Although China Central Television's auction of prime-time advertising slots yielded a result that was better than expected, some industry experts remained cautious about overall advertisement spending in the country next year.
Every year on November 18 at 8.18am, CCTV, the dominant television station on the mainland, holds an auction for prime-time advertising slots on its channels for the next year. This event auctions off about 15 per cent of the country's total television advertising spending and sets the tone for industry growth in the coming year.
This year, after 14 hours of bidding, CCTV collected 9.26 billion yuan (HK$10.5 billion) for prime-time advertisements next year, up 15.4 per cent from a year earlier.
'This is at the high end of industry expectations of 10 to 15 per cent,' said Dick Wei, an analyst at JP Morgan.
CCTV bucked the trend of the three prior Olympic host nations - Greece (2004), Australia (2000) and the United States (1996) - all of which saw advertising sales growth fall in the year after the Games, said Morgan Stanley executive director Richard Ji.
'The sales growth mostly came from advertising price increases, implying the pricing power of suppliers of scarce media. One-third of the auction bidders were first-timers, signalling stronger than expected advertising demand in China,' he said.
Even financials and insurance, sectors hard hit during the current crisis, bought significantly more ad time. Sectors related to domestic consumption, such as food and beverage, cosmetics and health care, remained robust in auction volume.
