Media rates to surge in China (Warc)

10 September 2012 20 h 07 min Comments Off

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Media rates are expected to increase by almost 20% in China this year, leading many marketers to experiment with more affordable digital channels, a study has predicted.

R3, the consultancy, polled 16 senior client-side and agency executives, who predicted, on average, that the cost of buying advertising would surge by 17% in 2012.

. Television logged the highest increase on this measure in the first half of 2012, with rates rising by 21% overall, due to intense competition, and tighter restrictions on the length and frequency of breaks and spots.

. Radio claimed second place here, as broadcasters boosted prices by 21%. Online followed next on 16%, and the industry panel expected a further increase of 15% for the remainder of the year.

. Mobile experienced a smaller 8% expansion in H1, reflecting the market’s relatively nascent stage of development, during which inventory often grows at a faster pace than demand.

Turning to print, newspapers registered a 10% rise for the opening six months of the year, and magazines recorded a 6% improvement.

Despite this, most channels still witnessed substantial evidence of discounting. Digital ratecard prices, for example, rose by 26% in the first half of 2012, and ten percentage points above the net figure.

Similarly, while the mobile ad ratecard saw a 25% increase, this was more than three times the net increase of 8%. These totals stood at 17% and 6% for magazines.

But both radio and television saw ratecard charges climb by 22%, a single point ahead of the actual improvement. Newspapers were the most robust medium on this metric, as the 10% inflation in ratecard prices exactly matched the actual increase.

When assessing their media spending as a whole, respondents predicted digital budgets would rise by 59%, compared with a 23% lift for radio and a 19% increase for outdoor.

Television was pegged to enjoy a 14% leap, ahead of magazines on 11% and newspapers on 8%. Greg Paull, the principal of R3, argued higher traditional media costs were encouraging a shift in strategies.

“Marketers are using digital as a test medium in 2012, trying a potent mix of Weibo, display, e-commerce and owned media to experiment with the right mix” he said. “This is positive for digital media and their agencies , but the jury is still out on whether it will continue with this much diversity – there’s going to have to be winners and losers in this space.”

Data sourced from R3; additional content by Warc staff

Source: Warc (10/09/12)

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