Frenzied prime-time bids confound critics

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