GroupM Lifts Media Spending Forecast for China

Media Expenditure Now Projected to Rise 5.8% -- Not 3.2%

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SHANGHAI ( -- GroupM has revised its forecast for media spending in China, lifting earlier June 2009 estimates for 2009 and 2010 to reflect the improved outlook for China's broader economy.

GroupM now expects 2009 ad spend in China to increase by 5.8% to RMB 254.5 billion ($37.3 billion), and by 9.8% to RMB 279.4 billion ($40.9 billion) in 2010, with internet spending leading the way. The figures update GroupM's last forecast of 3.2% growth in 2009, and 8.9% in 2010, issued in June 2009.

Economists, including those from the World Bank and Goldman Sachs, have recently raised their forecasts for Chinese GDP growth by about 1.5%, and expect China's economy to grow around 8% in 2009, and return to double-digit growth next year.

"The pessimism that surrounded the outlook for the Chinese economy as we entered 2009 appears to be passing. Confidence and revenue have returned to the broader marketplace in the second quarter as key sectors increased spending patterns," said Bessie Lee, GroupM's CEO, China in Shanghai.

In 2008, media spending in China grew 22.6%, driven by the country's strong economy and additional spending spurred by the Olympic Games in Beijing.

GroupM's Bessie Lee in Shanghai
GroupM's Bessie Lee in Shanghai
Next year, spending will be up partly because of advertising related to two major events: the 2010 World Expo in Shanghai and the Asian Games in Guangzhou. These events, coupled with China's fast-growing economy and increasingly wealthy consumer base, suggest more optimism about the prospects for the Chinese media market in 2010.

"We think it is likely that media investment in 2010, while failing to reach the dizzy heights of 2008, will far exceed the growth rate in 2009," said Shanghai-based Lucy Zhang, GroupM's futures director in China.

The internet is expected to be the fastest-growing advertising medium in both 2009 and 2010. China currently has an estimated 338 million internet users, easily surpassing the U.S. as the world's largest internet community. The number of online households is growing by nearly 88 million every 12 months.

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