Chinese State TV Giant Sells $1.5B In Annual Ad Auction

But China's Luxury Liquor Brands, Usually Big Spenders, Keep a Low Profile Amid Government Crackdown on Extravagance

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China's state television giant CCTV sold $1.5 billion at its annual live auction for prime-time commercial airtime, with carmakers and home appliance companies stepping up their buying as China tries to jolt consumption.

Since CCTV is a powerful medium for reaching consumers nationwide, the one-day marathon sale is scrutinized to measure China's economic health. But Monday's 10-hour auction for 2014 airtime was tough to read, since many brands bid privately this time ahead of live bidding in Beijing.

Breaking with tradition, CCTV did not release a total sales figure from the auction. GroupM tallied about $1.5 billion in live bidding sales, which it estimated was up between 8% and 10% in 2014, if compared on a like-to-like basis with 2013.

Though brands pledged a record $2.5 billion at the sale a year ago, the 2013 and 2014 numbers aren't directly comparable because more buys were done privately this time.

"This is not a significant shakeup and does not reflect the demand for CCTV airtime," said Andrew Carter, president of GroupM Trading for China.

For advertisers, CCTV looks like "a real safe bet for next year --- I think it will perform strongly next year due to the new regulations on provincial satellite channels," he added.

Popular satellite shows like "The Voice of China" and "Chinese Idol" have lured some viewers from CCTV, but the government recently restricted the number of singing competitions and forced them to tone down their glitziness.

One notable absence in live bidding was China's upscale brands of baijiu, a fiery alcohol that is downed at banquets and is a popular luxury gift for officials.

Chinese liquor brands have been top buyers in recent years but stayed out of the spotlight Monday and bid privately, though their reasoning for that was not clear. Many have taken a hit as President Xi Jinping cracks down on extravagance and corruption among officials.

The largest live bidder was e-commerce giant Tmall, part of Alibaba Group, buying $23 million in ads around coverage of the 2014 World Cup, according to Charm Communications, which represents many bidders.

Alibaba is huge already--it sold $5.7 billion in goods in 24 hours on an e-commerce holiday Nov. 11. In a country where internet penetration is just 44%, the CCTV buy helps it reach consumers in less developed cities.

Other sectors that registered growth were food and beverage brands, home appliance companies and automakers. Shanghai GM and Chrysler were among first-time bidders, CCTV said. Many foreign brands have typically preferred less expensive digital or satellite buys.

Ad spending by travel and healthcare companies also increased, as the government gave them "more confidence to spend money to stimulate sales," noted Richard Wang, managing director of Neo@Ogilvy, North Region China.

China's growth has slowed to 7.8% after years of 10% annual expansion. Leaders are trying to move from an economy boosted by big infrastructure projects to one more driven by consumption of goods and services like healthcare and tourism.

The auction is usually held earlier in November but the date was pushed back to Nov. 18 to fall after a Communist Party meeting where leaders pledged to boost consumer spending and give market competition a greater role.

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