Frenzied prime-time bids confound critics

BEIJING: Beverage company Wahaha offered the top bid in China Central Television marathon prime-time auction, which raised Rmb2.6 billion (US$314.1 million) for the national broadcaster. Frantic bidding during the 13-hour auction confounded media agencies, who were expecting lacklustre results under the current market conditions. MindShare Beijing buying director Lisa Wei, said: "Since most TV vendors were not confident about 2002, we thought that media inflation would keep within the five to 10 per cent range." MindShare China chief executive, Chris Walton, added: "CCTV is coming under increasing pressure in China, so to have such a positive revenue growth at an early stage will boost their outlook for 2002." Hangzhou-based Wahaha snapped up prime-time slots to air advertising between CCTV's evening news and weather each day for the first two months of next year. Sichuan Taiji Pharmaceutical Company was another successful bidder. Bidding for two-months use of prime-time slots, each only five seconds long, started at Rmb8 million and ended at Rmb15.1 million. Bidding was equally fierce for two newly-created slots in the weather report programmes. According to MindShare, the overall dominance of pharmaceutical companies had lessened in this year's auction, partly because of the ceiling of eight per cent of sales revenues imposed on advertising budgets. Pharmaceutical companies still generated 27.5 per cent of revenues at the auction, making it the largest category. However, the slack by pharmaceutical advertisers have been taken up by advertisers in the food, electrical appliances and IT categories. There were no international advertisers at the auction. Previous auctions had attracted Philips, Colgate and Hitachi. There were also notable absentees among local brands such as Mei-Di and Haier in line with the decreasing presence of the home appliances category. Walton added: "The withdrawal of notable local and international advertisers is of little surprise. From a true media viewpoint, there has long been a question mark over the value derived from broadcasting TVCs of very short durations in the same slot on the same channel for extensive periods of time." A major concession from CCTV - allowing advertisers to buy slots over a two-month instead of a full year - was instrumental in CCTV attracting strong bids. Agencies said the change allowed advertisers to work within their budgets, while taking into account the seasonality of different product categories. CCTV's stronger-than-expected showing has worried other television vendors in the country, who fear that the national broadcaster has sucked up a sizeable chunk of next year's budgets. CCTV's introduction of new dramas next year plus the airing of the World Cup are expected to further divert revenues of a smaller advertising pie away from provincial TV stations. "Provincial stations (are worried) as they tried hard to challenge CCTV before the bidding," said Wei. She expected that the World Cup plus a planned overhaul of CCTV-3 would further affect revenues in a softened market for provincial operators. Bidders at the CCTV auction were required to deposit Rmb1 million before participation. The bill was split 60:40 between an advertiser and its agency respectively. - Additional reporting by Christy Liu.

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