China spend tipped to slide by double-digits

<p>SHANGHAI: Monitored adspend across two key mediums in China have </p><p>shown an 18 per cent spike in the first nine months of the year, but </p><p>media agencies insist the advertising economy is actually headed for a </p><p>recession. </p><p><BR><BR> </p><p>If discounts - which are not reflected in the ACNielsen figures - are </p><p>included, agencies say adspend would probably be flat this year, but </p><p>more likely down by five to 10 per cent. </p><p><BR><BR> </p><p>Compared with global economic slumps in the previous two decades, </p><p>China's huge export volume means it far less insulated to external </p><p>shocks this time around. </p><p><BR><BR> </p><p>A senior government official noted that China was beginning to feel the </p><p>impact of the US attacks and he expected the effect would be more </p><p>pronounced next year. </p><p><BR><BR> </p><p>Since local advertisers dominate the spending table, agencies worry this </p><p>will have a knock-on effect on overall spend. </p><p><BR><BR> </p><p>Simon Woodward, executive director of broadcast for Carat China, added: </p><p>"Historically, growth has been at disproportionately large levels, but </p><p>the recession has hit China." </p><p><BR><BR> </p><p>Among the losers this year is the vitamins and tonic category, although </p><p>it remains the biggest-spending segment, accounting for about 12 per </p><p>cent of monitored spend. The category has dipped by almost nine per </p><p>cent. </p><p><BR><BR> </p><p>Chris Walton, chief executive of MindShare China, said the </p><p>over-the-counter cough, cold and stomach medication category continued </p><p>to show the strongest growth. "But this category is dominated by local </p><p>brands that tend to enjoy very significant rate-card discounts from TV </p><p>stations." </p><p><BR><BR> </p><p>Pharmaceutical advertisers are also bracing themselves for a new threat: </p><p>China is expected to shortly announce restrictions on "health medicine" </p><p>advertising. </p><p><BR><BR> </p><p>Slumping spend has hit television stations hard, with leading players </p><p>facing the unfamiliar prospect of a revenue slide. To a certain extent, </p><p>the stations' wounds are self-inflicted - they have focused on </p><p>prime-time slots and neglected to build up day parts to deliver </p><p>"audiences and not just spots" to advertisers, according to media </p><p>shops. </p><p><BR><BR> </p><p>CHINA ADEX MONTHLY HIGHLIGHT - TOP 10 CATEGORIES </p><p>Period: September 2001 YTD </p><p>Unit: RMB$000's </p><p> TV Newspapers Magazines YOY% </p><p>Tonic & vitamin 7,385,833 500,166 18,057 -8.90% </p><p>Miscellaneous 1,074,815 3,199,442 24,418 28.10% </p><p>Chinese OTC 3,639,336 355,171 8,306 32.70% </p><p>Residential estate-sale/ </p><p>rental 604,690 2,211,459 20,927 99.20% </p><p>Shampoo & conditioner 2,635,198 13,380 22,113 62.30% </p><p>Retail & service- </p><p>miscellaneous 184,077 2,276,355 57,027 17.20% </p><p>Cough & cold 2,290,234 68,067 3,106 28.90% </p><p>Professional service 442,311 1,287,553 18,103 4.00% </p><p>Communication equip/svc 926,746 792,996 24,825 47.60% </p><p>Chinese wines & spirits 1,458,720 65,338 3,582 -4.40% </p><p>Total for top 20 categories 51,229,968 17,741,341 1,031,331 18.30% </p><p>Source: ACNielsen </p><p><BR><BR> </p>