CCTV ad takings up 18.5 per cent in record auction

The top bidder this year has not yet been revealed.

This year also saw Pepsi and Unilever join the auction for the first time. Aside from the FMCG giants, this year’s auction was driven by accelerated spending from domestic players in China.

Greg Paull, principal of R3, said: "There are still a lot of local clients dominating the auction. Some of the top players from previous years such as Mengniu, Yili and Midea have come to the fore. Local marketers still over-index on CCTV as they try to build brand reputation."

The sharp rise in spending on CCTV follows a 16 per cent rise last year.

Data from GroupM China showed that food and beverage, alcohol and finance and insurance sectors dominated the auction (46.5 per cent). Alcohol companies increased their bidding by 170 per cent. These include 14 brands were Chinese wine and three were beer brands. A spokesperson for GroupM said this was an indication there would be fierce competition among the alcohol companies.

Meanwhile, on the back of the Government’s stimulus policy, home appliance and auto brands showed a better performance, with bidding increasing by 70 per cent. Additionally, the home decoration sector saw an increase of 116 per cent from last year.

The most popular advertising slots were around Chinese New Year specials and 2010 sporting events including the football World Cup and Winter Olympic Games, to both of which CCTV has exclusive broadcasting rights. Bidding prices of commercial breaks before and within sporting events increased by as much as 50 per cent. Sports, beer and home appliances will advertise heavily around the events.

GroupM hailed the results of the auction as an indication that China’s advertising industry was healthy. The spokesperson noted that the sharp uplift was being driven by the momentum of global economic recovery, price adjustments at provincial satellite TV stations and new CCTV advertising bidding rules.

A ruling by the State Administration of Radio Film and Television (Sarft) regarding the length of commercial breaks has seen satellite channels increase their rate cards, which in turn has made CCTV's inventory more competitive. 

Bessie Lee, CEO, GroupM China said: “We have seen much higher demand and limited supply at the CCTV auction. Even the pre-bidding negotiation with advertisers was more controlled and regulated than previous years as a result of the limited supply. Clients showed a more active attitude in the bidding. This in turn has made CCTV rates and coverage look very competitive and cost-efficient.”

Warren Hui, MD, China Media Exchange, commented that the continous growth of CCTV bidding is a signal of further consolidation of the television market in China. "The biggest challenge for 4As agencies now is how to prepare for a market situation that sees more and more strong television groups. Brands' previous planning by market may need to be changed to top-down planning on a national level with local support. This trend is not just a reflection of the media market, but also a reflection of the increasing importance of second- and third-tier cities in terms of consumption power.”

Hui added: "The 18.5 per cent growth is not as 'radical' as other people think. I would say it is a stable and healthy growth."