New rules for Chinese TV ad market

16 September 2009

BEIJING: Television advertising in China will be subject to a range of new restrictions from next year, as the country's State Administration of Radio, Film and Television seeks to limit both the number of spots shown and the marketing of certain products.

Advertising expenditure levels in the country are expected to rise by 5.8% this year according to GroupM, with television up by the same amount in 2009, and a further 6.4% in 2010.

However, the government department charged with regulating the industry has now instituted a set of new policies, which are set to come into force at the start of January next year.

From this date, commercials shown during prime-time – between 7pm and 9pm – will have to be no more than a minute in length, and individual ads will also be limited to one showing each per 45-minute programme.

During non-peak times, the Administration has ruled 45-minute shows can contain two longer ads of 1.5 minutes, as opposed to one ad of 2.5 minutes, as is the case at present.

Moreover, public service communications will take a mandatory 3% share of all advertising slots during prime-time on TV, and between 11am and 1pm on radio.

Among the products that will have their right to advertise restricted are prescription drugs, tobacco, chat lines, "superstitious tests", such as fortune telling, and breast milk substitutes.

Any broadcasters found to be in contravention of these criteria could receive a 30,000 yuan ($4,412; €3,009; £2,673) fine, and even have their licence revoked.

Wu Xiaofeng, deputy director of the advertising arm of the Shanghai Media Group, argued the "current ad length per episode during our prime-time TV series is 2.5 minutes."

"We will probably raise the prime-time ad price if we have to cut the number to rebalance demand and supply."

He added, however, that a shift towards different marketing tools such as sponsorship should help offset any potential decline in revenues.

Data sourced from Variety/Shanghai Daily; additional content by WARC staff