The annual benchmark CCTV auction, held on November 8 in Beijing,
showed an increase over last year's turnover of 12 per cent - a stark
contrast to 1999's drop of 34 per cent.
However, the results were greeted with mixed feelings, with only a few
foreign brands making their way to the auction, which sells off the
primetime slots for the national news and weather report on CCTV for the
year.
The auction brought in RMB 2.15 billion for 2001 slots, up from RMB 1.92
billion in 1999.
The overall situation was better than last year according to some media
executives, while Ms Grace Wen, buying director with Zenith Media
Beijing pointed out that "two new timeslots were auctioned this year and
accounted for much of the increase."
While the CCTV auction is an important benchmark for the advertising
industry, much has changed since its initial beginnings in 1994, making
the event more transparent amid growing competition and an increasingly
sophisticated market.
While until 1996 the auction was held as a closed bid, a lack of other
alternatives and effective media measurement tools made bidders
outperform one another. Following widespread criticism, the auction was
changed to a partially open bid in 1997, while the winner of the
"Auction King" title, going to the biggest spender, was also scrapped a
year later.
Industry experts agree that the open bid has substantially brought down
the price of advertising slots.
"But more clients are looking at the cost efficiency of advertising
slots and with the auction this is not easy to calculate," said Ms
Wen.
However, even though there are more than 1,000 terrestrial, cable and
provincial satellite channels, nothing challenges the national coverage
of CCTV, especially for brands with national distribution.
"It depends on what the advertiser is looking for. The big budget time
slots are still worthwhile for some local brands which have national
distribution," said Mr Gary Sin, Universal McCann Beijing general
manager.
"People living in remote areas often only have access to low quality
programming from local TV stations and CCTV is widely watched. Also, it
is matter of image. The auction gives a brand a big name and
credibility."
Foreign brands, including Colgate, Philips and Hitachi, have found their
way onto the slots.
"Foreign goods often have their distribution restricted to key cities,
so there is no need to pay for national coverage," said Mr Charley Kan,
media director of The Media Edge.
"Also, the five-second time slots do not fit in with the marketing
strategy of international players. They prefer to send out a message for
a product, while locals like the five-second brand announcement."
This year's auction saw seven timeslots (228 blocks) auctioned off.
According to Zenith Media, the 3rd Harbin Pharmaceutical Factory was the
top bidder, spending RMB 112.57 million; the Tai Ji Group for the weight
loss product Qu Mei came in second with RMB 97.63 million; and Bubugao
Group for home appliances third with RMB 95.24 million.
While TVCs for electronic goods have cluttered the slots over the last
two years, and alcohol limited to a few categories, this time medical
products were the among the top winners.
Source: CMM Intelligence.
