Key things you need to know about investing for optimum returns during China's annual TV bidding season

Paradigm shift in TV investment

In previous years, advertisers tended to focus on China Central Television (CCTV) when it came to prime-time commercials. However, with the growing number of satellite television stations such as Zhejiang Satellite TV and Hunan Satellite TV, the TV advertising landscape has changed.

Advertisers are no longer putting all their eggs in one basket, but casting a wider net across the mainland, investing in programmes run by satellite television stations that fit their target audiences.

For example, Zhejiang Satellite TV’s “The voice of China” was number one among China's variety show programmes. The programme was also a hit among occasional television viewers, especially the post 80s and 90s generations.

Refocusing the Options

Prime-time slots have become extremely scarce, especially in light of the new guidelines. Some television spots, such as spots between ‘CCTV News’ and ‘Topics in Focus’, are so in demand they can cost as much as 644,000 yuan (US$103,000) for a 15-second commercial.

Advertisers are therefore no longer as obsessed with prime-time slots and are rethinking their investment options towards a complete evaluation of their actual investments against factors such as advertising volume, time and gross rating point (GRP) before they plan the bidding.

With the fast-growing popularity of online television viewing in China, CCTV is starting to ‘bundle’ their packages to include online video for bidding, to complement the television slots.

Communicate, Communicate, Communicate

It’s a bit like a marriage – both clients and agency reps need to have chemistry during the preparation stage and on site.

Before the auction, media agencies will counsel their clients on the bidding strategy based on their base and topline budgets, choosing the best spots and optimum advertising periods.

During the bidding process, various situations will occur. For instance, the total number of participants or competitors may increase at a certain bidding site, resulting in an immediate re-evaluation of the topline investment threshold.

Don’t be a one-hit-wonder

There are advertisers who believe that the more expensive the slot, the better it is, and have thus invested their full year’s media budget on prime-time slots.

What usually happens is that consumers will find these brands’ presence diminishing later, never to be seen again — as their strategy does not involve sustenance planning.

Bidding has become only part of the jigsaw

With the rise in netizens, Chinese consumers are shifting to alternative media options such as mobile and online by millions.

In June 2011, there were 485 million internet users in the mainland (source: CNNIC). Of these, 40 per cent used micro-blogging, and 47 per cent participated in social networking sites.

Even though television commercial auctions are one of the busiest and most stressful seasons in the advertising and media arena in China, the conclusion of this busy phase also represents the beginning of the following year’s strategic planning.

Given that this is a year-long investment, advertisers should bear in mind that good strategy goes a long way and that strategic media planning and integrating multiple platforms is key to achieving good ROI.