Chinese Advertisers Face Rate Hikes: Media Costs Skyrocket At TV Stations, Newspapers By Suzanne Mia

HONG KONG - The huge demand for media space is creating a classic sellers market in China, with advertisers faci

While it is not unusual for key Chinese media to issue more than one rate card reflecting double-digit percentage increases over a 12-month period, new and substantial loadings requested by TV stations and newspapers to guarantee quality placement are effectively resulting in even higher costs.
‘What we’ve seen in China is that rates are firming up. Overall ad spending is up by more than 60%, but there has been no corresponding growth in media outlets – so it’s a sellers’ market,’ said JWT China managing director Ron Cromie.
According to figures supplied by J. Walter Thompson China, China’s dominant television station, China Central TV, is increasing its rates from 16,900 renminbi (RMB) to 35,200 RMB (or U.S. $6,175) in 1993, a jump of 108% for a 30-second primetime slot. This will ultimately shoot to an inflation rate of 120% once loading is included. Similar increases will affect advertisers on Beijing TV and Shanghai TV, which are showing increases of 100% in ad rates. This compares with rate card inflation rates in newspapers from as low as 20% to as high as 100%.
The rate increases do have an upside, however. ‘Increasing revenues do have some positive implications for both the stations and advertisers, from improved programming to the likelihood of more competition – as will be the case when Shanghai Oriental TV launches in early 1993,’ said Saatchi & Saatchi media director Kevin Clarke.
Suzanne Miao is news editor of Media magazine, Hong Kong.
Copyright Adweek L.P. (1993)