Advertising expenditures in China continued to grow last year, but the overall growth rate in traditional media slowed from previous years. Crunched by emerging media and the Olympic Games, industry insiders believe last year's slower expansion will not shadow this year's outlook.

CRI's Zhao Yang with the details.

Reporter:

As the world's third-largest advertising market after the U.S. and Japan, China's advertising spending in 2007 totaled 312 billion yuan, or 43 billion US dollars. The figure, which includes newspaper, magazine and television spending, represents a 9 percent increase over the year before.

CTR Market Research, the firm that released the data, considers the nine percent growth a historic slowdown compared to the torrent of growth in last three years, which sometimes surpassed 18 percent.

Tian Tao is vice president of CTR Market Research.

This is the first time the growth rate has dropped to single digits, and the first time the rate is lower than the GDP growth rate.
Tian Tao attributed the decline to various factors.

Three factors caused the slower growth last year. The first is that some companies reduced their 2007 advertising budgets to create a spending reserve for this year, to target the Olympic Games in August. The second is the government's tightened measures on commercials in the pharmaceutical and property industries. And the last reason, I believe, is the flourishing financial market, which has attracted enterprises to invest more capital in the market, instead of in advertising.

Despite the slower growth last year, CTR Market Research maintains promising outlook for China's advertising market in 2008. As marketers pour money into campaigns targeting the Beijing Olympics, CTR says total expenditures will grow by 13 percent.
In contrast with the performance of traditional media, advertising spending in new media experienced a robust growth last year, led by online advertising. In 2007, China's online advertisement spending grew by nearly 50 percent, to 11 .6 billion yuan.

Brigitte Lhomme from TNS Media Interlligence, a provider of advertising strategy, says the emerging field of new media is eclipsing the traditional market's share.

The money is shifting to the new media, as we have seen, and print media has suffered the most.

China has an Internet population of 220 million, a sizeable market for online advertisement. Lhomme predicts that, Besides the Olympic Games, the Internet will be the single largest force driving advertising growth in 2008.

ZY, CRI news.