Adspend growth slows down in China

09 August 2012

BEIJING: Advertising expenditure rose at the lowest level for five years in China during the first half of this year, reflecting the slowdown in the country's economic growth.

According to CTR, the research group, traditional media ad sales increased by just 3.9% in the opening six months of 2012. Domestic GDP rose by 7.8% in the same period, the worst result for three years.

Television outperformed the ad sector as a whole, with returns improving by 5.3%. Despite this, CCTV, the state broadcaster, saw revenues contract by 8.3%, largely due to tighter restrictions on advertising minutage.

Provincial satellite stations also experienced a 7.6% drop in inventory, but income leapt by 9.4%, indicating that rates have climbed.

Newspapers registered a 7.3% decline, mirroring the global troubles facing press titles. The main contributors to this trend included cutbacks by firms in the services and real estate industries.

Magazines, by contrast, enjoyed a 10% expansion, buoyed by hardening interest from companies in the personal care and apparel segments. Radio was also up by 11.5% and outdoor improved by 2.4%.

L'Oréal was the biggest advertiser at the brand level, as the cosmetics line boosted budgets by 50.8% in the opening sixth months of the year. KFC, the fast food chain, was second, after a 14.5% lift.

Wahaha, the food and beverage group, was third, and raised its outgoings by 7.2%. Yili, the dairy giant, came next, having augmented its investment by 18.5%.

Olay, Procter & Gamble's beauty range, was fifth, but down 3.2%, while China Mobile, in sixth, enhanced its spending by the same amount. Dali, another beverage brand, was up by 20%, and took seventh.

Elsewhere in the top ten, McDonald's, the quick service chain, logged a 6% increase. Master Kong, another food and drinks specialist, was off by 37.4%, while Maybelline, made by L'Oréal, improved by 96.5%.

Cosmetics and toiletries remained the largest category overall, ahead of business and services, beverages, food and pharma, with all of these sectors allocating greater resources to advertising than last year.

Alcoholic drinks posted the fastest rate of growth, of 24.8%, with information technology recording an 18.3% expansion. Tobacco adspend, however, fell by 49.6%, a figure standing at 18.1% for household appliances 17.5% for cleaning products.

Data sourced from CTR; additional content by Warc staff