Chinese adspend to rise by 5.8%

10 September 2009

SHANGHAI: Advertising expenditure levels in China will increase by 5.8%, to 254.4 billion yuan ($37.3bn; €25.5bn; £22.5bn), this year, and grow by a further 9.8% in 2010, GroupM, the media arm of WPP Group, predicts.

In June, GroupM estimated that the Asian nation's ad market would expand by 3.2% in 2009, followed by an uptick of 8.9% over the next 12 months, but it has raised these figures in line with a more positive economic outlook in the country.

As such, it now expects television advertising revenues to rise by 5.8% this year, to 159.2 billion yuan, and by 6.4% in 2010, when the medium will record a total value of 169.4 billion yuan.

Outdoor will register an average annual improvement of 7.5%, as sales climb to 33.1 billion yuan by the end of 2010, while newspapers will post a decline of 5% and growth of 4% this year and next respectively, to 27.3 billion yuan overall.

The internet will be the fastest-growing medium in this period, up 20.3% in 2009 and 25% in 2010, overtaking newspapers with revenues of 27.6 billion yuan by the end of the decade.

Other digital media, including screens, will be up by 10% this year and 35.1% next, as advertisers divert 8.9 billion yuan through this channel next year.

Radio will post double-digit growth rates in 2009 and 2010, as sales reach 8.5 billion yuan by the latter date, while magazines will grow by 5% in both years, to 4.4 billion yuan.

The World Expo in Shanghai and Asian Games in Guangzhou are expected to provide impetus to media spending in 2010, although the former event will also lead to restrictions on outdoor ads being put in place in certain areas of the host city.

Bessie Lee, ceo of GroupM China, said "the pessimism that surrounded the outlook for the Chinese economy as we entered 2009 appears to be passing. Confidence and revenue have returned to the broader marketplace in the second quarter as key sectors increased spending patterns."

Data sourced from Asia Media Journal; additional content by WARC staff.