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