Last year, China's advertising industry continued to grow from strength to strength. Nielsen Media Research statistics indicate in 2004, the advertising expenditure of Mainland China (based on the range of TV and Print media monitored by Nielsen Media Research) soared to RMB 261,4 billion Yuan, this is an increase of 32% over 2003, of which the TV advertising accounted for 76%.
The top ranking advertising expenditure industry remains unchanged, the amount of advertising spent on the pharmaceutical sector still ranked first, with an expenditure of RMB 52.4 billion Yuan and a stable increase on last year. With RMB 50.6 billion Yuan, the cosmetics/toiletries industry followed in a close second. In third position, the retail and service industry, spend RMB 38.8 billion Yuan. Also ranked amongst the top ten were the mechanically-driven cars, real estate, food and entertainment and leisure industries.
Although the pharmaceutical sector was questioned about its high profits in 2004 by par value drugstores, the industry as a whole did not cut short its marketing costs or reduce its advertising expenditure. It should be noted however, the adspend of OTC medicine increased by 44% on last year which was significantly higher than other pharmaceutical categories. On the other hand, brand competition reached saturation point in the vitamin/health supplements market. This can be attributed to the SARS epidemic in 2003 when advertising increased and has since experienced steady growth.
In 2004, Procter & Gamble Ltd. (P&G) invested heavily in advertising in order to fiercely to compete with rival brands. The aim was to snatch up the domestic toiletries and household cleaners market (this was a focal point in the media with eye-catching campaigns created). P&G successfully achieved their goal, over turning domestic brands which usually ranked amongst the top ten spenders in China. P&G exclusively occupied four out of the top ten positions in 2004. OLAY was ranked first; Rejoice ranked third; Crest ranked fourth and Head & Shoulders ranked eighth. Amongst the four, Oil Of Olay, a matured brand, was being marketed heavily with its new brand-positioning. The advertising expenditure of OLAY in 2004 increased two-fold on 2003 and intensive advertising campaigns were designed to enhance Oil Of OLAY¨s identity in the hearts of Chinese consumers. This also helped to facilitate the development of other P&G brands, further consolidating its lead in this product sector.