China ad spend to reach $44.9 bil in 2010

16 pct rise in spending fueled by TV demand

BEIJING – Chinese advertising spending will rise 16% this year to $44.9 billion, led by a spike in projected ads around the ongoing Shanghai Expo and the Asian Games in South China in Nov., according to an author of a report by GroupM, a leading media buyer.

Lucy Zhang, director of GroupM Futures, told The Hollywood Reporter that this year’s Chinese ad spending bump is anomaly and that growth in spending in 2011 will return to “normal” levels of about 11%, reaching $49.6 billion.

“The recovery in China’s advertising industry this year from the financial crisis of 2009 will be hard to maintain in 2011,” said Zhang, whose report was released from Shanghai on Wednesday.

With booming 2010 ad spending growth, Chinese TV especially remains a seller's medium, the report said, noting that demand for airtime on channels operated by industry leaders China Central Television, Beijing TV and the Shanghai Media Group far exceeds supply.

“The [Chinese] media market is about to begin an era of hyper fragmentation, offering media agencies and advertisers a massive degree of choice when formulating media plans,” Zhang said.

In dollar terms, the projected Chinese 2010 ad spending growth is led by a 16% rise in spending on TV ads, which GroupM said it expects to rise to $28 billion this year from $24 billion in 2009.  

GroupM said that ads on platforms such as digital, events and sponsorship offer new ways to reach China’s emerging middle class, a swelling group of city-dwellers whose per capita disposable income grew to $2,515 in 2009, up from $816 in 2000, a 173% jump that drove a near-tripling of retail sales volume.

As China’s population of Web surfers swells to more than 420 million as of July, ad spending will continue its shift away from TV. GroupM predicts 2010 online ad spending at almost $4 billion, up 30% from the $3 billion spent online in 2009.

The GroupM report, drawing on data shared by its parent, global advertising giant WPP, also said China’s overall ad spending growth would slow next year to 11% to reach $49.6 billion by the end of 2011.
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