China’s total advertising expenditure in the first three quarters of 2010 rose 14% from a year ago, reaching a record-breaking US$ 64.53 billion, according to the latest figures released by CTR Market Research, the leading market information and insight provider in China. This growth rate slowed down from 17% recorded in the first half of 2010, which was higher than expected. Based on the overall advertising sector performance driven by macro economic data, CTR remains its forecast of China advertising market annual growth rate at 14% for 2010.

The significant restructure of the TV market led by programming revisions and integrations has given TV media a rise of 12%, a growth still lagging behind the whole media. Within the TV media category, the provincial satellite TV channels were the main change makers whose substantial growth in the third quarter was the key factor contributing to the increased proportion of the satellite segment in the whole TV advertising market.

Radio stations being the biggest winner in Q3, benefiting from the macro-policies led the competitors by 33% in growth and secured a YOY increase by 19% in its resource.

Newspapers, magazines and outdoor media maintained a fast growth by 19% each, in which the print media continued the efforts of expanding capacity for higher revenue, and as a result, the two media’s ad resource has increased by 12% and 7% respectively by adding more capacity to their original resource base. However, the outdoor sector, which is struggling in a seller’s market because of resource scarcity like the TV, has seen a resource reduction by 5% during the first three quarters. More tightened control on outdoor advertising will be likely to happen in Guangzhou, the host city of the 16^th Asian Games.

Affected by the sharp shrinkage of health food placements (especially on TVs) the food industry as a whole suffered from a rarely seen negative growth in advertising volume in the first three quarters, and fell into the TOP 5 declining industries for the first time. The continuous strict control policies on the real estate market have again kept down the real estate placements rising from its early recovery and reduced its percentage in total newspaper placements from 30% of 2008 to 24% of this year. In addition, the household chemicals and FMCG industries are beefing up their placements under the macro-policies of “stimulating living consumption”, with their number of entries into the radio and outdoor TOP10 being likely to increase. Taking an overview of the advertising market we can see that the home appliance industry has become the No.1 advertiser in terms of placement growth, which is followed by home supplies (No.2) and the transportation sector (No.3) which is enjoying considerable policy support.

The first three quarters of 2010 P&G become the biggest advertiser on CCTV, while Unilever focused on three major provincial satellite TV stations (Hunan, Jiangsu and Anhui). Besides, with a advertising volume nearly double against L’Oreal, the No.2 player, P&G has demonstrated its market dominance as well as the top position of its OLAY brand over the competitors. Generally, most of the TOP20 advertisers in the first three quarters were from FMCG manufacturers, which are believed to be the outgrowth of the “stimulating living consumption” policy.

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4. *Exchange rate: 1 RMB=0.15 US$ dated on Nov. 10, 2010