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China's advertising expenditure in 2005 totaled 243.9 billion yuan (US$30.5 billion), 18 percent more than in 2004, but growth was the slowest in the last three years.

 

According to a report released yesterday by Beijing-based CTR Market Research, spending on advertising grew 39 percent in 2004 and 22 percent in 2003.

 

The slower growth in 2005 showed that advertisers are spending more rationally, Tian Tao, vice president of CTR, said at a press conference.

 

Enterprises no longer rely on advertisements as much as they did in the past, Chen Gang, a professor at the School of Journalism and Communications of Peking University, told China Daily.

 

"Enterprises nowadays tend to put part of their money into integrated marketing and other activities to promote their products," Chen said.

 

On top of that, other factors influenced advertisement spending in 2005, Chen added. The government's macro-control measures to cool down the overheated real estate sector, the ban on some medical advertising, and a slowdown in the automobile industry all contributed to slower growth, he said.

 

CTR, which researched TV, newspaper, magazine, radio and outdoor advertising, predicted that the industry would keep growing at a slow but stable pace.

 

Tian said the advertising market is expected to grow 15 percent this year, much higher than the predicted 4.4 percent growth for the global market.

 

Another finding was that newspapers are losing their share of ad revenue to other media.

 

Although it still dominates the market together with TV, newspaper advertising lost a 3 percent market share to radio, outdoor and new media last year. Advertising expenditure in newspapers declined by 1 percent in 2005.

 

CTR's report said the reason is newspapers' heavy reliance on major advertisers in the real estate, automobile and pharmaceutical industries, which adjusted their marketing communication strategies in response to regulatory policies.

 

With the top five advertisers in 2005 remaining almost the same as in 2004, credit cards (recording 80 percent growth) and imported alcoholic beverages (recording 156 percent growth) featured strongly last year.

 

Tian said: "This phenomenon leads us to believe that financial services and luxury goods advertising will be the driving forces this year."

 

(China Daily February 21, 2006)