CCTV auction seeing baijiu bids down, auto speeding up

In China, expensive baijiu is not only a liquor, it's also a status symbol. High-end baijiu companies used to be big spenders at CCTV's auctions. For instance, 2013's top bidder was Jiannanchun, a prominent baijiu brand.

But with the changing of Party leaders and the setting of new policies to fight corruption and cut governmental consumption, the demand for high-end baijiu has dropped sharply. That will be the case for the foreseeable future. The industry is facing a difficult time.

As a result, high-end baijiu companies must carefully consider the most effective use for their advertisement budgets and deliver their ads on the most closely targeted media platforms.

Chen Gang, a professor of advertising from Peking University, said that the Chinese advertising industry is restrained by many factors. The macro-economy is one of the most influential ones.

Chen said expensive baijiu and high-end catering industries were the sectors that were most affected by the macro-economy and the new policies. "The government's new policies have squeezed the bubble out of the consumer market. Combating extravagance and waste will adjust the consumer market and make it return to a real one," he said.

"Baijiu, especially the high-end baijiu industry, has decelerated sharply this year. Now they are advertising on the radio, which was impossible in the past," Chen noted.

On the other hand, the demand for automobiles is huge. For many Chinese, buying a vehicle is not a dream anymore. The idea of a car has changed from being a luxury to something the average person can afford.

According to huxiu.com, a business information provider, automobiles are China's next consumption hot zone after real estate, and competition among carmakers will be fierce.

So, the auto industry can be said to be entering an "era of integration," in which all players will not only focus on precise marketing - ads on the Internet, for example - but also will pay attention to brand-building on such mass media as television.

Therefore, it is noteworthy that automotive companies were the most impressive performers in the auction. All the major brands were present: Nissan, Volkswagen, Honda and Chrysler, along with some local ones.

Shanghai Volkswagen committed 26 million yuan for the exclusive right to have its name associated with entertainment program Star Employee. Shanghai Volkswagen is a joint venture of SAIC (Shanghai Automotive Industry Corporation) and Volkswagen AG.

One local bidder was Hualing Xingma Automobile Co Ltd, a heavy truck and special automobile manufacturer. It won a coveted daily 5-second ad slot during the 7 pm evening news.

Liu Hanru, Hualing Xingma's president, said he believes advertising on CCTV will help build his brand. "Our company will invest 100 million yuan on CCTV's platform in the first half of 2014." Liu said.