China Media Landscape Everassion Consulting Sichuan Co Ltd

China Media Landscape Everassion Consulting (Sichuan) Co. Ltd. UTS Advertising (Chengdu) Co. Ltd. 2002 -04 -08 http: //www. 5 ixue. com (海量营销管理培训资料下载)

Welcome! Legend (Chengdu) http: //www. 5 ixue. com (海量营销管理培训资料下载)

Facts at a glance l 3 rd largest country (9. 6 MM sq km) l 1/5 worlds population (1. 3 B) *1, 000+ dialects *32 Provinces/municipalities, autonomous regions l Urban population: 32. 4% l Inflation rate: 2. 4% (CPI) l GDP growth rate: 7% for 2001 http: //www. 5 ixue. com Source: Statistical yearbook 2001; World Bank (海量营销管理培训资料下载)

Urban Disposable income Per capita Heilongjiang Ningxia Jilin Xinjiang Liaoning Neimenggu Beijing Hebei Shanxi Qinghai Gansu Xizang Shandong Shaanxi Henan Jiangsu Anhui Hubei Sichuan Chongqing Shanghai Zhejiang Hunan Guangxi 6 -7, 000 Fujian Guangdong Over 8, 000 7 -8, 000 Jiangxi Guizhou Yunnan Tianjin Average National Disposable Income Per Capita: 5, 403 RMB Taiwan 5 -6, 000 4 -5, 000 Source: China Statistical Yearbook 1999 Hainan http: //www. 5 ixue. com (海量营销管理培训资料下载)

Population By age and sex Unit: ’ 000 person 91 = Index M/F 102 103 102 104 111 Source: China Statistical Yearbook 2000 China Population Statistics Yearbook 2000 http: //www. 5 ixue. com (海量营销管理培训资料下载)

Agenda 1. China media development 2. Current research environment 3. Major media forms http: //www. 5 ixue. com (海量营销管理培训资料下载)

2. China Media Development http: //www. 5 ixue. com (海量营销管理培训资料下载)

China media development l Everything began at 1979 when Deng Xiao Ping announced the economic reform. . . Before 1979 l There were only 10 advertising agencies in China l Basically there was no advertising on newspaper, radio, or TV In 1979 l The first TVC, Shen Gui Wine, was aired by Shanghai TV on January 28 l On March 15, the first JV TVC, Rada Watch, was aired l People’s Daily began to accept advertising on April 17 l In November, the Central Propaganda Department has announced the new regulations foreign advertisement l And the rest is history. . . http: //www. 5 ixue. com (海量营销管理培训资料下载)

The media scene today…. . Medium National. Provincial City/Rural Television 1 33 2, 000+ 2, 900+ Radio 2 31 912+ Newspapers 20+ 31+ 800+ Cable 1, 363+ 1, 900+ 2, 000+ Magazines 7, 000+ Cinemas 146, 000+ Source: Zenith Media http: //www. 5 ixue. com (海量营销管理培训资料下载) Total

Reach of mass media % % All Adults Aged 15 - 29 TV (yesterday’s viewing) 89 86 TV (P 7 days) 96 95 Radio (yesterday’s listenership) 41 44 Radio (P 7 days) 41 45 Newspapers (daily) 67 65 Magazines (monthly) 53 67 Cinema (at least once a month) 7 14 Medium Universe ‘ 000 s 37, 875 14, 492 Source: CMMS’ 00 http: //www. 5 ixue. com (海量营销管理培训资料下载) (20 cities)

. 3 Research Environmen t http: //www. 5 ixue. com (海量营销管理培训资料下载)

Media research today 3 kinds of media research are available in China : l TV ratings l Advertising monitoring l Readership /consumer media habits http: //www. 5 ixue. com (海量营销管理培训资料下载)

TV ratings l Understand the viewership in different markets l Provide a rational base for media planning l Better media selection (channel, program, and timeslot) and more cost- efficient media investment * CSM: Covers 66 diary cities, 9 provinces Peoplemeters in BJ , GZ and SH * AC Nielsen : Covers 88 channels in 10 peoplemeter cities: BJ, SH, GZ, CD, WH, HZ, SY, NJ, TJ, FZ http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising monitoring l Monitor advertising in TV channels and Press l Keep track of a company advertising delivery as well as competitive activities * X&L : Provide ad monitoring for 336 TV channels, 269 newspapers, 92 magazines * AC Nielsen : * CVSC: Cover 220 TV channels, 169 newspapers, 47 magazines Cover 339 TV channels and 150 newspapers http: //www. 5 ixue. com (海量营销管理培训资料下载)

Consumer research l Three single source research tools exist in China, each providing * Readership data for different newspapers and magazines * Understanding of the profile of selected print media and media habits on a specific target * A base for other media selection (e. g. radio) * An understanding on product usage/lifestyle of Chinese consumers l. China Media & Marketing Survey l. China National Readership Survey l. AC Nielsen Media Index (Millenium Report) http: //www. 5 ixue. com (海量营销管理培训资料下载)

China Media & Market Survey * Research House: Sino-Monitor / BMRB * Fieldwork Period: CMMS 99 (Dec’ 98, Jun’ 99) CMMS 2000 ( Feb -Jun ‘ 00) * Coverage Area: 20 cities * Survey Media: TV, Radio, Newspaper, Magazine * Sample: 50, 000 for CMMS 99 and CMMS 2000 each http: //www. 5 ixue. com (海量营销管理培训资料下载)

China National Readership Survey * Research House: CVSC * Fieldwork Period: Oct’ 98; continuous from July’ 99 * Coverage Area: 60 cities(98); 30 cities (1999 -2000) * Survey Media: TV, Radio, Newspaper, Magazines * Sample: 47, 800 (98); 71, 500(1999 -2000) http: //www. 5 ixue. com (海量营销管理培训资料下载)

AC Nielsen Millenium Report * Research House: AC Nielsen * Fieldwork Period: May-Dec’ 99 * Coverage Area: 30 cities * Survey Media: TV, Radio, Newspaper, Magazine * Sample: 44, 000 http: //www. 5 ixue. com (海量营销管理培训资料下载)

4. Overview of Major Media forms http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising Expenditure 1987 -2002 Estimated figures for 2000 - 2002 Million US$ http: //www. 5 ixue. com Source: China Advertising Association; (海量营销管理培训资料下载)Zenith Media

Television http: //www. 5 ixue. com (海量营销管理培训资料下载)

TV Advertising Expenditure 19872002 Million US$ http: //www. 5 ixue. com Source: China Advertising Association; Zenith Media (海量营销管理培训资料下载)

National vs Local Stations National (CCTV) Coverage National Local Specific region Program Type Information-oriented : More entertainment e. g. news, educational, oriented : e. g. drama. documentary, etc. Flexible, negotiable, Conservative, strict, welcomed foreign mainly local produced or local program exchange Language Mandarin dialects may be Mainly Mandarin, but used http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising environment l Most commercial breaks are outside program l For drama and long programs (e. g. sports game, variety show) inside program breaks are more likely l Other inside program opportunity : Program and Syndication (P&S) l No strict governmental regulation on total commercials. For most stations 25 -30 minutes in primetime ; time slots lengthened for good dramas l An average break has 5 -8 minutes. However, it can be as long as 15 minutes in some imported drama l Since most GD cable stations transmit the 4 HK channels, their commercial break pattern would follow HK : 3 -5 minutes break for every other 15 minutes http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising environment. . . l There may be missing spots (has been dropped from 8% in 96 to less than 0. 6% in 99) l The length of the TVC may be shorter due to : * The stations accept too many advertisers for a break : sometimes intentional, sometimes not * Poor quality control l There is no such thing as category protection. Advertising is highly concentrated in the prime time l Program sponsors and international agencies (like ourselves) normally get better ad position (first 3/last 3) l There is rate card inflation every year; more frequently for some stations http: //www. 5 ixue. com (海量营销管理培训资料下载)

CCTV l l l Established on May 1958 There are 12 channels Local stations have to broadcast Channel 2 and 3, normally through microwave It is the “voice of the government”. Therefore, all the programs / commercials are strictly censored Although CCTV does not have any legal authority on local stations, they respect it as the head Not only the ad department accepts bookings but also : * Some program departments, e. g. the sports division (CCTV 5) * Some brokers which buy out all the airtime of a specific time-slot http: //www. 5 ixue. com (海量营销管理培训资料下载)

Satellite TV in China Foreign l Star TV was banned in 1993 after the station was sold to Murdoch l Pheonix TV was launched in March 1996 as a JV channel l Limited distribution is allowed for entertainment (e. g. MTV), sports (e. g. ESPN), and selective business channel (e. g. CNBC) Local l 31 Provincial TVs are broadcast via satellite l However, though the signal is there, distribution is still a key issue l The existing distribution methods : * Provide decoder for local distributors * Pay a supplement for local distributors * Barter deal with other Satellite Provincial TVs http: //www. 5 ixue. com (海量营销管理培训资料下载)

Cable TV in China l There are over 2, 000 cable operators at different levels : provincial, city, and county, spreading from the coastal provinces to the inland l Government began to control the numbers of stations 1999 l Moreover, the transformation of the MRFT also introduced a balancing force to limit the power of GARFT to develop cable networks in China http: //www. 5 ixue. com (海量营销管理培训资料下载)

Top television advertisers By category Spending (US $ ‘ 000) Category Tonic Shampoo Chinese Wine & Spirits Skin Care Product Laundry Product Soft Drink Toothpaste CD Video Air Conditioner Beer Jan 99 - Dec 99 340, 291 200, 642 184, 883 168, 914 119, 979 111, 459 101, 714 96, 141 92, 574 78, 736 Source : X&L Monitoring Services http: //www. 5 ixue. com (海量营销管理培训资料下载)

TV viewership Weekdays http: //www. 5 ixue. com (海量营销管理培训资料下载) Source: CMMS 00’(20 cities)

Newspapers http: //www. 5 ixue. com (海量营销管理培训资料下载)

Newspapers l 2, 000+ titles though Local papers still dominant l Editorial content improving * Many local newspapers have diversified their editorial to cater to readers needs (e. g. social commentary, health, finance) l Launch of weekend edition focusing on leisure & lifestyle with improved color reproduction * Pushing weekend circulation * New launches focused on special interests le. g. Live Weekly, Shopping Guide l All titles are un-audited and their claimed circulations are grossly inflated http: //www. 5 ixue. com (海量营销管理培训资料下载)

Top newspaper advertisers By category Category Spending (US $ ‘ 000) Jan 99 - Dec 99 Villa 153, 310 Computers 81, 677 Mobile Phone 55, 053 Tonic 44, 818 Department Store 39, 150 Telecommunication Co. 34, 114 Air Conditioner 32, 534 Mansion 26, 802 Computer-peripherals 25, 243 Computers dealer-retailer-manufacture 24, 078 Source : X&L Monitoring Services http: //www. 5 ixue. com (海量营销管理培训资料下载)

Newspapers Leading titles Source: CMMS 00’ http: //www. 5 ixue. com (海量营销管理培训资料下载) (20 cities)

Magazines http: //www. 5 ixue. com (海量营销管理培训资料下载)

Magazines l 6, 000+ titles, primarily skewed toward key urban areas l Trend toward increased joint venture partnerships with overseas publishing houses entering China market * American Baby, Elle, Women’s Day, Cosmopolitan, Look, etc * Target to a niche group with limited circulation l Hampered by limited quality of research, lack of circulation audit http: //www. 5 ixue. com (海量营销管理培训资料下载)

Top 10 national magazines Title Readers Bosom Friend Family The Family Doctor Securities Love Shanghai Style Travelling Scope Modern Family World Vision Circulation ’ 000 s(claimed) 3, 850 3, 200 3, 000 1, 900 1, 000 900 833 500 460 Source: Media Owner http: //www. 5 ixue. com (海量营销管理培训资料下载)

Radio http: //www. 5 ixue. com (海量营销管理培训资料下载)

Radio l 1, 363+ stations across China l Broadcasting catered to the masses though already expanding into niche casting in key cities * Financial, music, traffic, kids, etc. * Contemporary broadcasting format, youth appealing * Flexible opportunities for program sponsorship l News and music programs still attract the highest listenership l Major international syndicator entries to China * e. g. Joy FM, Easy FM, etc l Ratings data not available; still buying on spots http: //www. 5 ixue. com (海量营销管理培训资料下载)

National radio stations http: //www. 5 ixue. com (海量营销管理培训资料下载)

Radio listenership Weekdays Yesterday coverage (%) Source: CMMS 00’(20 cities) http: //www. 5 ixue. com (海量营销管理培训资料下载)

Outdoor http: //www. 5 ixue. com (海量营销管理培训资料下载)

Outdoor l Development in Public Transportation network by imported media firms as MPI, Top Result, Metro, etc. l Among the most cluttered markets in the world * Anything goes anywhere (e. g. roof top, construction sites, street furniture, etc) * Increased government regulations in place to control the ‘clutter’ l Increasing used by international/JV advertisers (e. g. Shanghai GM, Nokia, Coke, Pepsi, etc) l Good locations are always high in demand premiums of between 20 -50% are often levied on sites http: //www. 5 ixue. com (海量营销管理培训资料下载)

Available forms of outdoor l Roof top billboards l Neons l Buses / bus shelters l Street level light boxes l Wall sign l Banner / balloons l Metro posters l Telephone booths l Taxis http: //www. 5 ixue. com (海量营销管理培训资料下载)

Top ten outdoor advertisers 1. China Telecom 2. BAT 3. Coca Cola 4. China Mobile 5. Motorola 6. Nokia 7. Pepsi Cola 8. Unicom 9. SH Volkswagen 10. Philip Morris Source: Poster. Link, No adex http: //www. 5 ixue. com (海量营销管理培训资料下载) available

Risks and challenges of outdoor No fixed rate card No research data available No industry association Lack of Regulations Unprofessional After-Sale Service vary by city brokers Concept (Maintenance, Monitoring, etc) http: //www. 5 ixue. com (海量营销管理培训资料下载)

Average cost of outdoor l Billboard * US$ 26. 5 - US$ 42 per sq metre/per month l Bus * US$1, 000 per bus/per month http: //www. 5 ixue. com (海量营销管理培训资料下载)

Cinema http: //www. 5 ixue. com (海量营销管理培训资料下载)

Cinema l Estimated 100, 000+ cinemas across China * 4, 000 well - equipped (mini-theatre) l Dominated by local film, about 150 - 200 per year l Allowed to import 30 -45 International movies per year (Average 10 - 15 days per international movie) l Average 6 shows per day l Lack of research, quality control l Attendance in decline due to the rising popularity of other forms of entertainment (e. g. VCDs) http: //www. 5 ixue. com (海量营销管理培训资料下载)

Opportunity for advertising l Commercial transmitted before movies start (approx. 5 mins, max 2. 5 mins for a advertiser) l Standardized position (learning from “Titanic”) Movie Position 1 2 3 4 5 6 7 8 9 10 Regional National l Allow area buy *Advertising cost varies in each area and subject to demand/supply l Booking lead-time : at least one month before (Longer lead time needed for more popular foreign titles) http: //www. 5 ixue. com (海量营销管理培训资料下载)

Internet http: //www. 5 ixue. com (海量营销管理培训资料下载)

Internet Supplier by End of 2000 Total number of: l China URL (. com. cn) 15, 153 l Service provider 350+ l Content provider 250+ l Search engines 50+ http: //www. 5 ixue. com (海量营销管理培训资料下载)

Increasing band wide and content Band Wide to US No. Of China URL Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

Internet user doubled every 6 ‘ 000 months Source: http: //www. 5 ixue. com (海量营销管理培训资料下载)CNNIC Report

…But is just the beginning to take off M Source: BDA - The Internet in China http: //www. 5 ixue. com (海量营销管理培训资料下载)

Pageview increased quickly Daily Pageview http: //www. 5 ixue. com Source: Sina//Netease/Sohu (海量营销管理培训资料下载)

Internet Regulation in China - Still Unclear l In December 1999, control of the Internet was moved from the Ministry of Information Industry to "relevant government departments”. l Banned the discussion of "state secrets" over the Internet. l Rules for e-commerce, online auctions and advertising are rumored to be in the works. l After Jan. 31, China would restrict the use, sale and manufacture of products that use overseas encryption technology. l But according to Foreign Ministry spokesman Zhu Bangzao, the law will not "hamper. . . foreign companies entering China. " Source: The. Standard. com Feb 14, 2000 http: //www. 5 ixue. com (海量营销管理培训资料下载)

The statistics of internet users - by age Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

The statistics of internet users - by region Surfer are more concentrated in BJ, SH and GD (total 45%) which are developed area Source: http: //www. 5 ixue. com (海量营销管理培训资料下载)CNNIC Report ‘ 00

The statistic of internet users--by income 64% people have 1, 000+ PMI Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

The statistics of internet users --by sex More female than before, but still male skewed Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

The statistics of internet users --Where people surf 37% is surf-at-work, Internet is one of the few media can reach people during work. Source: CNNIC Report ‘ 00 http: //www. 5 ixue. com (海量营销管理培训资料下载)

The statistics of internet users --by education 84% internet users have college degree or above in China Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

2000 top ten popular websites 1. 四通利方信息技术有限公司的“新浪网” www. sina. com. cn 2. 网易公司的“网易” www. 163. com（www. netease. com、www. yeah. net、www. nease. net） 3. 搜狐爱特信（北京）信息技术有限公司的“搜狐” www. sohu. com（www. sohu. com. cn、www. sohoo. com. cn） 4. 广州飞华电信 程有限公司的“ 163电子邮局” www. 163. net 5. 北京京讯公众信息技术有限公司的“首都在线” www. 263. net（www. 263. net. cn） 6. 联想电脑有限公司的“FM 365” www. fm 365. com 7. 世纪龙信息网络有限责任公司的“ 21 CN” www. 21 cn. com 8. YAHOO! INC. cn. yahoo. com 9. 上海在线信息网络集成有限公司的“上海热线” www. online. sh. cn 10. 天极信息发展有限公司的“CPCW网站” www. cpcw. com Source: CNNIC Report http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising Cost CPM (RMB) l Banner 120 -180 l E-mail/Newsletter 100 l Icon 100 -150 l Sponsorship Depend on traffic l Interstitial/Pop up 180+ l Text 40 -100 Comparing with TV and Newspaper * TV (Beijing) 36 * NP (Banner) 145 http: //www. 5 ixue. com (海量营销管理培训资料下载)

Advertising monitoring l Third party monitoring * Sina: Use Ad Force to provide monitoring report l Monitoring Software on website server * Sohu and Netease utilize Netgravity to create monitoring report l Self developed software * Yahoo * Tianfu Online http: //www. 5 ixue. com (海量营销管理培训资料下载)

Summary l China is definitely one of the most potential markets on earth with its huge population. l Ad spend grows 19 times over the past 10 years and a high growth rate is forecasted to be continued. l For TV, the market becomes more and more matured with the education from foreign advertising and media agencies. l For other media, it still takes time to be regulated especially for newspapers. l Though regulation on the internet is still uncertain, the growth of suppliers as well as the market size would be very significant in the next 5 years. http: //www. 5 ixue. com (海量营销管理培训资料下载)

Thanks! Legend (Chengdu) Co. , Ltd. http: //www. 5 ixue. com (海量营销管理培训资料下载)