Media spending up 18% in first half

And other news in Greater China

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BEIJING--Events like the soccer World Cup this summer and and the Winter Olympics in Turin, Italy, and China’s Supergirl contest helped drive China’s advertising market in the first half of 2006, according to CTR Media Intelligence, part of CTR Market Research. Media spending from January to June grew to $19.5 billion (RMB 155.5 billion), an 18% increase over the same period last year, according to CTR, a joint venture between CITVC and TNS. China is home to 1.1 billion TV viewers and 400 million radio listeners.

Broken down by media, TV ad spending grew by 22% to $14.9 billion during the first half, according to CTR data. Ad spending on newspapers increased by 5% to $2.6 billion; outdoor media by 9% to $1.3 billion; magazines by 9% to $312 million; and radio by 15% to $303 million. Radio and outdoor media did not replicate last year’s extraordinarily high growth rates due to less spending in those media by some key industries like pharmaceuticals and real estate.

Other sources, taking media discounts into account, estimate China's ad spending is lower. A new global forecast by Group M, for instance, estimates total media spending in China for the full year will be $19 billion in 2006, including $13.3 billion spent on TV advertising.

According to CTR data, the top industries in terms of ad spend in all media during the first half were toiletries, pharmaceuticals, business & services, food and beverages, the last of which recorded the fastest growth rate among all categories with a 55% increase.

Spending on toiletries only grew by 5%, to $3.2 billion (RMB 25.6 billion), much less than last year's 22% increase. The slowdown was largely because Procter & Gamble is moving its investment in big cities from brands like Rejoice shampoo and Crest toothpaste to other categories, as local brands in these cities are “gradually fading out,” said May Zhao, general manager at CTR Media Intelligence in Beijing. “P&G also decreased its ad budget accordingly.”

P&G continues to invest in these brands in second and third tier cities, helping the category achieve some growth, even though TV in such areas is far less expensive.

Automobiles, after a lukewarm performance when ad spending dropped by 8% last year, returned to the top five ranking with 28% growth. The finance, investment and banking sector grew even faster, with a 40% increase in ad spending.

Although the profit margin for pharmaceuticals is diminishing and administrative control on advertising in this sector is tightening, the industry has received a boost from the growing popularity of herbal and healthy drinks such as Wang Lao Ji herbal tea, produced by Wang Lao Ji Pharmaceuticals and Harbin No. 6 Pharmaceuticals’ health tonic, Miao Tiao Shu Nv. The latter, for example, was launched in March with a three-month marketing budget worth $150 million, making it the sixth largest brand in the country by ad spending. The World Cup in Germany, gave another beverage--beer--a big boost. Ad spending in that category jumped 150% in June 2006, compared to the same month last year.


Expedia partner ELong appoints Nitro ahead of travel market explosion
SHANGHAI--ELong, a Chinese online travel service provider in China and the Chinese arm of Expedia, has appointed Nitro Group, an independent agency network based in Shanghai, to handle its communications in China.

While it's still early days in the online travel industry in China, the market is developing rapidly as the number of Chinese traveling has grown exponentially with changing business and personal lifestyles. Rising incomes, a zest for tourism and hosting of international events like the 2008 Beijing Summer Olympics will keep China one of the world's fastest-growing travel and tourism markets for years to come.

The World Travel & Tourism Council predicts 8.7% annual growth until 2016, when China will be second only to the U.S. as the world's number one tourism market, worth $354 billion. Beijing-based eLong hopes to tap into the market’s explosion. It recently launched 360 virtual hotel tours that are exclusive to eLong in this market, for example, according to Stephen Drummond, Nitro's group managing director and head of planning in Shanghai.


Gore-Tex will tackle Chinese fakes with first China campaign
SHANGHAI--The outerwear clothing manufacturer Gore-Tex has appointed TBWA Worldwide, Shanghai to create its first brand campaign in China. Ads breaking later this year will try to differentiate the Gore-Tex brand from the generic products flooding the market, which is rife with inferior, mass-produced products bearing fake labels. The win follows a pitch against several undisclosed agencies.


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