inc. (NYSE:AYI) announced results for the first quarter ended November 30, 2020. First quarter net sales were $792 million, a decrease of 5.1% compared with the prior-year period. Operating profit margin of 10.8% increased 80 basis points and adjusted operating profit margin of 13.2% decreased 110 basis points compared with the prior-year period. Net income was $60 million, an increase of 4.6% compared with the prior-year period. Diluted earnings per share (EPS) of $1.57 increased by 9.0% and adjusted diluted EPS of $2.03 decreased by 4.7% compared with the prior-year period. Net cash provided by operating activities totaled $124 million for the first quarter of fiscal 2021 compared with $130 million in the prior year.   

Trade Desk Inc. (NASDAQ:TTD) announced financial results for its fourth quarter and fiscal year ended December 31, 2020. “While 2020 was a uniquely challenging year, it was also a turning point for our industry and our company. We won more share in our fastest growing channels such as CTV and Audio, which helped drive record ad spend of $4.2 billion on our platform in 2020,” said Co-Founder and CEO of The Trade Desk, Jeff Green. “Perhaps just as important, in 2020 we saw several years of advertising disruption and innovation compressed into a few months. Marketers are being more deliberate and data-driven in everything they do, and as a result, they are gravitating to the advertising opportunities of the open internet. With CTV now offering a data-driven alternative to linear, with brands seeking a scalable and brand-safe alternative to user-generated content, and with new identity tools that provide a common currency for the open internet as well as enable better cross channel measurement, the industry is gravitating to the open internet and standardizing on our platform.”

Shopify Inc. (NYSE:SHOP), a leading global commerce company, announced today strong financial results for the fourth quarter and full year ended December 31, 2020. “The spirit of entrepreneurship was strong in 2020, as our merchants’ resilience and ability to adapt helped many of them thrive in a difficult year,” said Harley Finkelstein, Shopify’s President. “Shopify is at the heart of our merchants’ businesses with entrepreneurs around the world trusting us with their livelihoods. This year, we are doubling down on creating a frictionless path to successful entrepreneurship, as we continue to build a future-proof commerce solution to serve generations to come.”

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