Limit on TV ad time give Web firms the edge
BEIJING - Industry experts said that Internet media may see unexpected growth in advertising revenue this year, thanks to the recent government rule changes.
The State Administration of Radio, Film and Television put an advertising time cap on all Chinese TV channels as of the beginning of the year, limiting it to no more than 12 minutes in each program hour, in contrast with no more than 20 percent of the program time limitation on advertising in the past.
The purpose of the new rule is to regulate chaotic TV advertising.
With major TV stations increasing their ad-rates across the country - some up to 90 percent or even higher, advertisers are being forced to abandon their original marketing plans. For some they have no alternative except to invest in Internet media.
According to a newly released report by CR-Nielsen, the Chinese joint venture of the international market research firm Nielsen, Internet advertising expenditure for the first quarter has reached 4.06 billion yuan ($595 million), a significant increase of 52.7 percent compared with the same period last year.
"An increase in Internet advertising is the spotlight of China's advertising market this year due to the government's new rule on TV media and the fast development of the whole advertising market," Chen Gang, associate dean of the school of journalism and communications at Peking University, told China Daily.
Additionally, the CR-Nielsen report pointed out that the fashion, automotive and retail industries were ranked the top advertisers, which contributed most to an increase in Internet advertising revenue during the first three months of this year.
Fashion industry ad spending came in at 720 million yuan during the period, while automotive and retail industries spent 630 million yuan and 440 million yuan respectively.
In March, Toyota Motor Corporation, 361 Degrees International Ltd, a Chinese sports goods company, and Shanghai Mecoxlane International Mailorder Co Ltd spent the most on Internet advertising, laying out 36 million yuan, 32 million yuan and 31 million yuan respectively.
Last year, Internet media surpassed TV and newspaper media, becoming the fastest growing media resource with a 39 percent increase on its advertising revenue compared with the previous year, and much higher than the 13.5 percent increase year-on-year of China's total advertising spending.
Meanwhile, the two biggest traditional media, TV and newspapers, increased 13.9 and 18 percent respectively.
By the end of 2009, the Internet population in China hit 384 million, ranking China as the country with largest Internet population in the world, according to a report by China Internet Network Information Center.
Rising TV advertising rates has made Internet media more and more popular among advertisers, said Peking University's Chen.
Ad-rates for China Central Television (CCTV)-1, CCTV-2 and CCTV-3 in the first quarter this year have increased 85 percent, 92 percent and 100 percent respectively compared to the same period last year, according to a March report by Beijing Dentsu Advertising Co Ltd, a joint venture 70 percent controlled by Dentsu, one of the biggest advertising firms in the world.
Tian Tao, vice-president of CTR Market Research, said he believes new media would gain a share of advertising outflow from TV media because of their low costs and comprehensive audience coverage.
CHINA DAILY
(China Daily 04/21/2010 page15)
