Nielsen: China on track for record ad year

Olympics spending offsets earthquake slowdown

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BEIJING -- China posted a 17% jump in advertising for the first half of 2008 and can look forward to record full-year numbers as Olympics media buying helped offset the effects of May's deadly earthquake, a new Nielsen study shows.

According to the Advertising Information Services report released Tuesday, China recorded 244.9 billion yuan ($35.7 billion) in ad spending from January-June across TV, newspapers and magazines.

"Advertisers have now returned to expected advertising levels following a lull in May as a consequence of the Sichuan earthquake," said Richard Basil Jones, managing director of Nielsen Media Research and the Nielsen Co. for Asia Pacific.

TV continued to attract the lion's share of the advertising pie, taking 83%, or 204 billion yuan ($29.7 billion). Newspapers and magazines accounted for 36 billion yuan ($5.2 billion) and 5 billion yuan ($728 million), respectively.

P&G's Olay face cream remained China's No. 1 name in terms of ad dollars spent, with a 3.4 billion yuan ($495 million) advertising budget.

Other top spenders included Olympics sponsor China Mobile, which spent 2.06 billion yuan ($300 million) in the first six months of the year, and non-Olympics sponsor KFC, which spent 2.05 billion yuan ($299 million).

Nielsen's data, which is based on published advertising rate cards, shows that spending by all 28 Olympics sponsors tallied 11.8 billion yuan ($1.7 billion) by the end of June. That figure accounted for 5% of the country's total ad spend for the period.

Following KFC were Olympics sponsor Yili, China's best-known milk brand, which spent 1.3 billion yuan ($189 million) in the first six months, and McDonald's, with 839 million yuan ($123 million).

Olympics sponsors in the media space who raised their advertising included Web portal (up 145%), and PC maker Lenovo (up 112%).

In the sports apparel category, Nike spent 223 million yuan ($32.5 million) on ads, compared with Olympics sponsor Adidas' highest monthly spend in the first half of the year -- 159 million yuan ($23 million) in March.

"An added complication in the sports category is local player and nonsponsor Li-Ning," said Basil Jones, who noted that 29% of Chinese consumers said they thought the brand founded by the man who lit the torch on CCTV was an official sponsor.

Li-Ning, the company founded by the 1984 Olympic medalist, spent only 23 million yuan ($3.34 million) in June.

"Li-Ning has avoided going head to head with the global players in ad spending but rather relies on gaining association through spokesperson arrangement with various athletes and other means," Basil Jones said.

Betting on an association with U.S. swimmer Michael Phelps -- who sewed up a record-breaking eight gold medals in Beijing on Monday -- watch brand Omega more than tripled its spending before the Games from 11 million yuan ($1.6 million) in May to 39 million yuan ($5.7 million) in June.