Chinese Broadcaster Cashes in on Olympic Ads

21 November 2007

BEIJING: The four-yearly sporting spectacle that is the Olympiad is also one of marketing's great cash cows, attracting billions of dollars from advertisers who know their brands will be seen by hundreds of millions of people across the planet.

Next year's Beijing event, to be shown by state broadcaster China Central Television, has been the subject of high octane bidding for commercial spots during the Games.

The Chinese arm of Austrian-headquartered energy drink maker Red Bull has paid 159 million yuan ($21m; €14m; £10m) to sponsor primetime show My Star, a deal ceo Wang Rui believes "worthwhile".

Expecting an increased ROI, Rui has upped her ad budget for 2008 by 30%, buoyed by the rah-rah of TV airtime auctioneer Yu Jingyu, urging advertisers at the country's upfront sales to "just think how high the ratings could be during the Olympics!"

Other media buyers are more circumspect in their view of the potential riches on offer. Says Lisa Wei, local MD of WWP Group's GroupM: "If your key competitor is a sponsor, you definitely want to use CCTV to counter them. But it should be a reasonable price."

Sunday's spendfest witnessed a total of 826m yuan committed to Olympics airtime, while media buyers say 855m yuan was pledged at earlier sales open only to official sponsors. There will be further such events as the Games edge closer.

Yet, despite the hype, adspend for CCTV's 2008 airtime increased by a relatively modest 18%, attracting a total of 8.03 billion yuan. This compares with 10% to 15% growth during years when the Olympics have not been a feature.

But CCTV faces a dilemma, given its dual role as the nation's biggest broadcaster and the mouthpiece of the Chinese government.

As a result, its business orientation can become skewed. During major Communist Party events, for example, when TV dramas are required to be military-related and ads can be changed at the whim of the propaganda department.

The broadcaster's ad director, Xia Hongbo says CCTV has been trying improve its shows and to get advertisers more involved in programming.

And he proclaims, loyally: "If you want to build a national brand, CCTV is still the best way to do it. With that nationwide reach, it is cheap."

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