CCTV ad auction draws record bids with almost $ 1,9 Billion sales

10 November 2010 19 h 02 min 13 comments

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China Central Television (CCTV) holds its 17th annual prime-time advertising auction on Nov 8, 2010 in Beijing and reached a new record with sales of 12.67 billion yuan ($1.86 billion).

The broadcast giant launched its 17th annual prime-time advertising auction at 8:08 am on Monday, – the number eight stands for fortune in Chinese culture and “the 12-hour auction raised bids totaling 12.67 billion yuan ($1.86 billion), a 15.52 percent increase on last year”, said He Haiming, vice-director of CCTV’s advertising operation and management center.

250 bidders

About 250 companies, including multinational marketers, travelled to Beijing to pledge $1.86 billion, in China’s version of the TV upfront market held in the U.S. Last year, China’s advertisers committed to spending $1.6 billion.

This annual auction is widely viewed as an indicator of growth prospects not only for China’s advertising industry over the next year, but also for the country’s economy as a whole. Despite the global recession, China has been the fastest-growing major ad market in the world for years, and that’s not likely to change any time soon. In a new forecast looking at the next five years, eMarketer predicts total media spending in China will grow by 14.6% this year, and by 14.0% in 2011, 19.8% in 2012, 14.1% in 2013 and 13.3% in 2014.

Advertising spending growth from 2010 to 2014 (eMarketer)

2010  +14,6%

2011   +14%

2012   +19,8%

2013   14,1%

2014   13,3%

A new record

According to Nielsen Co., “television accounts for about 82% of total ad spending in China. Marketers spent almost $39 billion on TV advertising during the first half of this year“.

“The amount of money sets a new record in 17 years,” he said. This succes is also driven by the ad rates inflation. Strict new rules limiting advertisers’ access to prime time went into effect in January 2010 ant that decision immediately bumped up inflation rates, especially on the China’s only national TV platform.


The CCTV’s advertising auction sales have steadily increased, from 3.32 billion yuan in 2003 to 10.97 billion yuan last year for 2010 slots.

7 years growing auction sales

2003     3,32 billion Yuan

2009    10,97 billion Y

2010    12.67 billion yuan ($1.86 billion), 15.52 percent annual increase

“The top bidders were from the food and beverage sectors, home appliances as well as finance and security. There was also an increased presence by the auto and tourism industries.” 

According to China Daily, “some business tycoons view the network not only as a valuable platform for promoting a brand, but also one for rebuilding a reputation that has been tarnished. At the auction, dairy magnate Mengniu paid 231 million yuan to sponsor several prime-time CCTV series in the first half of 2011, aiming to rehabilitate itself following the melamine scandal in 2008 and the recent market skirmish with its rival Yili.”

The Yurun Food Group won the first bid, paying 50.1 million yuan for 60 days of advertising rights on the time slot following Xinwen Lianbo, the most popular news program in the country. “You have to appear on CCTV if you want to nationally build a name,” said Yang Dongyun, deputy general manager of the Sichuan-based Jiannanchun Group, which manufactures alcohol. “We spent 90 percent of our TV ad budget on CCTV and will add more next year.” 

Foreigners bought 12% of bids

According to Ad Age, “few foreign companies have developed nationwide distribution systems that make it worthwhile to buy significant airtime on CCTV, opting instead for local broadcasters that reach consumers in key markets like China’s Eastern coast, where consumers earn more than those in the interior”. It explains why foreign companies accounted for just 12% of the successful bids this year.

The top spenders were Jing Brand Co., a leading food and wine marketer, liquor manufacturers Wuliangye Group and Luzhou Laojiao Co., Gree Electric Appliances and the Postal Savings Bank of China. The biggest-spending foreign advertiser at the auction was FAW-Volkswagen Automobile Co., a passenger car joint venture between FAW Group Corp. and Volkswagen.

According to Ad Age, “local companies spend more on CCTV than foreigners. Local brands are getting bigger and stronger, and need more national coverage as they expand. Domestic companies have also benefited from the government’s stimulus program, designed to boost spending by Chinese consumers in second- and third-tier cities.  

The power of CCTV

CCTV has 15 nationwide channels and claims a one-third share of the audience market in the first half of this year. According to CSM Media Research, the broadcaster had an audience of 1.23 billion in 2009. Among the 10 most watched TV channels in the first half of 2010, seven of them belong to CCTV.

CCTV reach by figures

15 national channels

1/3 share of national audience (1st half 2010)

7 CCTV stations among the Top 10 Chinese TV channels (1st half 2010)

1,23 billion audience in 2009 (CSM)

The CCTV galaxy

1.CCTV-1 General
2.CCTV-2 Finance (formerly Economy & Life until August 24, 2009)
3.CCTV-3 Arts and Entertainment (literally Variety show)
4.CCTV-4 International (in Chinese)
5.CCTV-5 Sports
6.CCTV-6 Movie
7.CCTV-7 Military and Agriculture
8.CCTV-8 TV series
9.CCTV-9 Documentary (both in Chinese of Local and English of International)
10.CCTV-10 Science and Education
11.CCTV-11 Chinese Opera
12.CCTV-12 Society and Law
13.CCTV-13 News
14.CCTV-14 Children
15.CCTV-15 Music
16.CCTV-News International (in English; formerly CCTV-9)
17.CCTV-Français International (in French)
18.CCTV-Español International (in Spanish)
19.CCTV-العربية International (in Arabic)
20.CCTV-Русский International (in Russian)
21.CCTV-HD – High-definition

China National TV operator CCTV is increasingly challenged by provincial broadcasters as Hunan Satellite TV, Jiangsu Satellite TV, Zhejiang Satellite TV and Anhui Satellite TV, for content and ad revenues. These companies hold similar auctions during October and November to pre-sell their prime-time advertising during the coming year. Ad Ages announces that their own sales “is up well over 20% this year.” While they generate less media attention, international marketers closely watch the provincial auctions and invest much more in this bidding..

SOURCE: China Daily, AP, Ad Age (9/11/2010) 

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