Chinese advertising to surge 20% in 2007: forecast

No more giant Mao posters, it’s all billboards and neon signs now.
According to figures from CTR Market Research (CTR), total advertising spending in China amounted to $36.9 billion in 2006, representing annual growth of 18%, and the firm estimates that total Chinese ad spending will grow another 20% in 2007.

Previously, CTR figures showed that ad spending in mainland China grew 18% in 2005, 22% in 2004 and 39% in 2003, so although growth is leveling off, the market remains robust.

“We’re optimistic about the China advertising market in the next two years leading up to the 2008 Beijing Olympics,” said Tian Tao of CTR, “and we expect the share of the top 100 advertisers will contribute to the double digit growth.”

According to TNS Media Intelligence, China is now tied with the UK as the world’s third-largest ad market, after the US and Japan.

In 2006, the US advertising market grew by 3.8%, while Japan and UK experienced negative growth of -0.2% and -1.8%, respectively.

CTR numbers show that the beverage and financial, investment and banking services sectors drove overall market growth, with ad spending increases of 48% and 33%, respectively, in 2006.

The spending increases were across the traditional media board, with radio having the highest growth rate, at 24%. Television ad spending was close behind, at 18%. Magazines were up 10%, and out-of-home and newspapers were up 9% and 4%, respectively.

Still, overall Chinese advertising spending in 2006 accounted for only 1.4% of GDP, vs. 3% in the US, indicating that China’s advertising market still has room to grow.

For more information on this huge market, read eMarketer’s China Online report.