Group M: China TV Ad Spend to Pop 16% in 2010 - Broadcasting & Cable

Group M: China TV Ad Spend to Pop 16% in 2010

Rising consumer income to push total to $28 billion
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GroupM is
predicting that rising consumer income, soaring retail sales and hefty economic
growth will boost total advertising in China to $44.9 billion in 2010 and that
the TV ad spend hit $28 billion this year, a 16% jump for both the total and TV
ad revenues.

"Retail
sales grew by 15% in 2009, double the rate of nominal GDP," said GroupM Futures
Director Adam Smith in a statement. "Advertising serves this rising urban
consumer and increasingly the rural consumer as well. Advertising investment
could well run ahead of GDP for years to come."

The rising
consumer spending that is powering the ad growth is good news for domestic
Chinese media companies, who have been able to significantly increase the
prices for relatively scarce airtime, and ad agencies and consumer goods
manufacturers doing business in China. But it will have a lesser impact on U.S.
television and entertainment companies attempting to do business in China,
which still imposes heavy restrictions on the distribution of foreign content.
Most U.S. programmers have struggled to get their content into China and some,
such as News Corp., have sold stakes that they owned in Chinese channels during
the last decade because of severe government restrictions on the delivery of
foreign channels into the market.

PricewaterhouseCoopers
has estimated that there will be about 115 million broadband subscribers in
China by the end of this year and GroupM also sees rapid growth in Internet
advertising, which will grow from $3 billion in 2009 to $4 billion in 2010.

The GroupM
projections for growth are slightly higher but generally in line with those
issued in recent months from Zenith and MAGNAGLOBAL.

In June,
MAGNA issued revised worldwide advertising forecasts that predicted Chinese TV
advertising would rise by 12.7% in 2010 and that Chinese TV would see a 14.9%
pop in 2011.

In July,
Zenith projected a 12% increase in total advertising and 16% growth in TV
advertising for 2010 in China. Zenith is forecasting a 9% increase for TV
advertising in 2011 and 7% increase for 2012.

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