BEIJING Nov 8 Excited bidders pushed
advertising rates on China's state television to new highs on
Tuesday as domestic firms crowded out foreign brands in the
battle to reach ever more Chinese consumers.
China Central Television's annual advertising auction is
broadly seen as a barometer for the Chinese economy, with ad
spending rising by about one and a half times GDP growth in each
of the past several years.
This year, as much of the rest of the world copes with
slowing growth, the CCTV auction hall was abuzz with advertisers
trying to reach deeper into China's hinterland to grow sales.
Entry tickets to the rose-festooned hall were in short supply.
"From an advertiser's perspective we are seeing a lot of
confidence compared to 2008," said Wei Zhou, chief financial
officer for Charm Communications , the agency
representing about a third of the 100 companies bidding at
Foreign brands like Proctor & Gamble , which held
pride of place as CCTV's biggest buyer from 2003-2008 ,
have given way to Chinese firms carving out a domestic
Bidders were mindful of the lessons of the November 2008
auction. Then, international firms that cut spending due to the
global financial crisis ended up losing market share once the
Chinese economy recovered, Zhou said.
In an increasingly competitive market, big Chinese banks are
moving from corporate lending to selling wealth management
products to picky customers, while regional firms yearn for the
sheen of a national brand.
This year, Bank of China battled it out with a
Chinese meat producer for the coveted 10-second spot just after
the evening news. It bid 76 million yuan ($11.97 million) for
the right to air in that spot in January and February, the
months that cover Chinese Lunar New Year celebrations.
REACHING THE MASSES
Ad spending in China has increasingly flowed to more daring
provincial satellite channels, whose dating shows and talent
contests are wildly popular. Over the longer term, online
advertising is also eating away at TV budgets.
But CCTV could get a boost as foreign and domestic brands,
which originally only focused on the wealthiest cities, reach
out to those consumers in the hinterland who still tune into
CCTV's period dramas.
"One of the things driving CCTV is that as clients move to
50 cities rather than 15, no regional channel can reach them the
way CCTV can," said Seth Grossman, China managing director for
ad agency Carat.
State-owned CCTV also enjoys a little help from on high.
China's broadcast regulator last month limited satellite
channels from airing more than two hours of entertainment
programs during prime time. The directive against "excessive
entertainment" also forces them to air at least two hours of
news during evening hours.
That should help staunch the flow of ad money away from
CCTV, which is kept on a tighter leash and must air "harmonious"