Ad spending in the mainland grew 21% last year

And other news in Greater China

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Ad spending in the mainland grew 21% last year
HONG KONG -- Estimated ad spending in above-the-line media grew 15% in Asia/Pacific year-on-year through the end of March 2006, according to Nielsen Media Research, reaching a record $71 billion, with mainland China showing the strongest growth rate in the region. Advertising expenditure in the top three categories -- pharmaceutical, toiletries and retail and service -- accounted for over half of the total growth in all fields in China.

“With an estimated $41 billion spent across TV, newspapers and magazines, China recorded an increase of 21% in the 12 months to March 2006, with organic growth and increased media coverage both contributing to this result,” said Richard Basil-Jones, Nielsen’s managing director for Asia/Pacific in Hong Kong.

“International credit cards, represented by Visa and MasterCard, have been one of the highlights in the Chinese advertising market since the latter half of 2005,” added Mr. Basil-Jones. “In 2006, Visa, as a major sponsor of the Winter Olympics, advertised heavily during January and February. In March, JCB, a relative newcomer to the credit-card market, followed with its own ad campaign focusing on economically developed regions such as Beijing, Shanghai and Guangdong, investing heavily in TV advertising. Its advertising expenditure in March 2006 was 35 times as much as its total expenditure in 2005.”

Another category that experienced a significant boost in ad spending was communications. An average performer in 2005, growth occurred in the first quarter through an increase in activity by key mobile phone players, spending big on campaigns prior and during the Chinese New Year.

Cars and their related products, which experienced a decrease in advertising spending last year, gradually returned to growth in early 2006. With the relaxation of regulations in January 2006 controlling the use of automobiles under 1,000cc while also adding tax to automobiles above 1,500cc, this sector is expected to see significant growth in advertising investment throughout 2006. With the rising price of fuel, the promotion of more fuel-efficient small cars may also prove more popular and drive further growth in this category.

Consumer-goods manufacturers have tapped into the traditional beliefs of the zodiac calendar that the Year of the Dog (2006) is a lucky year to get married and the Year of the Pig (2007) is a good time to have children. The number of advertisements for jewelry, represented by diamonds, baby products including diapers and food, increased noticeably in the first quarter of this year. Hair-care marketers in Asia/Pacific, led by Procter & Gamble, spent $3 billion overall on advertising in the past year, with China comprising over two thirds of total spend in the category.

McDonald's signs another partnership to expand drive-thrus
BEIJING--McDonald’s Corp. has partnered with the Dalian Wanda Group, one of China’s largest real estate enterprises, to develop new restaurants and drive-thru outlets in the group’s shopping malls and business centers around the mainland. The Wanda Group has properties in Dalian, Chengdu, Xi'an, Suzhou, Hangzhou, and Chongqing. The deal is the latest sign that the U.S. fast-food chain is determined to step up its presence in China, where global rival KFC, part of Yum Brands, has nearly twice as many sites. In 2005, McDonald's opened its first drive-thru restaurant in China in Guangdong Province. Two additional drive-thrus have opened this year, in Shanghai and Shunde, Guangdong.

Auto sales rebound in China with 47% growth in the first half of 2006
BEIJING--Car sales in China rose almost 47% year-on-year during the first half of 2006, according to the China Association of Automobile Manufacturers. The country’s top 10 automakers sold more than 1.2 million cars. The country’s top-selling domestic passenger car manufacturer remained Shanghai GM, the flagship joint venture between General Motors and Shanghai Automotive Industry Corp. Group (SAIC), which experienced first-half sales growth of 49.1%. General Motors and its joint ventures in mainland China sold 453,832 vehicles -- Buick, Chevrolet and Cadillac cars -- in the first six months of 2006.

“GM and our China operations benefited from a stronger-than-expected domestic vehicle market in the first half,” said Kevin Wale, president-managing director of the GM China Group in Shanghai. “We expect vehicle sales in China to remain steady through the end of 2006, and top last year's record.”

The country’s second-largest automaker, Volkswagen Group China, meanwhile, saw sales grow 30.2% in the first half, compared to the same period last year. VW and its joint ventures Shanghai Volkswagen and FAW-Volkswagen sold 345,375 vehicles in mainland China, including imports. The top two were followed by Chery, Beijing Hyundai, FAW Toyota, Tianjin-FAW Xiali, Geely, Guangzhou Honda and Dongfeng Peugeot Citroen.

GroupM launches Meritus division in China
BEIJING--Group M has launched its Meritus Analytics arm in China. The data analytics firm, a joint venture between WPP Group and Covansys Corp., helps companies sift through data in order to develop key consumer and product insights, capitalize business opportunities and maximum return on investment. “China’s market potential for the future is outstanding, and the progression of many banks, airlines, telecommunications and insurance companies towards international standards are inevitable,” said V. Balasbramanium, the company’s managing partner based in Bangalore.

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