Chinese Outdoor Adspend on the Up

17 August 2004

Emerging from the throes of market fragmentation, fierce price wars and changes to regulation, the Chinese outdoor media industry could be forgiven for a torpid performance. But new figures from CTR Market Research paint a different picture.

The market research firm found outdoor media spending in Beijing, Shanghai and Guangzhou soared by 60% in the first half of 2004, compared with overall Chinese ad spend which, according to ACNielsen, rose by just 21% during the same period.

Outdoor media giants Tom Group and Clear Media have both boasted strong performances recently. Revenue at Tom's outdoor unit was up 13% for the first six months of the year, and its executives predict a bumper rise of 60–70% for Chinese billboard income.

Despite the extreme market fragmentation, with an astonishing 80,000 outdoor ad firms, Tom's success stems partly from dominating the large-format billboard market in thirty cities across the nation.

Clear Media, 48% owned by US media titan Clear Channel Communications, follows a similar tactic. It has a 98% market share in bus-shelter ads in Shanghai, where new competition is limited by government contracts. Recently, it won the rights to all advertising panels at Beijing International Airport's Terminal One –- guaranteed to hit paydirt in the run-up to the 2008 summer Olympics.

Consequently, Clear Media is on track to post double-digit earnings this year, following a similar success in 2003 of a 20% rise. Chairman Steven Yung plays down fears of a dampening effect from China's cooling economy, claiming that brand advertising becomes more important as competition gets tough.

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