BEIJING: The economic downturn is starting to have an impact on the Chinese advertising market, where domestic brands are reported to be increasing their spending at a faster rate than their multinational rivals.
China Central Television, the main state-owned broadcaster, saw adspend levels rise by 5.8% in the first fourth months of 2009, to 148 million yuan (£13.5bn; €15.6bn $21.6bn), according to figures from CTR Media Intelligence.
Major multinational advertisers on Chinese television in April included L'Oréal, Kentucky Fried Chicken and Procter & Gamble's beauty brand, Olay.
Domestic pharma specialist Jiangzhong, beverage manufacturer Wahaha – a joint venture between Hangzhou Wahaha Group and Danone – and FMCG company MasterKong were also in the top ten TV advertisers for that month.
Overall, CTR predicts that the national ad market will expand by between 5% and 8% this year, but also argues that the current situation is not without complications.
Tian Tao, vice president of the company, said: "The uncertain trend in China's ad market comes from the uncertainty over when the global recovery will come."
Eric Cheung, cfo of China Mass Media, a TV advertising company, similarly said that from 2005 to 2007, there was "60–70% visibility before year-end for the next year" with regard to potential spending levels, but this has declined markedly.
As such, he now pegged this figure at "30–35%", and added that "visibility is still poor now for the second half – on average you can only reasonably estimate two months ahead."
Despite this, however, many domestic brands have begun to increase their marketing spend.
Shenan Chuang, chief executive of Ogilvy & Mather in China, stated that "domestic brands increased their ad spending by 22% in the first quarter, while foreign brands only added 1%."
Data sourced from Financial Times; additional content by WARC staff