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China Media Spend Up
2009. 14 September
by Noreen O'Leary
(adweek.com)
Economic recovery drives advertising growth overseas foothold for future operations hub
Reflecting the
improving outlook for China's economy, GroupM is revising upward
its forecasts for 2009 and 2010 media spending in the country.
Last week, the WPP Group media company said it estimates ad
spending, led by the Internet, will increase 5.8 percent in 2009 to
$37.3 billion and by 9.8 percent to $41 billion in 2010, when China
hosts the World Expo in Shanghai and the Asian Games in Guangzhou.
In June, GroupM had predicted an increase of 3.2 percent in 2009
and 8.9 percent next year. Last year, as Beijing hosted the Olympic
Summer Games, China enjoyed a 23 percent jump in media
spending.
GroupM forecasts that China will overtake Japan as the world's
second-largest ad market in 2011, with measured media spending in
the country expected to reach $47 billion compared to Japan's
projected $40 billion. The U.S., the industry's No. 1 market, is
forecast to be a $150 billion market in 2011.
GroupM's revision coincided with signs that suggest China's
economic recovery is well under way as the government released data
a week ago showing rises in industrial output and money supply.
After China's pessimistic outlook at the start of this year amid
the world economic crisis, there are new indications consumer
confidence is returning: In August, passenger car sales in China
jumped 90 percent over the year-earlier period, while sales in the
furniture and construction materials industry rose 42 percent and
37 percent, respectively.
Economists, including those from the World Bank and Goldman Sachs,
recently lifted previous forecasts for Chinese real GDP growth by
about 1.5 percentage points, with a consensus forecast of about 8
percent this year, before the country returns to double-digit
growth in 2010.
Lucy Zhang, futures director, GroupM Knowledge, China, cited that
improvement in the broader economy and marketers' growing
confidence in the recovery for GroupM's revisions.
"Advertisers from the food and beverage, industrial, business,
retail, electronic appliance and cosmetic categories have increased
their TV and print media investment in the first half of 2009,
compared to the same period last year," she said. "Advertisers from
clothing, cosmetic and toiletries, education and retail categories
have increased their online ad spending in the first half of
2009."
In addition, she cited the high growth potential for digital media
in a country that currently has an estimated 338 million Internet
users, easily topping the U.S. as the world's largest Internet
market. GroupM estimates the number of online homes in China is
growing by nearly 88 million every 12 months, adding the equivalent
of a country the size of Germany.
"The rising online population, deeper engagement of the Chinese
netizen on the Internet and more choice in online ad formats have
all helped online become the fastest-growing advertising medium in
China," said Zhang.
Source: www.adweek.com