Major advertisers boost spending in China

12 July 2010

BEIJING: Some of the world's biggest advertisers increased their expenditure in China during the first quarter of this year, with product launches and major new marketing drives fuelling the trend.

According to estimates from Media Partners Asia, the consultancy, Procter & Gamble, which topped the spending charts in Q1, heightened its outlay by 52% year-on-year in this period.

L'Oréal claimed second place overall and boosted its media budget by 44%, a figure that stood at 41% for Unilever in third and 56% for Yum Brands in fourth.

Support for P&G's Pantene range climbed by 84% compared with the opening three months of 2009, with its Olay stable enjoying a 38% jump on this measure.

Similarly, L'Oréal's investment in advertising for its main beauty brand expanded by 49%, as competition intensifies in the toiletries and cosmetics sector.

While local corporations in China largely sustained their adspend throughout 2009, foreign firms were generally more cautious, said Rohan Lightfoot, business director for Carat China.

However, having weathered the worst of the global economic downturn, many overseas businesses are redoubling their efforts to enhance their position in the Chinese market.

"The huge established multinational players are absolutely pushing ahead with investment in China,” said Lightfoot.

Shanghai was one beneficiary of this activity as revenues grew by 42%, a total that reached 29% in Beijing and 27% in Guangzhou, in one indication of the continuing attraction of Tier One cities in China.

The nationwide average came in at  19.8%, with Tier Two cities and below generating mixed results, although Shenzhen witnessed an increase in demand of 31%.

As so many brands are now seeking to engage with Chinese consumers, there has been a notable shift towards more nuanced models.

More specifically, while most foreign companies are still placing television at the heart of their campaigns as this medium delivers the greatest penetration, the balance of their output is starting to shift.

For example, the share held by national TV declined from 7% to 5%, and provincial satellite operators, which also often boast extremely wide geographical coverage, dropped from 19% to 11%.

By contrast, non-satellite provincial stations saw their proportion of ad sales swell from 42% to 45%, numbers that stood at 13% and 21% respectively for city stations outside of provincial capitals.

Data sourced from Asia Media Journal; additional content by Warc staff