• R3 study covering sixteen leading marketers and agencies
• Average inflation level across all media forecast at 17%
• Provincial Satellite TV most affected
• Digital costs up 16% in first half
According to R3’s latest survey of top marketers and media agencies, there seems to be no relief for China’s marketers for the second half of 2012 – with high media inflation of 15% – 20% needing to be factored into their marketing budgets.
Despite slow growth across the global economy and even a relative slowdown in China’s own GDP growth a number of drivers are combining to keep driving up media prices; Demand for advertising especially top quality media inventory shows no sign of slowing down. China still has a low ad spend to GDP ratio vs more developed markets so strong marketer demand will continue for the foreseeable future. Government restrictions especially on TV airtime are continuing to bite with inflation forecasts at around 20% year on year. Provincial Satellite is the hardest hit sector where soft entertainment shows have been especially affected by airtime restrictions.
All forms of Digital media opportunities face strong advertiser demand increasing 16% in the first half year and another 15% in the second half year.
But it’s not all bad news – media price rises are encouraging advertisers and switched on media agencies to explore new opportunities with a rapid rise in online video, sponsorship and in- programme content, increase in radio use and smarter sales policies from some media vendors.
This group of marketers and agencies still see overall 2012 growth in the media sector – fuelled by a 57% growth in digital “Marketers are using digital as a test medium in 2012, trying a potent mix of Weibo, display, e-commerce and owned media to experiment with the right mix” said Greg Paull, Principal of R3.
“This is positive for digital media and their agencies , but the jury is still out on whether it will continue with this much diversity – there’s going to have to be winners and losers in this space” he added This is the latest update in our regular reports on media inflation in China. In compiling this report R3 consulted 16 leading marketers and media agencies – making this the largest most objective study in the marketplace.
R3 is a global marketing consultancy with our heart in Asia. We focus on improving the effectiveness and efficiency of marketers and their agencies.
Founded in 2002, we work with eight of the world’s top twenty global marketers, including Coca-Cola, VISA, JNJ, Nestle, McDonald’s, Samsung and SingTel.
Our work includes consulting to find , pay and keep the best agencies. We also analyze and audit media spends and provide consultancy on marketing ROI.
For more information , visit www.rthree.com, write to [email protected] or call +8621 5111 9181