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24 Aug 2008
Beijing
As the host nation for the Olympic Games, a country can expect to enjoy a record year of advertising, and China in 2008 has been no exception.
According to the latest Advertising Information Services report from Nielsen, China registered a 17 percent increase in advertising compared to the same period in 2007, reaching a total of RMB244.9 billion in the first half (Jan-Jun) of 2008. Of the three (3) major forms of media measured, television (RMB204 billion) continues to attract the lion’s share, taking a 83 percent share of the advertising pie. Newspapers and Magazines registered an increase of 14 percent, reaching RMB 36 billion and RMB 5 billion respectively. (Table 1)
Among the top 10 categories in the first half of 2008 were Medication and Tonic (RMB 36 billion), Health and Social (RMB16.5 billion) and Female Skin Care (RMB 12.6 billion).
At a brand level, P&G’s Olay continues to lead the race, with a RMB3.4 billion advertising budget. Among the top 10 spenders was Olympic sponsor China Mobile, spending RMB 2,062 million on advertising in the first half of 2008.
While not an Olympic sponsor, fast food brand KFC remains committed to its advertising, spending RMB2,048 million and making it into the top 10 spenders list, in the hope of competing with other Olympic sponsors in its category, or specifically, its rival McDonald’s. In fact, KFC’s aggressive advertising effort was in major contrast to McDonald’s, which only spent RMB839 million in the first six months of 2008.
Olympic Sponsors spending Year-to-date
By the close of June, Nielsen recorded a total spending of RMB 11.8 billion by 28 of the Olympic sponsors, representing a 12 percent year on year increase and accounting for five percent of the entire market spend.
“Advertisers have now returned to expected advertising levels following a lull in May as a consequence of the Sichuan earthquake,” said Richard Basil Jones, Managing Director, Nielsen Media Research, The Nielsen Company, Asia Pacific. “Obviously Olympic sponsors have been more aggressive in their advertising strategy in the lead up to the Games, which has fleshed out to RMB 6.6 billion in just the second quarter, a significant 28 percent increase from the first quarter.”
While China Mobile topped the list among the 28 Olympic sponsors in terms of advertising, the dairy brand Yili (RMB 1,257 million) and fast food brand McDonald’s (RMB844 million) followed at a very distant second and third. (Table 2)
Other Olympic sponsors who notched up their advertising this year were Air China (+372%), UPS (175%), Sohu.com (145%), Bank of China (133%) and Lenovo (112%) - with home-grown Chinese brands accounting for four of the five top growth brands.
Advertising strategy of Olympic sponsors and their rivals in the lead up to the Games
Olympic sponsors are expected to lead the charge in advertising during the Games year, however an analysis of spending patterns to-date suggests that it is far from being a simple battle of numbers. And the reaction of competition suggests a diverse number of advertising strategies.
A classic example is in the sports apparel category. In 2007 Adidas and Nike appeared to go their own way on strategy where Nike was spending in regular waves with Adidas perhaps saving its spend for the Olympics year. As the brands entered into 2008, it has all changed however, with trends showing the two rivals almost mirroring each other month by month. (Table 3)
In the month of June, Nike upped the stakes with RMB223 million in spending, compared to Adidas’ highest monthly spend of RMB159 million in March.
“An added complication in the sports category is local player and non sponsor Li Ning, which according to earlier Nielsen research enjoyed 29 percent consumer recognition as an Olympic sponsor, not far behind 35 percent recognition for actual sponsor Adidas,” observed Basil Jones. “Nielsen’s AIS information indicates that Li Ning has avoided going head to head with the global players in ad spending (RMB23 million in June) but rather relies on gaining association through spokesperson arrangement with various athletes and other means.”
In a similar vein to Nike, Pepsi has also been taking the fight to Coca-Cola, with RMB225 million in advertising in the month of June compared to RMB160 million for the Coca-Cola brand. The figure outstrips any amount spent previously by Pepsi over the past 18 months. While it appears that Pepsi is getting its name out while it can, Coca-Cola is expected to go all out to maximize its sponsorship investment in August.
Meanwhile all three beer sponsors have increased their advertising since April, with Yanjing in particular increasing its spend to previously unseen levels. The brand has taken additional steps to be seen as the beer brand of choice for the masses by dressing out neighborhood monitors in red and white Yanjing branded polo shirts.
While coming off a relatively low base, UPS has also dramatically increased spend in June, with the monthly spend of RMB105 million easily outstripping the RMB60 million peak seen in July last year. Likewise watch brand Omega has also more than tripled its spending from RMB11 million in May to RMB39 million in June.
All advertising spending is reported based on published rate card. Spending covers adspend in TV, Newspapers and Magazines only.
About The Nielsen Company
The Nielsen Company is a global information and media company with leading market positions in marketing information (ACNielsen), media information (Nielsen Media Research), online intelligence (NetRatings and BuzzMetrics), mobile measurement (Nielsen Mobile), trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit, www.nielsen.com
Table 1
Table 2
Advertising Spending January – June 2008
Brand Level – Selected Olympic Sponsors and Competitors
Table 3
Advertising Spending January 2007 - June 2008 Trend
Adidas vs Nike
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