Ebiquity China report: International agency groups dominate, but local agencies are catching up

Ebiquity China recently released a research study revealing that six major international media agency groups manage 24.6% of key brands' media spending in China, while the top six local agency groups account for 14.1%.

Ebiquity's recent study categorises the top 12 media agencies in China for 2023 into three distinct tiers based on their billings.

• 1st-tier agencies, with billings exceeding RMB 30 billion (US$ 4.15 billion): GroupM and Publicis
• 2nd-tier agencies, with billings in the 10 billion RMB (US$ 1.38 billion) range: OMG, GIMC, Leo, BlueFocus, Dentsu, and Zhewen
• 3rd-tier agencies, with billings in the several billion RMB range: Hylink, Three's, Mediabrands, and Havas

Ebiquity also noted that COMvergence has updated its methodology for projecting the 2023 billings and market share of the top six global advertising groups, focusing solely on paid media buying billings and excluding the media budget for agencies' planning services.

COMvergence data reveals that the advertising spending of China’s leading brands hit RMB 494.7 billion (US $70 billion) in 2023, marking a 6.1% rise from 2022. This spending refers to the key brands’ budgets managed by major advertising agencies, making up 38% of the overall scale of China’s advertising market.

Meanwhile, Ebiquity analysed data from the State Administration for Market Regulation, the official regulatory body for the advertising industry in China. The total advertising expenditure in 2023 amounted to RMB 1,312.1 billion (US$ 185.7 billion), reflecting a significant growth of 17.5%. This expenditure includes the revenue of advertising industry entities and large enterprises across China, effectively representing the total volume in the world’s second-largest advertising market. 

Ebiquity also observed that the Chinese advertising market has experienced volatility in recent years, but 2023 showed signs of recovery as GroupM, Publicis, and OMG achieved growth rates of 1.5%, 8.1%, and 10.2%, respectively.

Among international agencies, GroupM still dominates the China advertising market with a substantial 10.9% share, edging out close competitors Publicis (6.6%) and Omnicom Media Group (3.4%). However, Dentsu has descended to the fourth spot with a 2.8% share, while Mediabrands (0.6%) and Havas (0.3%) find themselves in the lower tiers.

• In 2023, GroupM's new business (including retentions) surged by RMB 7.51 billion (US$ 1.04 billion), despite a loss of RMB 2.28 billion (US$ 315 million), leading to a net gain of RMB 2.58 billion (US$ 357 million). With a retention rate of 68% and a modest billing increase of 1.5%.
• Publicis exhibited strong growth, acquiring new business valued at RMB 5.61 billion (US$ 775 million), achieving a retention rate of 98% and a notable net increase of RMB 2.3 billion (US$ 318 million), translating to an 8.1% growth.
• OMG was also strong, with new business totalling RMB 1.53 billion (US $211 million). Despite a loss of RMB 1.33 billion (US$ 180 million), OMG reported a net gain of RMB 0.78 billion, equivalent to a 10.2% growth, albeit with a lower retention rate of 36%.
• Dentsu, Mediabrands, and Havas experienced billing decreases of 4.6%, 7.9%, and 18.2%, respectively.

Among the top international agencies’ brands, Mindshare’s market share has seen a decline from 5.1% in 2022 to 4.4% in 2023. In contrast, EssenceMediacom and Zenith Media have maintained stability with shares of 3.8% and 3.0%, respectively. Wavemaker and Starcom have also demonstrated stability, accounting for 2.6% and 2.5% of the market. OMD and PHD, holding shares of 1.8% and 1.5%, rank sixth and seventh, undergoing slight variations.

In the context of rankings, Wavemaker, OMD, and Initiative have made gains, with OMD moving up by two spots. On the other hand, Spark Foundry, Carat, Dentsu X, and Havas have experienced a drop in their rankings.

The local group's market share witnessed a minor decline despite a slight increase in annual billings

Ebiquity also analysed the 2023 annual reports from six local advertising groups and finds that the total billing by domestic agencies amounted to RMB 69.8 billion (US $9.9 billion), accounting for 14.1% of the advertising market for key brands in China, as estimated by COMvergence. This figure indicates a slight increase of 0.8% in billing compared to 2022. The data has been adjusted to exclude BlueFocus' outbound advertising billing and Leo Group's non-advertising business for comparability.

GIMC emerges as the leader with an advertising billing of RMB 16.7 billion (US$ 231 million), claiming a 3.4% market share (+14.2%) and rising to the top spot among the locals. Leo closely follows with a billing of RMB 16.5 billion  (US$ 228 million), representing a 3.3% market share (+3.7%). BlueFocus has seen a substantial increase in business billing, soaring from RMB 10.3 billion to RMB 15.3 billion (US$ 211 million) (+47.9%), earning a 3.1% market share and taking the third spot.

Zhewen’s business billing has fallen to RMB 10.8 billion (US$ 149 million) (-26.6%), but it has managed to maintain its market share, ranking it fourth. Hylink continues to witness a decrease in billing  (-34.6%), while Three’s Media’s billing has experienced a minor reduction (-4.5%).