By Lucy Hornby
BEIJING Nov 8 Growth in advertising sales by
China's state television has softened to the slowest in at least
six years, a sign of corporate caution and an indication that
the pace of economic growth could slow further too.
China Central Television's (CCTV) annual advertising auction
doubles 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.
CCTV's total ad sales for 2012 rose by 12.5 percent to a
record high of 14.26 billion yuan ($2.245 billion) in the
auction held Tuesday. By contrast, growth ranged from 15 percent
to 18.5 percent in each of the past five years.
"We definitely see a more rational GDP growth this year and
heading into next year as well," said Wei Zhou, chief financial
officer for Charm Communications , the agency
representing about a third of the 100 companies bidding at
China's GDP growth has already slowed, to 9.1 percent
year-on-year in the third quarter of 2011, from 11.9 percent in
the first quarter of last year.
Still, as much of the rest of the world copes with waves of
debt crises, the rose-festooned CCTV auction hall buzzed with
advertisers trying to reach deeper into China's hinterland to
Foreign brands like Procter & 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, while regional manufacturers yearn for the sheen of a
This year, Bank of China battled it out with a
Chinese meat producer for the coveted 10-second spot that comes
just after the evening news.
It bid 76 million yuan for the right to air in that spot in
January and February, the months that include the Lunar New Year
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 officialdom.
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 levels the playing field to some degree for CCTV, which
is kept on a tighter leash and must air "harmonious"