Although media buying principles and processes are universal Globally, the local media structure and media buying dynamics in China are uniquely complex, presenting significant value measurement and transparency challenges for advertisers.
Hyper Inflationary Media Costs
These inflationary trends are driven by factors quite unique to China :
- - High Annual GDP growth ( 8%+ per annum )
- - Government TV Regulatory Policies such as SARFT 61, reinforcing Prime Time minutage constraints impacting on available supply compared to previous years
- - TV airtime sales monopolization policies in key markets
- - Multiple Online Rate Card increases per annum by main Portals
- - Online daily rate trading practices rather than audience delivery guarantees
- - Strong advertiser demand for media inventory outstripping supply
Annual media rate card cost inflation increases have averaged at +16% PA since 2002, the highest of the major global markets; in some TV markets CPRP inflation has increase by 100% + in just 2 years, pushing up prices to levels where ROI needs to be carefully quantified, not just within China but also relative to other countries.
Advertiser Challenge : The increase in China media costs is significantly impacting on Advertiser marketing ROI, under pressure to drive top line sales growth and enhance profit margins, in a hyper media media cost inflationary environment. The need to control net media cost inflation and drive quantifiable buying value efficiencies is critical component of long term marketing success in China.