Auction a sign of confidence in China's business next year
China’s state broadcaster CCTV chalked up a muscular 18.5% rise in bids in its annual auction for advertising slots, underlining how the world’s third largest economy continues to simmer while the rest of the world remains mired in the global downturn.Chinese companies bid 11 billion yuan ($1.6 billion) during the 13 hours of this week’s auction, CCTV reported, compared with $1.36 billion last year. “The auction is a sign of entrepreneurs’ confidence in next year’s business in the country. They are optimistic,” said Xia Hongbo, director of CCTV’s advertising department. The auction is closely watched as a barometer of media business’ health and this is a sure sign that confidence in China is riding high. China’s economy is set to grow by more than 8% this year, largely due to a $586 billion stimulus package. The main focus of bidding interest was CCTV’s “Chinese New Year Gala,” probably the most-watched show in the world, coverage of the soccer World Cup in South Africa next year and weather reports. Home appliance producer Midea paid $7.6 million for a slot during the 2010 Chinese New Year countdown, a key part of the Chinese New Year show. Sichuan-based spirits company Langjiu Group spent $4.8 million for the exclusive right to have its name associated with the top scorer list during the World Cup. Li Mingzheng, deputy general manager of Langjiu, told local media that the company spent $58.6 million in total. The cost of commercials is estimated to have risen by about 20% this year, but advertisers felt they had to pay as they need the presence. “CCTV is a very important platform for our marketing and branding. We focus on this platform because we have seen success from it. We are happy about what we get at the auction,” Sheng Reisheng, advertising manager at China Ping An Insurance told CCTV. Xu Xinjian, chairman of Sunrain, said his group decided to advertise during primetime on CCTV last year despite the slowdown. The company, which makes solar water heaters, saw 80% growth during the year, and has bought more primetime space next year for $32.2 million. Chinese dairy giant Mengniu spent $29.2 million. The fastest growing advertising sections were household products and construction materials, with total bids growing by 200% year-on-year, CCTV said. Household electrical appliances bids grew 80% and the auto industry spent 70% more than last year. Some 50 international companies took part, spending 28% more than last year.