Why China's Top Broadcaster No Longer Brags About its TV Upfront Haul

For the First Time, TV Will Account For Less Than Half of China's Ad Spending This Year

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A scene from the CCTV upfront (that's someone dressed as a Chinese tea brand)
A scene from the CCTV upfront (that's someone dressed as a Chinese tea brand) Credit: CCTV
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It was a tradition of China's ad world: At the end of state broadcasting behemoth CCTV's annual auction for ad airtime, officials announced a total sales figure, a number seen as a gauge of China's economic success. Every time, the numbers grew, by as much as 18.5% year-on-year. In 2012, the one-day event raked in a record $2.5 billion.

The auction for 2015 prime-time airtime took place Tuesday, but for a second year in a row, CCTV released no triumphant final sales tally. (The broadcaster said it was more than last year, but that didn't help, since that figure wasn't released either.)

So what's the takeaway? Part of the story is that CCTV has been pre-selling ahead of the auction, as it explained in a news release.

But CCTV, a 45-channel giant known for traditional (and often unexciting) lineups of news, movies, documentaries and variety programs, faces more competition from the internet and provincial satellite channels. And it probably has less to trumpet now.

"I would say that in all likelihood -- and this is the industry expectation -- the numbers are no longer being announced because they're not as high as that of previous years," Herman Chik, Havas Media China Operation Director, wrote in an email. "Advertisers are beginning to balk at putting that high of an investment into CCTV."

But China's provincial satellite channels, with more colorful content, are gaining ground. Powerful local internet companies, including Baidu search engine and Alibaba e-commerce platforms, are luring more advertisers away from CCTV and TV in general. People are watching more movies and TV shows on online streaming sites, and ad money is following them. China Central Television, or CCTV, is still a giant: This year it was No. 23 on ZenithOptimedia's list of top global media owners by revenue, ahead of Facebook.

A GroupM forecast released in September said TV would account for less than half of ad expenditures in China this year for the first time – 46.8%, compared to 62.8% five years ago. It also forecast 2014 ad expenditure growth of 35% for online and 12% for provincial satellite TV channels.

As the government targets 7.5% economic growth for this year, overall ad spending is expected to rise 9.8% in 2014, according to the GroupM forecast.

But for CCTV the 2014 prediction is for growth of just 1% -- though GroupM noted that "CCTV has tried to make its entertainment programs more 'fashionable'" and is slowly attracting more young viewers.

CCTV also apparently tried to keep its auction more low-key this year, after anti-corruption investigations have swept up several of its high-profile figures, including a news anchor and the director of the financial channel.

The official China Daily noted that "for the first time, the auction doors were closed to the media this year, transforming the event from a media sensation into a guessing game for outsiders."