Market Overview: Slowing Growth and Divergent Outlook

China’s digital marketing landscape is experiencing its most significant slowdown in five years, with overall marketing expenditure projected to grow by just 8% in 2025—a three-percentage-point decline from the previous year. Despite continued growth, market sentiment remains cautious, with 54% of advertisers expressing pessimism and only 22% anticipating budget increases.

This slowdown stems primarily from three factors: broader economic deceleration, intensified industry competition (which jumped from sixth to third in importance rankings), and persistent challenges in quantifying marketing effectiveness. Interestingly, emerging brands display a contradictory sentiment—while pessimistic about the industry overall, they maintain optimistic projections for their own marketing investments, suggesting potential advantages in differentiated strategies.

Investment Priorities: Mobile and Social Media Dominate

Marketing budgets continue to shift decidedly toward mobile platforms, with 55% of advertisers increasing their mobile internet investments. Outdoor advertising follows at 26%, while traditional media and smart device allocations continue to shrink. Within digital channels, three areas command the most attention: influencer platforms (87%), short-form video (67%), and in-platform search (52%).

Social media marketing, though growing at its slowest five-year rate of 10%, remains fundamental to digital strategies. Key growth areas include KOL (Key Opinion Leader) content marketing (74%), brand-owned livestreaming (47%), and everyday consumer marketing (37%). In short-video specifically, influencer content (65%), livestreaming (46%), and algorithmic promotion (37%) represent advertisers’ primary focus areas.

The Brand-Performance Disconnect

A striking disconnect has emerged between short-term sales objectives and long-term brand building. While 88% of advertisers prioritize sales growth as their core objective, 56% recognize that sustainable growth opportunities lie in brand development—creating a significant strategic tension.

To address this, 73% of companies are aligning marketing KPIs with business growth metrics, 60% are strengthening cross-departmental collaboration, and 52% are advancing data-driven marketing systems. Budget allocations reflect this tension, with 53% of advertisers reducing brand investments in favor of performance-driven advertising, while simultaneously 70% prioritize high-ROI media channels.

Technology Drivers: AI’s Untapped Potential

Artificial intelligence adoption is gaining momentum, with 54% of advertisers using AI tools weekly. However, only 28% currently apply these tools to marketing functions. Looking ahead, 41% plan to increase AI investments, primarily targeting intelligent ad placement, consumer insights, and content distribution. Generative AI and conversational AI are emerging as transformative technologies, revolutionizing creative efficiency and customer interaction models.

Data-driven precision marketing continues to evolve, with companies leveraging AI to optimize campaign effectiveness while incorporating knowledge graphs, semantic search, and other technologies to enhance content visibility and consumer intent analysis.

Future Opportunities and Recommendations

Balance Brand Building and Performance Marketing

Despite short-term sales pressures, brands should maintain long-term brand equity through content innovation (such as contextual short videos) and direct consumer engagement (like brand-owned livestreaming).

Embrace AI and Data-Driven Approaches

Accelerate AI implementation across advertising, audience profiling, and creative production to boost marketing efficiency and precision.

Deepen Localization and Contextual Marketing

Adapt product structures to regional consumption patterns (as exemplified by Haier’s successful digital marketing in Malaysia) and optimize connections between offline experiences and online discovery platforms.

Conclusion

China’s digital marketing landscape in 2025 is characterized by slower growth but abundant opportunities for strategic innovation. Forward-thinking brands will focus on capturing mobile and short-video traffic while leveraging AI to optimize campaign efficiency and exploring differentiated competitive approaches that balance immediate performance with long-term brand building.