Chinese Adspend Rocket Slows to Orbital Velocity

20 February 2006

Advertising expenditure growth within the People's Republic of China slowed in 2005 to a mere 18% - a rate for which any other large consumer economy would declare a day of national celebration.

But last year's result appears puny against growth rates of 39% in 2003 and 22% in 2004. Nonetheless, the Chinese advertising environment remains buoyant, according to a report released last week by CTR Market Research in conjunction with TNS Media Intelligence.

Alongside such oriental fizz, 2005 growth within the globe's largest ad market, the USA, appears flat at $150 billion (€125.99bn; £86.19bn), a lacklustre rise of just 3%.

According to some industry pundits, China is set to replace Japan as the world's second-largest market by 2010. However, Jason Fu, deputy director of media intelligence at CTRMR, believes that the Chinese market has reached orbital velocity and will gently decelerate to circle the planet for a few turns. He expects growth next year to ease to around 15%.

Based on published ratecard figures, CTRMR estimates adspend last year at about $30 billion, placing the nation neck and neck with the United Kingdom and Germany as the world's third-biggest ad market.

Foreign companies represent about 30% of total Chinese advertising spend, with Procter & Gamble's Olay face cream and Rejoice toothpaste the country's top-spending brands. This is a reversal of the situation in 2004 when foreign brands were vastly outspent by local Chinese products.

Data sourced from Wall Street Journal Online; additional content by WARC staff