CTR 'Media Momentum' Feb. 22, 2011

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Providing media analysis across all touchpoints (e.g. TV, print, radio, outdoor, cinema, internet, new media etc.)

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CTR 'Media Momentum' Feb. 22, 2011

  1. 1. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world TABLE OF CONTENTS [ Case Study ] CTR Reports China’s 2011 Advertising Expenditure Grew 13%……….…........2 [ Industry News ] The Internet Steals the Spotlight; Online Videos and Microblogs Become New Choices for New Year Galas and Greetings…….…………………………………….………..5 [ Industry News ] Tobacco Companies Eye Covetously at Advertisements Embedded in Films & TV Dramas………………………...……………………………………………………………..7 [ Ranking ] “Home Appliances Going to the Countryside” Policy Gains Momentum, Industry Advertisements Keep Growing ………………………………………………………………………...9 [ Ranking ] Chinese Financial Enterprises Needs to Improve Characteristic Features in Brand Marketing …………………………………………………………………………...………...….11 [ Media Glossary ] Media Plan, Share of Voice, Electronic Commerce and Junk E-mail …………………………………………………………………………………………………......14 第1页©2011 CTR Market Research www.ctrchina.cn
  2. 2. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world [ Case Study ] CTR Reports China’s 2011 Advertising Expenditure Grew 13% China’s total advertising expenditure in 2010 rose 13% from a year ago, according to the latest figures released by CTR Market Research. The growth rate meets the forecasted figure released by CTR in the first half of year. Although the increase of the consumer price inflation may post pressure on the country’s overall economic development in 2011, CTR is cautiously optimistic to forecast that 2011 China’s advertising market will continue to outpace the GDP growth at the rate of 15%. Ad Spending - Media Upon the promulgation of the regulation #61 of SARFT (State Administration of Radio, Film and Television), traditional media market has witnessed the "diversion" of advertising placement. TV advertising business has entered a reformation era. Its growth rate of 11% lagged behind that of all media for the first time, and its market share fell to 76%. However, thanks to the further optimization of advertising resources, TV advertising revenue has seen value-driven growth. Scarce resources are further sought after. Strong satellite TV stations see the enhanced advertising operational capacity. Radio media saw the largest growth in advertising among all media throughout the year, up 33% on a year-on-year basis. This not only benefited from the policy, but also from the expansion of resources. A growth of 19% in resources established radio as the media form with the greatest expansion of resources among all media. Similarly, in 2010 resources in print media including newspapers and magazines also expanded by 11% and 6% respectively on a year-on-year basis, while the revenue growth rate of newspapers and magazines reached the same level of 19%. Influenced by the comprehensive urban environment protection measures adopted across the country, resource volume of outdoor media significantly decreased in many cities. Echoing with the current trend of urban landscape environment transformation, new style, beautiful, high-end outdoor media has gained popularity so that the overall income from advertisement publication still increased by 16% on a year-on-year basis. 第2页©2011 CTR Market Research www.ctrchina.cn
  3. 3. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world Ad Spending - Industry Eight major industries have made important contributions to the growth in the advertising industry, of which the top three sectors are toiletries (3%), automobiles (2%) and beverages (1.9%). Automobiles industry became a sector with the fastest advertising growth for the first time, with a growth of 44%. Leisure (22%), campaign (23%) also saw rapid growth, which to some extent revealed the vital roles entertainment played on the advertising market in 2010. Health food industry, which had held the spotlight in previous years, saw significant decrease in advertising placement. This dragged the advertisement placement for the foodstuff industry so much that it recorded a negative growth over the years (down by 0.5%) , which makes the foodstuff industry rank among the top five industries with the largest decline in advertising placement for the first time. From the perspective of industries and media, business and service industries has replaced the real estate industry to become the major source of outdoor advertisements; automobiles industry became more dependent on advertising placement on radio media; advertising placement on magazines from the international luxury increased; leading players of household appliance retail, decoration material retail and real estate significantly increased their advertising placement on newspapers. 第3页©2011 CTR Market Research www.ctrchina.cn
  4. 4. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world Ad Spending - Advertiser LOreal replaced Unilever to become the second largest advertiser, and its multiple product lines have penetrated the domestic consumer market in the field of daily chemicals. In terms of media placement, LOreal launched fierce competition with the two traditional daily chemicals giants. In 2010, Wahaha Group, which went all out in fruit juice, tea drinks, milk drinks and other beverages, was crowned as the largest domestic advertiser in terms of advertising placement in replacement of Sixth Pharm Factory affiliated to Harbin Pharmaceutical Group. Since the implementation of the policy of "Home Appliances Going to the Countryside", advertising placement by domestic home appliance enterprises, nationwide home appliance chain stores and other relevant enterprises further increased with their sales channels expanding to the rural areas. Suning, Gome and other companies not only maintained their advertising exposure on the newspaper media, but also ranked among top 20 advertisers in terms of outdoor advertisement placement for the first time. Midea, a local home appliance leader, saw significantly higher ranking in advertisement placement on various satellite TV stations, and became the only representative of home appliance industry among the top 20 brands with the greatest input in advertisement placement on a yearly basis. 第4页©2011 CTR Market Research www.ctrchina.cn
  5. 5. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world Notes to editor: 1. Figures are in billions of US$ based on rate card without considering any kind of discount and free advertisement 2. Measured media in China covers TV, newspaper, magazine, radio, outdoor (including subway) 3. TV monitored period: 17:00-24:00 4. *Exchange rate: 1 US$ =6.58 RMB dated on Jan. 28, 2011 [ Industry News ] The Internet Steals the Spotlight; Online Videos and Microblogs Become New Choices for New Year Galas and Greetings New Year’s Eve used to be prime time for the traditional TV industry. This year, however, the TV industry is faced with challenges from online videos and microblogs – brand new competitors. On the last day of 2010, 16 Chinese TV stations spent nearly RMB 200 million vying for the prime time spot at the turn of the year. 第5页©2011 CTR Market Research www.ctrchina.cn
  6. 6. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world Besides major traditional TV stations’ spree of spending money (RMB 200 million) and engaging celebrities, a brand new player – the online video industry – has surfaced for New Year events. The numerous “New Year Galas” launched by major traditional TV stations have provided feasts for the eyes for audiences. But people who are interested in multiple galas worry about “attending one and missing out on another”. Online videos can solve the dilemma caused by major galas being held at the same time. Live webcasting of New Year Galas has become the choice for more and more netizens. Live webcasting for New Year Galas by 10 TV stations, including those of Hunan TV and Taiwan CTV, as well as for the Awarding Ceremony of Midi Music Festival, can be viewed simultaneously on tudou.com, as well as on other online video sites. The other advantage is that at all times and places during the live webcasting, people can publish their comments as well as communicate with other netizens, fully enjoying the interactive convenience brought by this new means. In fact, the ambitions of Internet enterprises are not limited to the “low level” live- and relay-webcasting of TV programs; they have started striving for a greater influence with the support of 400 million netizens. A reporter has learned recently that the “Online Spring Festival Gala”, which has been conceived and discussed for many years, is finally going to make its debut in the Year of the Rabbit. Major websites, including vodone.com and sina.com.cn, are mulling over their own “Online Spring Festival Galas”, even cntv.cn is going to take a share in this sector. In addition to the online video industry’s new approach to New Year festivities, the microblog medium, 2010’s most favored new online star, should not be overlooked. At the turn of the year, New Year greetings for relatives and friends are an important part in the process of biding farewell to the old and ushering in the new. Compared with traditional greeting modes, such as phone calls, text messages and e-mails, microblogging, which was “very geilivable” in 2010, has become a new “lead player” among the New Year greeting platforms. Within one minute before and after the turn of the year, the number of Tencent microblogs hit the threshold of 200,000; and calculated on the basis of 50 fans for each microblog, there was an audience of over 10 million. Industry insiders analyze that the traditional greeting mode among acquaintances is switching to an open-ended one, bringing brand new experiences to online and offline netizens. 第6页©2011 CTR Market Research www.ctrchina.cn
  7. 7. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world The general public’s entertainment on New Year’s Eve is changing from the mono TV mode to an interactive Internet mode integrating online videos and microblog greetings. In addition, the use of smart mobile phones has brought people a more mobile Internet experience, enabling interactions and communications at all times and places in a convenient and swift manner. There is still enormous potential in the development of microblogs, whose impact on the traditional communications industry is growing. (Hebei Daily, January 10, 2011) Tobacco Companies Eye Covetously at Advertisements Embedded in Films & TV Dramas As a contracting party of the WHO Framework Convention on Tobacco Control, two days ago China committed to the full prohibition of smoking in public areas. However, an investigation by the Tobacco Control Office of Chinese Center for Disease Control and Prevention shows that more than half of films shown in the Chinese mainland include tobacco smoking scenes; and 30 percent of Chinese smokers were influenced into smoking by their favored actors/actresses in TV dramas and films. It is easier said than done for films and TV dramas to control tobacco scenes. As a matter of fact, the “three orders and five injunctions” by the General Bureau of Radio, Film and Television have produced little effect. When will the “iron fist” of tobacco control come down? Tobacco Companies Eye Covetously at Advertisements Embedded in Films & TV Dramas The Huashang Newspaper reported that an investigation conducted last year by the Tobacco Control Office of Chinese Center for Disease Control and Prevention shows that more than half the films shown in the Chinese mainland include tobacco smoking scenes. The film “Mei Lan Fang”, directed by Chen Kaige, is dubbed as a “tobacco film”, for there are more than 15 minutes of smoking scenes in it, accounting for 12% of the total film time. According to the statistics of the China Association on Tobacco Control, the film “Feng Sheng”, “The Founding of a Republic” and “Women Don’t Cry 2” top respectively the lists of story films, historical films and Chinese TV dramas in terms of tobacco scenes. The report by the Tobacco Control Office shows that 1/3 of 第7页©2011 CTR Market Research www.ctrchina.cn
  8. 8. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world youngsters started smoking after watching smoking scenes in films. If their favored actors/actresses smoke, the possibility for non-smoking youngsters to start smoking is 16 times higher. Last year, the China Association on Tobacco Control wrote to the State Administration of Radio, Film and Television (SARFT), requesting for tobacco control in films and TV dramas. In addition, tobacco brands have tried to embed advertisements into films and TV dramas. According to Li Yang, a film director, there are tobacco lines and scenes in a film produced two years ago, because the tobacco company is one of the sponsors. Another film director from Xi’an told the reporter that, when he was making a film last year, a tobacco company wanted to become a sponsor on the condition of embedding tobacco advertisements into the film, but the deal was dropped due to disagreement in price. Film and TV Dramas Have Never Had Obstacles in Passing Censorship Because of Smoking Scenes The reporter, after browsing the website of SARFT, found that SARFT has circulated more than three notices on tobacco control. In SARFT’s Notice Concerning Reaffirming Film Examination Standards, “scenes excessively displaying excessive drinking, smoking and other bad habits”, alongside “intermittent salaciousness, sex and vulgar content” and “intermittent content such as murder, violence, terror, monsters, occultism, etc.”, are listed as key censorship criteria. SARFT also mentioned in the Notice on Strictly Controlling Smoking Scenes that in TV Dramas, smoking scenes are prohibited in areas designated by explicit state order and other non-smoking public areas; the so-called “artistic needs” for and “individualized expression” of smoking scenes shall be strictly controlled, and other forms shall be employed to render the characters’ psychology and ambient atmosphere. For imperative smoking scenes, the smoking durations shall be minimized. But according to the calculation conducted by a netizen on several TV dramas shown on the evening of January 8, 2011, there are two tobacco scenes in the TV Drama “Steel and Iron Era”, in which the series of offering a cigarette, lighting the cigarette and smoking the cigarette have become the way for leading characters to exchange their emotions. In the TV drama “Stories of the Republic of China”, there are even as many as 27 tobacco smoking scenes. The reporter has learned that none of the films or TV dramas have so far failed to pass the censorship of SARFT due to smoking scenes. (Guangzhou Daily, January 11, 2011) 第8页©2011 CTR Market Research www.ctrchina.cn
  9. 9. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world [ Ranking ] “Home Appliances Going to the Countryside” Policy Gains Momentum, Industry Advertisements Keep Growing The latest statistics from the Ministry of Commerce show that the “Home Appliances Going to the Countryside” policy has pulled sales of home appliances up to 77.18 million units in this category in 2010, registering a sales revenue of RMB 172.23 billion. The sales volume and revenue are 1.3 times and 1.7 times those in 2009, respectively. The statistics also show that refrigerators and color TVs topped the sales revenue list among all home appliances “going to the countryside” in 2010, registering RMB56.74 billion and 48.85 respectively and accounting for 61% of total home appliances sales revenue. The monitoring data of CTR Media Intelligence shows that the total advertising expenditure of the home appliance industry from January to November of 2010 increased 42% year on year. Hereinto, the year-on-year growth rates of TV & parts and refrigerators/refrigerating cabinets were 32% and 88% respectively, both leading the home appliances industry. By analyzing the total advertising expenditure in the first 11 months of 2010, we can see that the gap between air-conditioners and TV & parts, the No. 1 and No. 2 players in the home appliance industry, widened. The gap in terms of sales revenue between air-conditioners and TV & parts has enlarged from RMB 830 million in 2009 to RMB 1.31 billion in 2010. “Gree”, a brand focusing on highlighting its own core technologies and launching a brand new brand strategy, and “Midea”, a brand continuously developing high-end products, have both played a critical role in boosting the advertising expenditure of the air-conditioner sector. 第9页©2011 CTR Market Research www.ctrchina.cn
  10. 10. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world With the progress of the “Home Appliances Going to the Countryside” initiative, the advertising of the home appliance industry has penetrated into second- and third-tier markets. Compared with the same period in 2009, from January to November in 2010, the rankings of cities such as Hefei and Zhengzhou in terms of home appliances advertising have witnessed conspicuous improvement, nudging Beijing down to No. 10 on the list. In the Top 20 list of brand advertising spend, Chinese enterprises account for over half of the niches, thanks to policy supports and geological advantages. Among the top 20 brands, only 7 are international brands such as Sharp, Sony and Siemens; the rest are all Chinese brands, with Midea, Gree and Haier ranking in the top three positions. The total advertising expenditure of these three brands accounts for over one third of total advertising expenditure in the home appliances industry. 第 10 页©2011 CTR Market Research www.ctrchina.cn
  11. 11. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world Chinese Financial Enterprises Needs to Improve Characteristic Features in Brand Marketing With the Agricultural Bank of China being listed in Shanghai and Hong Kong stock exchanges in 2010 and four other major Chinese state-owned banks finalizing this process, China’s banking sector and financial system have formally integrated with the market economy. Chinese banks have started a new round of competition against foreign banks in respect to overall image and developing financial product brands. Since the opening of the Chinese financial market to foreign banks in 2006, the previously unchallenged positions in the banking sector began to see more competition, and the awareness of brand marketing began to take initial shape. Some banks even teamed up to advertise on CCTV, and their advertising expenditure on corporate image began to rise. However, the brand building of Chinese financial enterprises is still in the “recognition” phase: banks are adopting homogeneous brand marketing strategies, lacking in characteristic features that are distinctive from other brands. According to CTR Media Intelligence’s monitoring data, the advertising expenditure of the financial 第 11 页©2011 CTR Market Research www.ctrchina.cn
  12. 12. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world industry entered a “low growth” phase in 2010, compared with previous years. The ratio of TV advertising expenditure in the overall advertising budget has witnessed an obvious decline in 2010, and the ratios of advertising expenditure for newspapers and radios are rising. As a result, the distribution of media advertising has become more diversified. 第 12 页©2011 CTR Market Research www.ctrchina.cn
  13. 13. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world In 2010, China’s Ping An Insurance become a new force in the advertising expenditure market; its 106% year on year adspend growth dwarfed all bank brands, ranking No. 1 in the annual advertising expenditure list for the financial industry, 6 places higher than that in 2009. The “Ping An Motor Car Insurance Taken by Phone” has targeted all car owners; and the large-scale radio advertising strategy in major cities, which is voiced by Ge You, a famous Chinese actor, has created a brand “cluster” effect. The Hong Kong and Shanghai Banking Corporation (HSBC), a representative of foreign banks, entered for the first time into the Top 20 list for the financial industry in terms of advertising expenditure, which means foreign banks are to compete with Chinese banks in brand marketing, bringing new changes to marketing strategy and advertising intensity. 第 13 页©2011 CTR Market Research www.ctrchina.cn
  14. 14. NO.1 issue, published on February 23,2011 Maximizing momentum in a multi-media world [ Media Glossary ] Media Plan A series of decisions, including communicating promotional information to potential buyers or the users of certain products and/or brands. A Media plan is also a decision making process and as planning progresses; each decision may be changed or even abandoned. A media plan is the guidance for choosing media, which requires the development of specific media goals, as well as the design of specific media strategies to achieve these goals. Share of Voice Refers to a brand’s or group of brands’ advertising weight expressed as a percentage of a defined total market or market segment. Electronic Commerce Refers to all kinds of commercial activities over the Internet and based on browsers/server applications. The buyers and sellers are not face to face during the transactions. It is a new business operating mode through which consumers’ online shopping, online transactions between businesses and online electronic payments, as well as various commercial activities, transactions, financial activities and relevant comprehensive activities, are conducted. Junk E-mail So far, there is not a strict definition for it. Generally speaking, any e-mail that is sent to user’s mailbox without the user’s permission can be called a junk e-mail. 第 14 页©2011 CTR Market Research www.ctrchina.cn

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