Who's leading Olympic adspend in China

Nielsen reports on which sponsors are ahead of the game when it comes to advertising

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SHANGHAI--The Olympic Games are already boosting media spending in China, according to research by Nielsen Media. Advertisers in China spent RMB 442 billion ($63 billion) last year, a 15% increase over spending in 2006.

Spending by all Olympic sponsors and partners in 2007 totalled RMB 19 billion ($2.7 billion), a 22% increase compared to 2006, and 4% of the entire year’s total adspend.

The 2008 Olympic Games have three main sponsor categories: 12 worldwide partners selected by the International Olympic Committee; 10 sponsors (including 8 Chinese brands); and 11 Beijing partners (9 are local brands). Johnson & Johnson is the only company that is both a global sponsor and a Beijing partner.

Partners and sponsors come from a wide variety of industries including automotive (Volkswagen); banking and insurance (Visa, Manulife, Bank of China, and PICC, the largest non-life insurer in China); electronics (Samsung, Panasonic, Haier); energy (Sinopec, China National Petroleum); fashion apparel (Adidas, Omega); fast-moving consumer goods (J&J, McDonalds, Coca Cola, Budweiser, Tsingtao, Yanjin Beer, Yili dairy, Uni-President); logistics, (UPS, Air China); information technology (Lenovo, Sohu.com); and telecom (China Mobile, China Network Communications).

The 10 worldwide partners spent RMB 8 billion ($1.14 billion) on advertising in China last year, a 32% increase from 2006. Sponsors invested RMB 4.1 billion ($585 million), up 23%. The Beijing partners spent RMB 6.6 billion ($942 million), up 12%.

The only partner or sponsor companies that didn't boost adspend in 2007 were CNPC, Kodak, Lenovo, Sohu and Panasonic.

“There were also sponsors which didn’t advertise much in 2007 despite the international exposure that the games provide,” said Rita Chan, Shanghai-based exec director, sales & client service for Nielsen Media in China. She cited Atos Origin, an international technology group, and mining company BHP Billiton.

Nielsen expected most sponsors to spend a lot more in early 2008, but only a handful of companies posted huge increases in January 2008 compared to December 2007. They were Budweiser (up 265%), Coca-Cola (131%), instant noodle maker Uni-President (124%), Johnson & Johnson (81%), Tsingtao (63%) and Lenovo (45%)

Sixteen local companies and 16 multinationals are supporting the 2008 Olympic Games. Total spending by foreign companies in 2007 reached RMB 10 billion ($1.43 billion), up 34% from 2006, and 8% higher than media spending by local brands.

In 2006, foreign brands spent 10% less than local brands, but multinationals are narrowing the gap. The top three foreign brands by ad spend were McDonalds, Coca Cola and Johnson & Johnson. The top three local brands by adspend were China Mobile, dairy brand Yili and Haier Group, which produces white goods and electronics.

The internet has played “an important role as another viewing platform for the games. Online advertising will attract [many] advertising dollars besides television,” said Ms. Chan. The three brands with the highest online adspend in 2007 were Lenovo, China Mobile and Samsung.

This is the first in an ongoing series of special reports by Nielsen Co. about the marketing aspects of the 2008 Olympic Games.

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