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Consumer Demand Driving Top Ad Spend in China

ACNielsen Study Shows Strong Consumer Demand Driving Top Ad Spend in China During 2001
Local FMCG brands, advertisers and outdoor post strong growth in 2001

Hong Kong, 6 March: China, Asia’s largest consumer market, defied any effects of a global recession by posting stronger-than-expected advertising spending in 2001, according to annual advertising expenditure figures for the Asia Pacific region released today by ACNielsen Media International.

China once again attracted the highest advertising spend in the region -- USD11.2 billion -- up 16% from 2000, while Indonesia marked its first year of political and economic stability and a return of consumer confidence with a 28% increase in ad spending.

The Philippines also posted double-digit growth for 2001, with a 14% increase over 2000. Growth in all leading Asia Pacific advertising markets was driven by increased spending from the fast moving consumer goods (FMCG) sector.

The global slowdown took its toll on other markets in Asia Pacific, however, with 2001 proving a particularly tough year for Australia and Taiwan, which posted negative growth rates of -11% and -8%, respectively. Factors contributing to the downturn included Australia’s return to previous ad spend levels following the Olympic boom of 2000, and Taiwan’s unstable political situation, which impacted consumer confidence.

“Asia Pacific markets less dependent on the U.S. economy managed to sustain strong advertising expenditure growth rates in 2001. For the first time, we saw local FMCG brands and advertisers playing a prominent role in several key markets such as Indonesia and the Philippines, while in China, local advertisers continued their domination,” said Forrest Didier, managing director, ACNielsen Media International - Asia Pacific.

Korea and Singapore ended 2001 with minor negative growth rates for ad spending while Thailand and New Zealand posted minimal growth of less than 4%. Malaysia and Hong Kong managed moderate growth of 5% and 8%, respectively.

ACNielsen Media International measures advertising expenditure throughout the region based on published rate cards. Actual ad spend and market sizes may differ because the advertising industry offers discounted rates that are not disclosed.

“While many markets suffered sharp advertising cutbacks in 2001, a number of signs point to an economic recovery and a return to pre-recession ad spending levels by the end of 2002,” said Didier.

This recovery in ad spend will be spurred by several world sports events taking place in the region this year, including Asia’s hosting – for the first time - of the Football World Cup in Japan and Korea, as well as the international cricket series in India and the America’s Cup in New Zealand.

In 2001, print media, especially newspapers, suffered sharp decreases in many Asia Pacific markets, while the trend toward using more outdoor advertising and other less-traditional advertising media increased.

“The weakening economy forced advertisers to seek alternative and less expensive forms of advertising last year and the trend toward increased outdoor advertising is expected to continue in 2002,” Didier said. “In particular, we are seeing a trend toward more advertising on public transport in urban centres – most notably in Hong Kong and Thailand.”

China, the region’s robust economic engine, continued to sustain the highest GDP and adspend in Asia Pacific – its thriving consumer demand matching the nation’s optimism following its winning bid for the 2008 Olympics and entry into the WTO. Tonics and over-the-counter pharmaceuticals again dominated the top advertising categories, accounting for eight out of the top ten most advertised products.

China’s booming ad market also influenced advertising in Hong Kong. “For the first time, mainland Chinese products appeared in Hong Kong’s top ten most- advertised products, reflecting strong local appetite for health and pharmaceutical products from the mainland", commented Didier.

Pharmaceuticals from China were among Hong Kong’s most popular products in 2001, with an assortment of top-selling products ranging from brain pills to slimming powders.

Deregulation of the media industry in Thailand and Indonesia positively impacted ad spending, with a proliferation of new magazine and newspaper launches, as well as new television stations, providing more outlets for advertising.

The 9/11 attacks in the U.S. did not appear to impact ad spend in the region during the last quarter of 2001, with the exception of Hong Kong, where travel agencies and airlines increased their ad spending in a concerted effort to lure travellers into overseas travel over the Christmas period.

Telecommunications remained one of region’s leading adspend categories, particularly in Korea, Thailand, Philippines and Singapore.

ACNielsen Media International is the world leader in international media research and analysis. The company is active in 40 markets, offering television and radio audience measurement, advertising information services, print readership and customised media research services.

ACNielsen Media International is part of the VNU Media Measurement & Information Group, the global leader in information services for the media and entertainment industries. Active in more than 40 major markets worldwide, and powered by leading-edge technology and specialised expertise, the Group serves the information and marketing needs of the television and radio industries, advertisers, agencies, media planners, music companies, publishers, motion-picture studios, distributors and exhibitors, and the Internet industry. The Media Measurement & Information Group is part of VNU, one of the world’s leading media and information companies. VNU employs more than 35,000 people and has annual revenues of approximately EUR 4 billion.

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