Staff Reporters
Jan 22, 2013

Marketers' budgets to rise in China, but not keep pace with inflation: R3 study

BEIJING – R3’s latest bi-annual study on media inflation in China says marketers’ budgets are set to only increase 7 per cent on average this year, with net inflation outpacing their own budget increases.

Marketers' budgets to rise in China, but not keep pace with inflation: R3 study

The study covers more than 200 individual media channels across TV, digital, print and outdoor, and is compiled through a survey of China’s leading marketers and agencies. It looks into three key variables: ratecard inflation (the likely published price increases), net inflation (the expected final increases) and marketer budgets (how marketers will invest more by media).  

The study shows that 2013 net media inflation forecast at 14 per cent, lower than last year’s forecasts.

“Marketers are going to have to continue to be more creative with their approach to media, to help overcome this gap, and drive greater ROI for their businesses,” said Fora Liu, senior consultant at R3. 

Although digital dominates budget increases at 18 per cent up, driven by increases in video and Weibo, estimates of net media inflation show likely increases of 16 per cent only, due to pressure on inventory, increased number of marketers and more competition. 

“Marketers are finally seeing digital as a true mass media, and this demand, particularly for social, is driving up media owner expectations,” said Liu.

While marketers expect to reduce newspaper and radio expenditure in 2013 in order to find funds to invest in digital, TV remains buoyant with 50 per cent of expenditure on average to be invested. 

The study also noted some massive premiums in both flagship channels and properties on CCTV, as well as Hunan, Anhui and Zheijang Satellite. 

“In many ways, the provincial satellite auctions of early November set the baseline for marketer sentiment for 2013,” said Liu. “We saw airtime premiums between 34 per cent and 161 per cent, reflecting a strong engagement from potential marketers.”

Source:
Campaign China

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