China's advertising expenditure in 2005 totalled 243.9 billion yuan (US$30.5 billion), 18 per cent more than in 2004, but the growth was the slowest in the past three years.

According to a report released yesterday by Beijing-based CTR Market Research, spending on advertising grew 39 per cent in 2004 and 22 per cent in 2003.

The slower growth in 2005 showed that advertisers are spending more rationally, Tian Tao, vice-president of CTR, said at a press conference.

Enterprises no longer rely on advertisements as much as they did in the past, Chen Gang, a professor at the School of Journalism and Communications of Peking University, told China Daily.

"Enterprises nowadays tend to put part of their money into integrated marketing and other activities to promote their products," Chen said.

On top of that, other factors influenced advertisement spend in 2005, Chen added. The government's macro-control measures to cool down the overheated real-estate sector, the ban on some medical advertising, and slowdown in the automobile industry led to slower growth, he said.

CTR, which researched TV, newspaper, magazine, radio and outdoor advertising, predicted that the industry would keep growing at a slow but stable pace.

Tian said the advertising market is expected to grow 15 per cent this year, much higher than the predicted 4.4 per cent growth for the global market.

Another finding was that newspapers are losing their share of ad revenue to other media.

Though they still dominate the market together with TV, newspapers lost a 3 per cent market share to radio, outdoor and new media last year. Advertising expenditure in newspapers declined by 1 per cent in 2005.

CTR's report said the reason is newspapers' heavy reliance on major advertisers in the real-estate, automobile and pharmaceutical industries, which adjusted their marketing communication strategies in response to the latest regulatory policies.

With the top five advertisers in 2005 remaining almost the same as in 2004, credit cards (80 per cent growth) and imported alcoholic beverages (up 156 per cent) featured strongly last year.

Tian said: "This phenomenon leads us to believe financial services and luxury goods categories will be the driving forces in the year to come."

Source: China Daily