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