Foreign brands less involved than domestic firms in CCTV ad auction

The rise was higher than expected against a projection of between 8 to 10 per cent that factored in recent economic softening in the mainland, said Zhou Wei, chief financial officer of Charm Communications, the top bidding agency for 10 consecutive years.

Few foreign brands were active in the auction. Ad prices have increased in the last year after state TV regulators issued rules restricting commercials in between television dramas, shrinking the time available for advertisements.

Despite that, a total of 251 companies participated, with the top industries being food and beverage, household appliances, financial services, automobiles, liquor, and tourism. Most of the bidders were domestic brands such as Arowana, Nongfu, Jahwa, Geely, Haier, Suning and Gome, as well as state-owned banks.

Chinese 'baijiu' liquor-makers spent the most money in the auction. JNC Group bid more than RMB600 million to advertise, surpassing last year's high of RMB498 million from rival Kweichow Moutai, which spent only RMB352 million this year. Wuliangye Group spent RMB499 million to secure a slot in the commercial break ahead of CCTV's flagship news program.

Some industry insiders, who asked not to be named, noted that foreign brands seemed less competitive in the face of rising domestic brands for an interesting reason: Domestic brands, convinced by the massive reach of CCTV as ad advertising platform, usually head to the auction with no ceiling in mind for their bidding price.

One "peculiar" mindset that domestic brands have is that once they advertise on CCTV, they will gain clout with distributors to carry their products. For foreign brands, it is the other way around.