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Ad market second largest in Asia
2002/02/28

Beijing - China's rapidly growing advertising agency increased revenue by 15.8 percent last year according to reports by AC Nielsen Media International as stated by the Shanghai Daily on Wednesday.Chinese advertisers spend US$11.2 billion last year, second in place to Japan in Asian ad revenue, the paper said.

The industry is likely to grow because of the nation's entry to the World Trade Organization (WTO) and Beijing's successful bid to host the 2008 Olympics.

"The good news for the market in general is that China's entry into the WTO will attract lots of foreign companies to invest in China, which in turn will bring substantial spending on ads," said Forrest Didier, managing director of AC Nielsen's Asian Pacific Branch.

The drop of import taxes is likely to increase the sales of foreign products in China and might likewise enhance the usage of marketing tools.

"Thriving consumer demand matching the nation's optimism following its winning bid for the 2008 Olympics will continue to sustain high ad spending in the Asia-Pacific region," Didier said.

Previous ad revenue from Olympics amounted to US5$ billion, the paper wrote.

Last year proved to be historical highs for media concerns in ad revenue. Television ads totaled US$ 8.1 billion, newspapers received US$2.9 billion in ads and magazines reached the US$0.2 billion. The most heavily advertised products were tonics, over the counter drugs and residential property projects, the paper said.

The Chinese market became even more attractive to advertisers with its rapid economic growth at a time when most other regional countries are facing recession," said media planner and buyer Chris Walton, chief executive officer of Mindshare's China Branch.

"China's ad industry is still not very well developed, which means that investment at the moment may enjoy high rewards.
Walters said cars, banking, insurance and some luxury brands, driven by tariff cuts following China's WTO entry will be the next big spenders in the advertising market in China.

The State Administration of Industry and Commerce (SAIC) is predicting the industry will keep on growing in double digits for the next few years. However, it warned new government policies that restrictive advertising of prescription drugs, China's biggest advertisers, will hurt the sector.

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