China, DRTV Advertising and the CCTV Auction
DECEMBER 6, 2006 (Los Angeles, CA) - The annual ad auction by China Central Television (CCTV) was held in Beijing over the weekend. Treated by many as a barometer of where the Chinese economy is heading, the 13 hour auction for 2007 airtime outperformed the previous year by 15.8 %. Advertising revenue for next year reached 6.8 billion yuan ($860 million), with heavyweights such as P&G China spending up to 420 million yuan ($53.2 million).
CCTV has a major impact on the price of television advertising. CCTV owns 15 nationwide channels, which together reach about 95% of China's 1.3 billion population. It competes with other broadcast, cable and satellite channels and boasts about a one third market share for audience and advertising revenue. While the auction was really about prime time media, the implications for DRTV marketers and remnant inventory are obvious. A hot advertising market leads to higher advertising rates, less avails and more competition.
High-priced media can become especially worrisome to DRTV marketers when consumer sentiment wanes. If people are not buying expensive items, expensive media simply does not pencil out. In China, as elsewhere, this leads to a weeding out of smaller, undercapitalized marketers. The only way to overcome this kind of challenge is to use free trial and multi-pay offers, which soften the blow of higher ticket items; use continuity or replenishment programs to increase the value of each sale; change the media mix to include multiple channels, such as the Internet, mobile devices, radio and/or print; and implement processes and systems to control costs.
At the end of the day, the CCTV auction has a positive impact on DRTV as it forces the players to become smarter and more efficient. If you are looking to increase your odds in China, Telebao can help. Telebao provides consulting, systems and managed services to companies seeking to enter the China DRTV market. The firm specializes in creating "overnight" brand awareness by marketing "As Seen on TV" products across multiple electronic and brick-and-mortar channels.
Contact us today to learn more about multi-channel DRTV marketing and how Telebao can help you.