Health TV advertising key to growth
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The annual auction of prime-time advertising slots at China Central Television (CCTV) seems to be a weather vane for the country's economic situation.
Thousands of entrepreneurs and advertisers swarmed to Beijing to witness the broadcast giant's launch of a marketing campaign last Monday which will culminate on an auction day on Nov 8.
He Haiming, deputy director of the Advertising Operation and Management Center of CCTV, said: "Most prime-time advertising slots for 2011 will go through a bidding and auction process while some of them will be purchased by way of pre-sale. During the advertising slot bidding for 2011, we saw that bidders involved in the auto and tourism industries became stars."
In the past, most of CCTV's advertising clients involved in the tourism sector were operators of tourist attractions. Now, an increasing number of provinces and municipalities have invested in advertising with the national broadcaster, among them Shandong, Henan, Hebei and Hubei, in an effort to promote what they have got to offer.
He added that bidders from sectors including food manufacturing, finance, chemical, alcohol, clothing and medical apparatus and instruments and new energy would be very active in this year's auction.
With regard to the food manufacturing industry, with the emergence of multi-billion yuan Chinese enterprises including Wahaha, Yili and Mengniu, competition has become unprecedentedly fierce. At the same time, the sense of branding has also very much intensified, according to the national broadcaster.
The recovery of the Chinese dairy industry after the melamine scandal has also inspired related enterprises to rebuild their status and brands as well as attempt to grab market share through advertisements.
In the last CCTV annual auction, Chinese milk giant Mengniu shelled out 204 million yuan for the most expensive slot, which was during a CCTV special drama in the first half of 2010.
After the initial public offering of Agricultural Bank of China (ABC), many Chinese commercial banks, for example, China Everbright Bank, decided to promote their brands as well as their corporate status. They are now expected to increase advertisement expenditure.
Last year, Sichuan-based alcohol maker Langjiu Group spent 33.3 million yuan for the exclusive titling right for the top scorer list of the 2010 FIFA World Cup.
The broadcast giant said that consumers have begun attaching more importance to brands when they are selecting alcohol products. The whole industry is experiencing a round of integration while major players have been gearing up to bolster brands.
CCTV disclosed that the reference price for a commercial slot during the 2011 Chinese New Year countdown during the CCTV Spring Festival Gala, one of the biggest occasions on New Year's Eve for many Chinese people, is about 57.2 million yuan.
Last year, Home appliance producer Midea Group paid 52 million yuan for the slot.
It said that the year-round exclusive sponsorship of Morning News and News 30 Minutes, two of the most viewed CCTV current affairs programs, would cost 49.7 million yuan and 51.7 million yuan respectively in 2011.
Last November, CCTV launched auctions of its prime-time advertisements in 2010, raising bids totaling 10.97 billion yuan in about 13 hours. It was a 16-year record, with an increase of 18.5 percent compared with the 9.26 billion yuan raised in 2009.
Household products and construction materials were the fastest-growing sectors in last year's auction, with the total value of bids growing 200 percent year-on-year. Revenue from advertising household electrical appliances grew by 80 percent and from auto industry commercials by 70 percent .
The economic environment aside, Li Guangdou, an advertisement expert, said it was easy for advertisements to psychologically influence consumers' purchasing decisions of household products. However, TV advertising was not effective in every sector, he said, citing the real estate industry as one in which it didn't always work.
Zha Wei, an industry insider and vice-president of Filmore Media, said: "As a national television network, CCTV has advantages in certain genres, for example coverage and credibility or authority, compared with local or provincial stations."
Zha added that when CCTV revamped its flagship news programs last June, it gained more popularity.
Statistics from CSM Media Research showed about 1.22 billion people watched CCTV's programs in 2009.
After all-round improvement and innovation, the audience share of CCTV's news channel increased by 65 percent in the first half of 2010, according to the broadcaster.
In addition, the advertising revenue of CCTV went up by 40 percent year-on-year, it said, adding that it was thanks to the optimistic attitude of Chinese entrepreneurs towards China's economy as well as their decision to get involved in the new-look TV station.
Luo Ming, deputy chief of CCTV, said: "CCTV will continue rebranding news coverage and also innovating entertaining programs in a bid to represent a new face for CCTV to people all around the world."
