CCTV ad auction up 18.5% for 2010

Rising ad prices indicates optimism among consumers

BEIJING -- China's equivalent of the U.S. networks' "upfront" ads sales drew record bids of 11 billion yuan ($1.6 billion), marking an 18.5% jump in the potential cost of 2010 prime time spots on China Central Television, the state's flagship broadcaster.

The bids Wednesday night in the annual CCTV auction, which is considered a bellwether for Chinese consumer sentiment, seemed to indicate that many companies believe that spending here will pick up faster than elsewhere as the world climbs out of recession. China's economic growth looks set to exceed its annual target of 8% this year and analysts are predicting a steady 2010.

Xia Hongbo, head of the network's ad division, said the average price of commercial time rose more than 20% on CCTV, whose 14 channels reach nationwide and command a market share of 32%, greater than that of any competitor.

Xia told local media that the 1,000 companies participating in the 13-hour auction at CCTV's Media Center were proof of country's resilience.

"The concerted efforts from our Chinese enterprises and entrepreneurs underlined one theme. China is like Noah's Ark, saving the world from the global financial crisis," Xia said, in an apparent reference to the denouement of the Columbia Pictures apocalyptic movie "2012," which is just out in Chinese theaters.

As usual, bidders for front-and-center exposure on CCTV were predominantly sellers of consumer lifestyle products and services, such as beverages and food and medicine and health.

Inner Mongolia-based Mengniu, a dairy products manufacturer and distributor listed on the Hong Kong Stock Exchange, placed the highest bid of the night to be the sole sponsor of the popular 8-10 pm drama series slot for the first six months of 2010. Mengniu's bid of 203.9 million yuan ($29.8 million) knocked its Shanghai-based competitor Bright Dairy & Food out of the running.

"The competition this year between leading companies was much fiercer, which promotes the development of the whole industry," CCTV's Xia told the Shanghai Daily.

As Chinese begin to spend more on non-essentials, bids doubled from advertisers in the home decoration business, rose 80% among home appliance makers, and jumped 70% among car manufacturers.

Guangdong-based electronics maker Midea won sponsorship of the Spring Festival live gala, Chinese TV's corollary to the U.S. Super Bowl in terms of number of viewers. Midea bid 52.01 million yuan ($7.6 million), up 29.9% from last year's winning bid of 40 million yuan ($5.85 million).

Hangzhou-based Zhongce Rubber, China's biggest state-owned tire maker, bid 47.2 million yuan ($6.9 million) for the ad space before the nightly CCTV news at 7 pm, up 9% from education company Juren Group's bid of 43.3 million yuan ($6.34 million) last year.

Sichuan-based liquor maker Lang Jiu paid 33.3 million yuan ($4.8 million) for the rights to advertise on a program related to the soccer World Cup, set to be broadcast on the network's dedicated sports channel CCTV-5.

In addition to the World Cup, CCTV-5 also will host the Asian Games and the Winter Olympics next year, prompting analysts' to forecast channel revenues of at least 2 billion yuan ($293 million).

Jiang declined to comment on the forecast but told The Hollywood Reporter that the big three sports events would be a strong draw next year. "Definitely so," Jiang said. "We simply put on the programming and our advertising department creates the platform."

Also on the rise at the auction again this year were bids by financial companies, such as China Ping An Insurance. "We focus on this platform because we have seen success from it," Ping An's brand advertising manager Sheng Reisheng, told local media.

More than 72.8 million people watch CCTV programming each day, seven times the audience for NBC Nightly News, one of the highest-rated news programs in the U.S., according to data from CSM Media Research, a CCTV joint-venture with global advertising giant WPP.

Some 50 international companies participated this year but U.S. fast-moving consumer goods company Procter & Gamble, the top bidder from 2004-2007, was barely visible this year.