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.
