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Advertising Budgets Rise

China's advertising expenditure rocketed in the first quarter, driven mainly by the increase of television and outdoor ad revenues, reported CVSC-TNS Research Co Ltd Wednesday.

From January to March, domestic ad revenue hit 60.95 billion yuan (US$7.34 billion), rising 44 percent year on year.

The television ad income reached 50.5 billion yuan, up 47 percent from the same period last year while the outdoor advertising proceeds expanded by 42 percent to 1.4 billion yuan.

"China's advertising industry has kept a healthy growing momentum," said Li Fangwu, an analyst with China Advertising Association. "The outdoor sector, typically, has been favored by more marketers as the form can penetrate people from different walks of life. In comparison, television has a relatively fixed audience."

He noted that advertisers from real estate, IT, retail and entertainment industries were currently the supporting force of outdoor advertising.

However, Dong Ji, the associate buying director with MindShare Shanghai, said the growth of outdoor advertising was partly from marketers who were not willing to spend so much money on television ads. MindShare is the media buying arm for Ogilvy & Mather Advertising Co Ltd and J. Walter Thompson/Bridge Advertising Co Ltd.

"To launch a television commercial is extremely expensive nowadays. The growth of television ad revenue was generated mainly by the rocketing charge hike," Dong said. "Although TV is the best platform to reach a large amount of people in the fastest way, the cost is too high for some advertisers."

In the first three months, China's average cost for television commercials rose 20 percent from a year ago. In some places such as Hunan Province, prime-time television advertising rate jumped 80 percent.

In Shanghai, a 30-second commercial broadcast on the News Channel of Shanghai Television Station between 6:00pm and 6:30pm, is priced at 25,000 yuan, rising 66 percent from last year's 15,000 yuan.

"The government's decision to curb television advertising during the prime time may partly explain the dramatic hike of airtime price, since the time-slot supply is shrinking," Dong added.

Starting January 1, no more than 15 percent of prime-time broadcasts, 18 minutes of the two-hour period, should be taken up by commercials.

(eastday.com April 29, 2004)

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