Wednesday, December 24, 2008

Three-quarters of Chinese advertisers to cut spending in 2009

Over three-quarters of Chinese advertisers plan to cut their advertising spending in 2009, of which 16 percent plan to make substantial cuts compared to their 2008 spending, according to a report released by a consulting firm on Dec. 23.

According to a survey conducted by iResearch in November, 60 percent of the 305 advertisers surveyed plan to reduce advertising investment "slightly" while 16 percent will make a "large" cut. Only 3.6 percent of those surveyed said they would make large increases in their advertising spending, while another 12.5 percent said they would make slight increases in their advertising budgets. Around 8 percent said their advertising expenditure for 2009 would remain broadly similar to that of 2008.

The majority of those surveyed expect the Chinese online advertising market to grow in 2009, although less than predictions made before the global financial crisis took effect. Around 29 percent of respondents predicted growth of over 30 percent, while 35.4 percent believed the market will increase by between 11 percent and 30 percent. Around 20 percent said the increase would be less than 10 percent. The remainder of those surveyed did not make a prediction.

The survey's results led iResearch to revise its predictions for growth of China's online advertising market in 2009 to between 15 percent and 20 percent. A more optimistic report by the firm in February 2008 had predicted that growth for 2009 could be as much as 35 percent.

Over 57 percent of the advertisers surveyed last month said online advertising offered a better quality to price ratio than TV and print advertising, is much better at targeting specific audiences and is more interactive.

Of all Internet platforms, search engines were named by 36 percent of respondents as the most likely via which they would advertise in 2009. Topical portals were named as the top choice by 21.6 percent of respondents, general portals by 17.1 percent, instant messaging services by 11.5 percent, blogs by 7.2 percent and email by 3.6 percent.

iResearch said that accurate, low-price advertising platforms that can measure the reach of advertising effectively, such as the bid-for-ranking model used by search engines, will be a growth area in 2009.

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