Q1 2025 China Ad Market Report: Outdoor Advertising Enters Strategic Growth Phase

Macroeconomic Resilience Lays the Foundation

In Q1 2025, China’s national economy demonstrated strong momentum toward high-quality development, underpinned by continued macroeconomic stimulus and structural transformation. With GDP reaching 31.8758 trillion yuan, a 5.4% year-on-year increase. Bolstered by policy combinations and increasing domestic demand, sectors such as consumer goods, services, and advertising all benefited from this favourable environment.

Outdoor Advertising Market: Enter a New Growth Phase

Overall Growth and Momentum

The outdoor advertising industry in China maintained a robust upward trajectory in the first quarter of 2025. Total spend reached ¥57.352 billion, up 6% year-on-year. While this marked the fourth consecutive year of Q1 growth, the pace of increase narrowed compared to the 15% rise in Q1 2024. After adjusting for changes in coverage and rate cards, the real growth was 4%, with net value dipping by 1%, suggesting that while confidence remains, advertisers are cautious in scaling up spending aggressively.

Brand Participation Hits a New High

A significant vote of confidence came from brand participation. The number of brands investing in outdoor ads rose to 13,128, an increase of 327 brands from the previous year, continuing a two-year upward trend. This surge was partly fuelled by seasonal festivals such as Chinese New Year, New Year's Day, and International Women's Day, which traditionally drive high consumer engagement and marketing activity.

Primary Markets as Anchors of Growth

Despite economic headwinds and cautious budgeting, Tier 1 cities continued to be the focal point for outdoor advertising. In Q1 2025, 4,486 brands placed ads in Tier 1 markets—an increase of 288 over the previous year. These regions accounted for a 10% rise in ad spend and saw their market share climb by two percentage points. By contrast, Tier 2 and 3 markets underperformed, with stagnating brand volume and declining average spend per brand.

Monthly spend trends mirrored the cyclical nature of media investment: a peak in January, a drop in February, and a mild recovery in March. Notably, March showed signs of accelerated recovery, particularly as video media rebounded from earlier underperformance.

Key Industry Movements and Shifting Sector Priorities

In Q1 2025, the top ten sectors accounted for a hefty 73% of all outdoor ad spend—a sign of increasing industry concentration. Services, cosmetics, and food led the charge. The services sector, regaining its top position, expanded its share alongside websites and cosmetics.

Conversely, beverages and alcohol—once dominant players—saw declines. The latter’s pullback was led by reduced investment from major baijiu brands, contributing to a shrinking market share.

Interestingly, the cosmetics, digital platforms, computer peripherals, and pharmaceuticals sectors demonstrated higher single-brand value contributions, hinting at better budget consolidation and impact per brand.

Geographic Landscape: Big Cities, Big Impact

The geographic structure of outdoor advertising remains remarkably stable. The top 10 cities have maintained their position over the past three years, with the top 7 showing zero fluctuation. Guangzhou and Shenzhen were particularly favoured by advertisers, showing steady increases in share, followed by improvements in Shanghai, Beijing, Chongqing, and Xi’an. On the other hand, cities like Chengdu, Hangzhou, Nanjing, and Wuhan saw marginal declines, reflecting shifting urban media strategies.

Video Ads Hit ¥38B—Growth Eases, Momentum Shifts

Video-based outdoor advertising grew to ¥38.398 billion in Q1 2025, a 7% year-on-year increase. However, this marked a notable slowdown compared to the 36% surge observed in Q1 2024. After adjusting for rate changes, actual growth came to 5.4%, while net value slipped by 1.9%.

Despite the slower momentum, brand volume continued to rise. The format attracted 3,009 brands—29 more than last year—setting a new Q1 record. Yet, this was far lower than the 650-brand jump seen in 2024, highlighting weaker growth inertia. This tapering reflects macroeconomic uncertainty, tighter marketing budgets, and the urgency for media owners to attract new clients.

Leading formats included LCD screens in office and residential buildings, followed by electronic billboards and subway screens. Meanwhile, high-speed rail video ads declined due to reduced budgets from anchor brands.

Sector Outlook: What’s Driving Q2 2025

Looking ahead, several industries are poised to drive the next wave of outdoor media growth:

• Leisure & Tourism: High travel volumes during Chinese New Year and the May Day holiday suggest a strong H1 for tourism-linked ads.

• Health & Pharmaceuticals: Ageing demographics and a wellness boom are sustaining strong interest in supplements and OTC drugs.

• Cosmetics: Domestic brands like Judydoll and Chando continue their rise, driven by patriotic consumer sentiment and aggressive outdoor campaigns.

• Digital Platforms: With 618 e-commerce festival preparations underway, websites and digital retail platforms are expected to ramp up spend.

Policy Tailwinds and Market Prospects

China’s government is doubling down on pro-consumption strategies in Q2, including wider subsidies and expanded funding initiatives. This is expected to amplify demand across sectors. As holiday travel surges and e-commerce festivals like 618 heat up, the outdoor advertising sector stands to gain significant momentum.

In Tier 1 cities, where commercial infrastructure and purchasing power are strongest, outdoor media remains a key battlefield. Fast-moving consumer goods, cosmetics, and health products will likely lead the charge, while platforms focus on conversion during critical shopping windows.

Final Thoughts

China’s outdoor ad market in Q1 2025 shows steady growth and strategic maturity. Traditional and video formats are balancing out, Tier 1 cities remain key, and campaigns are increasingly data- and season-driven. With policy tailwinds and peak seasons ahead, Q2 is set for further momentum.

Talk to our team, help you refine the brand’s outdoor strategy, focus on high-impact formats, and align with consumer rhythms to stay ahead.