CCTV auction results could curb rate hikes

CCTV raised nearly Rmb 5.9 billion (US$730 million) in last month's auction, falling slightly short of a goal reportedly set at Rmb 6 million. The broadcaster recorded less than 13 per cent increase in auction revenue, its lowest growth in five years. "Hopefully, the results of this auction will regulate inflation a lot better than before," said Bessie Lee, CEO of Group M China. "This will send a message to the other stations that there cannot be 30 to 40 per cent inflation." In recent years, steep rate card hikes had become common, as regional and provincial broadcasters took their lead from the vast sums traded at CCTV's auction, which, at its peak, surpassed a 30 per cent growth rate. Lee speculated that one reason that growth had slowed was that return on investment has become increasingly important for bidders, looking beyond the status that comes with advertising on CCTV to more precise measures of what particular spots offer. "There was a lot more analysis, a lot more calcuation and a lot more planning in how much money (advertisers) wanted to bring into the auction," she said. Procter & Gamble remained the biggest bidder for the second year running, with an Rmb 376 million outlay, slightly less than the amount it spent last year, while FMCG rival Unilever surged into second place, with its Rmb 249 million auction spend, more than four times greater than last year. The household products category in general showed the biggest increases in spending, with a 233 per cent boost in spend. Other vibrant sectors included the financial and insurance industry, with spend up 138 per cent, and telecoms, with spend up 109 per cent. The number of multinationals taking part in the auction continued to rise, increasingly diverting ad budgets from local and regional stations to CCTV's national network and satellite operators as they expand their footprint in China. The remainder of the top 10 largest-spending firms were domestic companies however, led by Yangshengtang, Bright Dairy and Yili Dairy. Special slots around the World Cup went to China Mobile, which paid Rmb 103 million for two 30-day packages, a daily outlay of almost Rmb 3.4 million. Prime slots such as the World Cup, were included in the auction for the first time this year in a move by CCTV to lock in more money from advertisers to stave off competition from rival stations.