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Olympic Boost for Ad Industry
    2007-03-23 10:12:53     China Daily

China's advertising spending, having experienced strong growth in 2006, is expected to climb 20 percent this year and even higher in 2008, driven by next year's Olympics, according to a recent report.

The report, by CTR Market Research, a leading market information provider in China, said companies at home and abroad were adopting advertising strategies with a mix of traditional and new media.

CTR said China's advertising expenditure amounted to $36.9 billion last year, an annual growth of 18 percent and equal to that of the year before last.

The analysts forecast an increase this year. "China's advertising spending is expected to grow by 20 percent in 2007," said Tian Tao, vice-president of CTR.

"We're extremely optimistic about the domestic advertising market in the next two years leading up to the 2008 Beijing Olympics. And we expect the share of top-100 advertisers will contribute to double-digit growth."

The drinks, financial and banking, post and telecommunication, detergent and auto sectors are the top five in terms of advertising spending growth.

As a result of China opening up the banking industry in late 2006, advertising spending in the financial, investment and banking sectors grew rapidly, with the banking industry alone achieving growth of 36 percent compared with 2005.

The Agricultural Bank of China ranked No 1 in advertising spending, along with CITIC Bank. The two banks' advertising expenditure grew by 91 and 652 percent respectively year-on-year.

Increasing advertising expenditure has spread across traditional media such as TV, newspapers, magazines, outdoor media and radio.

Radio saw the highest growth rate of 24 percent, and brands such as Mengniu, Lenovo, China Construction Bank, Wahaha and China Minsheng Bank entered the Top 10 Radio Advertiser List for the first time in 2006.

TV still maintains its dominant position with a 76 percent market share and 18 percent growth in 2006. The growth of outdoor ads slowed to 9 percent from the previous year's 130 percent. Newspaper and magazine ads saw growth of 4 and 10 percent.

According to TNS Media Intelligence, China, together with the United Kingdom, is now the world's third advertising market after the United States and Japan, and it is the No 1 market in terms of growth of advertising expenditure. US advertising spending grew by 3.8 percent year-on-year, while Japan and the UK saw negative growth of -0.2 and -1.8 percent in 2006.

But CTR said there was still room for China's advertising market to develop, as the ratio of advertising spending to China's gross domestic product is 1.4 percent lower than that of the US at 3 percent.

CTR also expected the 2008 Beijing Olympics to propel advertising spending growth until 2009.

"The prediction is not unreasonable, and it is based on the good performance during the World Cup and the Doha Asian Games," said Tian.

According to the CTR report, 2006 World Cup advertising on the three appointed CCTV channels from June 10 to July 10 saw spending increase by 36 percent compared with the same period the previous year.

CCTV and provincial capital city TV channels outperformed average TV media in the growth of advertising spending.

"As the 2008 Beijing Olympics approaches, sport events have become more and more popular among advertisers," said Tian.

CTR also said advertisers would turn to a mix of traditional and new media to lure the attention of China's consumers.

"New and innovative advertising strategies leveraging various media will be an important new advertising trend in China in the years ahead," said Tian.

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