China’s total advertising expenditure in 2010 rose 13% from a year ago, according to the latest figures released by CTR Market Research. The growth rate meets the forecasted figure released by CTR in the first half of year. Although the increase of the consumer price inflation may post pressure on the country’s overall economic development in 2011, CTR is cautiously optimistic to forecast that 2011 China’s advertising market will continue to outpace the GDP growth at the rate of 15%.
Ad Spending - Media
Upon the promulgation of the regulation #61 of SARFT (State Administration of Radio, Film and Television), traditional media market has witnessed the "diversion" of advertising placement. TV advertising business has entered a reformation era. Its growth rate of 11% lagged behind that of all media for the first time, and its market share fell to 76%. However, thanks to the further optimization of advertising resources, TV advertising revenue has seen value-driven growth. Scarce resources are further sought after. Strong satellite TV stations see the enhanced advertising operational capacity.
Radio media saw the largest growth in advertising among all media throughout the year, up 33% on a year-on-year basis. This not only benefited from the policy, but also from the expansion of resources. A growth of 19% in resources established radio as the media form with the greatest expansion of resources among all media.
Similarly, in 2010 resources in print media including newspapers and magazines also expanded by 11% and 6% respectively on a year-on-year basis, while the revenue growth rate of newspapers and magazines reached the same level of 19%.
Influenced by the comprehensive urban environment protection measures adopted across the country, resource volume of outdoor media significantly decreased in many cities. Echoing with the current trend of urban landscape environment transformation, new style, beautiful, high-end outdoor media has gained popularity so that the overall income from advertisement publication still increased by 16% on a year-on-year basis.
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Ad Spending - Industry
Eight major industries have made important contributions to the growth in the advertising industry, of which the top three sectors are toiletries (3%), automobiles (2%) and beverages (1.9%). Automobiles industry became a sector with the fastest advertising growth for the first time, with a growth of 44%. Leisure (22%), campaign (23%) also saw rapid growth, which to some extent revealed the vital roles entertainment played on the advertising market in 2010. Health food industry, which had held the spotlight in previous years, saw significant decrease in advertising placement. This dragged the advertisement placement for the foodstuff industry so much that it recorded a negative growth over the years (down by 0.5%) , which makes the foodstuff industry rank among the top five industries with the largest decline in advertising placement for the first time. From the perspective of industries and media, business and service industries has replaced the real estate industry to become the major source of outdoor advertisements; automobiles industry became more dependent on advertising placement on radio media; advertising placement on magazines from the international luxury increased; leading players of household appliance retail, decoration material retail significantly increased their advertising placement on newspapers.
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Ad Spending – Advertiser
L'Oreal replaced Unilever to become the second largest advertiser, and its multiple product lines have penetrated the domestic consumer market in the field of daily chemicals. In terms of media placement, L'Oreal launched fierce competition with the two traditional daily chemicals giants. In 2010, Wahaha Group, which went all out in fruit juice, tea drinks, milk drinks and other beverages, was crowned as the largest domestic advertiser in terms of advertising placement in replacement of Sixth Pharm Factory affiliated to Harbin Pharmaceutical Group.
Since the implementation of the policy of "Home Appliances Going to the Countryside", advertising placement by domestic home appliance enterprises, nationwide home appliance chain stores and other relevant enterprises further increased with their sales channels expanding to the rural areas. Suning, Gome and other companies not only maintained their advertising exposure on the newspaper media, but also ranked among top 20 advertisers in terms of outdoor advertisement placement for the first time. Midea, a local home appliance leader, saw significantly higher ranking in advertisement placement on various satellite TV stations, and became the only representative of home appliance industry among the top 20 brands with the greatest input in advertisement placement on a yearly basis.
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1. Figures are in billions of US$ based on rate card without considering any kind of discount and free advertisement
2. Measured media in China covers TV, newspaper, magazine, radio, outdoor (including subway)
3. TV monitored period: 17:00-24:00
4. *Exchange rate: 1 US$ =6.58 RMB dated on Jan. 28, 2011