Is China's economy starting to cool ever so slightly?
National government-owned broadcaster China Central Television raised a record $2.25 billion at its annual advertising auction in Beijing this week, representing 12% growth over last year. That seems high compared to most of the rest of the world, barely eking out low single-digit ad spend growth, but for China that 's down from annual increases ranging from 15% to 18.5% during the past five years.
The CCTV auction of TV time for the coming year is seen as a benchmark for not only China's advertising industry, but the country's economy as a whole.
"We definitely see a more rational GDP growth this year and heading into next year as well," Wei Zhou, chief financial officer for ad agency Charm Communications, told reporters. Charm represented about one-third of the companies at the day-long auction where media buyers raise paddles to make bids.
In another sign of change, Procter & Gamble, which used to be considered the king of the auction and its No. 1 spender, ranked only No. 43, spending $16.4 million. (Bidding separately from P&G China, P&G Guangzhou was the 69th largest bidder at $9.6 million). Multinational marketers had a more subdued presence than usual at this year's auction, reflecting the growing strength of domestic brands as well as a shift from TV advertising to other formats such as digital and out-of -home.
In keeping with Chinese superstition, the auction kicked off at 8:18 a.m. on Nov. 8, because the Chinese word for eight (ba) sounds like the word for prosperity (fa). The event ran about 14 hours this year.
Domestic companies were by far the biggest spenders, led by Kweichow Moutai, a liquor maker that paid $78.5 million, mostly for 20-second spots just before the evening news, according to figures from Charm. Moutai is a potent firewater that 's downed from teacups at banquets and given as gifts during holidays.
The China Life insurance company was second with $56.3 million in bids, followed by spirits maker Xifeng with $50.6 million. Alcohol brands were the largest category of advertisers, comprising 27% of the advertising sold.
FAW-Volkswagen, a joint venture carmaker, was the top bidder with international ties, at No. 7 overall with $45.6 million in bids, according to Charm.
Ad rates have not yet been released.
Marketers have also been flocking to provincial satellite broadcasters, which have national reach and feature programs such as dating and variety shows that are hugely popular among younger viewers. A recent government missive banning "overly entertaining" programs and vulgar content phased out a portion of the shows, diminishing supply even as demand builds for the crowd-pleasing fare.
Some provincial broadcasters hold their own auctions, following CCTV's model. Anhui Satellite TV brought in $72.7 million in bids recently, while Zhejiang raised $145.6 million, according to figures from UM. Jiangsu Satellite TV received $346 million, including $300 million for spots on its popular dating show "If You Are the One."