The U.S. might be the world’s biggest market for mobile advertising, but China is its most expensive—and getting more so. And that is a major drag for startups, as it drives up the cost of drawing new users, Chinese tech executives say.
The average cost to buy ad space on Android phones through mobile marketplace InMobi rose 48% in China between the first and third quarters of this year, according to data from InMobi. Ad rates on iOS, where Apple’s ad-targeting clampdown has made advertising less effective, rose 30%. The increases reflect the burgeoning amount of venture capital going into startups, which is lifting marketing spending as startups look for customers, as well as the acceleration of online shopping caused by Covid-19. More merchants and brands are competing to reach consumers.