HONG KONG (AdAgeChina.com) -- Advertising spending in China rose 17% to 381 billion RMB ($50 billion) in the first three quarters of 2008, compared to the same period last year, according to Nielsen Co. But that doesn't mean China's ad market is booming.
The boost is largely attributed to increased marketing expenditure by sponsors of the 2008 Olympic Games in Beijing in August. With over sixty sponsors, commercial activity surrounding the event was higher than usual. However, total ad spend in China during August, the month the Olympic Games took place, rose only 7% over the same period last year, less than the industry expected. And worse, spending fell 18% in September 2008, compared to the same month last year.
While sponsors and their competitors, particularly sportswear companies, ramped up their advertising during August to maximize their exposure during the games, the bulk of China's advertisers took a serious ad break for the month, said Sydney-based Richard Basil-Jones, Nielsen's managing director-media in Asia/Pacific.
Most non-sponsors "feared being out-spent and upstaged."
As a result, spending in August was similar to that of August 2007, and not much higher than in May, when a major earthquake hit Sichuan province and advertising was suspended nationwide during a three-day mourning period.
Advertisers in China spent 40.3 billion RMB ($5.3 billion) in August 2008, compared to 38.6 billion RMB ($5.1 billion) in May 2008.
"This is quite unprecedented, based on our monitoring of advertising behavior and spending for previous Olympic Games. Rather than attempt to battle it out with the sponsors, other players opted simply to 'sit out' the month of August," said Mr. Basil-Jones.
For sponsors, "this would have cleared the airwaves of a lot of noise and may well have given them even greater cut-through."
With the 2012 Olympic Games in London still four years away, "time will tell whether this was a situation unique to China, or whether in the future, other non-sponsors will chose to sit on the sidelines, leaving the games open and clear for sponsors to enjoy maximum cut through in an unusually uncluttered advertising environment," he said.
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