BRIGHT SPOTS SHINE ON AD HORIZON

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While much of the world is rejoicing over the return of low single digit growth, there are a few hot spots around the globe where marketing and advertising are galloping along at an amazing clip.

China, for example, experienced an ad spending boom last year as expenditures soared 100%. And Vietnam, freed from a U.S. embargo this year, is by some estimates set to rocket 400% in ad spending.

In this section, AAI sets out to highlight a few of these emerging markets, their appeal and their drawbacks for advertisers. The four markets profiled-Colombia, India, China, and Vietnam-were selected after consulation with international advertising and marketing executives.

China

Advertising is in the midst of a golden period. Last year, the State Administration for Industry and Commerce said ad spending doubled to $1.5 billion, and in 1994, spending is expected to jump 40% to $2 billion.

After 15 years of economic reforms, a new middle class is emerging and fueling a demand for both foreign and domestic consumer goods.

With a population of 1.2 billion people-22% of the world's total-China has upwards of 60 million consumers who for the first time are spending their disposable income, according to Western business consultants. Increasingly, Chinese are turning to luxuries and convenience goods, including high-ticket items such as jewelry, videocassette players, air conditioners and modern furniture.

Last year, TV advertising replaced outdoor billboards and newspapers as the most popular medium for advertisers, accounting for about one-third of expenditures. Two years ago, it comprised less than one-quarter of total ad spending.

But Western advertising executives warn that China has its risks. Corruption is rife, as is a discrepancy in the rates charged to Chinese and foreign companies for ad time. Furthermore, resistance to foreign encroachment in advertising is worrying Chinese officials, particularly in the southern provinces near Hong Kong. India

While China's gross national product is expected to climb 9% in 1994, forecasters have India's moving up only 3.8%. So why the sudden beeline to the country?

The answer is its burgeoning population. India has 902 million people, one-third of whom fall into the category of middle- and upper-middle class. The opening of the economy, fueling more jobs, finds these consumers flush with money. "The purchasing power in this country is really phenomenal," said Dara Acidwalla, managing director of Raka Advertising & Marketing, Bombay.

Ad spending in 1993 stood at $730 million, up 8.3% from the previous year, and industry observers expect this year's figures to top out at $800 million, up 9.6%. Newcomers attracted to the market include Apple Computer, Shell Oil, AT&T, Coca-Cola, Procter & Gamble, Reckitt & Colman and Kimberly-Clark, drawn by liberalization policies that now allow foreign companies to increase minor stakes in Indian businesses to 100% ownership.

The media scene is hopping, with print still garnering about 65% of the total media budget. But satellite TV is on the rise and includes an array of choices such as TV Asia, Asianet, ATN, Sun TV, CNN, Jain TV and Star TV. Star TV alone reaches 7.3 million Indian homes.

The Indian government is working overtime to allow multinationals unimpeded access but some restrictions remain. Foreign newspapers, for example, are restricted, but after a court battle the first round went in favor of the foreign papers when the Delhi High Court dismissed fears of another bout of colonization as nonsense (AA, March 7).

Vietnam

Vietnam's 1993 ad spending (at $13 million to $15 million) will skyrocket to $70 million this year, according to David Bell, chairman of BSB Vinexad, a joint venture with the Vietnam Trade Fair & Advertising National Co. But that's just the beginning: Mr. Bell expects another 100% hike in 1995.

To accommodate advertisers, the government is adding a third nationwide commercial TV station this month to its two current channels in Hanoi and Ho Chi Minh City. "Its ad time will be 100% booked," predicts Mr. Bell. Print also remains tight with the government restricting print to 15% of magazine and newspaper space.

But the desirable print outlets find ways around the rules. Saigon Giai Phong (Saigon Liberation), the country's leading daily, consists of a broadsheet folded to make four pages with 15% of those pages taken up with ads. On Fridays, the paper is folded around another four to eight pages of nothing but ads-which the paper calls a supplement.

Ho Chi Minh City's commercial TV station is on the air from 6:30 p.m. to 11:00 p.m. and takes :20 and :30 spots priced from $200 to $400. Those rates are up 66% since January as demand soars. The Hanoi station airs from 6:45 p.m. to 10:30 p.m., accepting :30 and :60 spots ranging from $127 to $637.

The ads vary in quality from a state of the art "Choice of a new generation" commercial for Pepsi to a Lux shampoo spot with production values appearing at least 20 years old. Even the Pepsi ad looks grainy because every spot has to be transferred to VHS tape, the only format Vietnamese equipment can handle.

Recognizing the onslaught to come, the Ho Chi Minh City People's Committee-the city government-banned new billboards at the start of the year and has set up a committee to regulate them. Mr. Bell said the new regulations will undoubtedly limit the number and size of billboards.

Colombia

The Colombian economy is booming, so much so that the country is emerging from the shadows of its reputation as a drug capital to one of a hot new market. After a stellar 1993 in which the gross national product increased 5.2%, the country is expecting a similar growth rate this year. And industry observers peg ad revenue growth at 45% for 1994 as Colombia's economic expansion continues, boosting per capita income and spending.

TV is the most popular ad medium, expected to be up 30% in 1994. The market, however, is splintered among many program options including the three national channels (Cadena Uno, Canal A and Cadena Tres). The first two are the most popular, broadcasting a steady fare of soap operas, World Federation Wrestling and sports matches.

Cadena Tres devotes itself to more educational and cultural programming, and four regional networks-Tele Antioquia, Tele Pacifico, Tele Caribe and Tele Cafe-round out the broadcast viewing options. Cable brings another 11 stations to Colombian homes, including HBO Ole, and MTV Latino. Finally, many Colombians pay $1-$2 monthly to receive pirated TV signals from the U.S. decoded in Colombia.

Because of its high illiteracy rate, Colombia ranks 14th in the Spanish-speaking world in newspaper purchases. Only one newspaper is sold for every 20 people.

Advertising in Colombia, however, is highly regulated. A government industry commission, Conarp, serves as industry watchdog, outlawing many practices including comparative ads. Advertisers are also prohibited from running alcohol and tobacco spots before 10 p.m.

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