CCTV plays down advertising auction

State broadcaster declines to release figures from selling ads and sponsorship on shows amid economic slowdown

China Central Television (CCTV), the national broadcaster, played down its annual prime-time advertising slots auction on Tuesday after a former advertising director was taken away for investigation, only saying that its total ad revenue this year exceeded last year's.

Bidders from the food and beverage, home appliance, automobile, finance and tourism sectors were active in the six-hour auction. Previous auctions could last as long as 12 hours, but CCTV explained in a statement released Tuesday that the shortened time was because some of the ad slots had been sold ahead of the auction.

Ningxia-based Efone Group, a wine distributor, won the first bid, paying 118 million yuan ($19.2 million) for the exclusive naming rights for the third season of hit documentary A Bite of China that features food dishes nationwide.

High-end liquor brands such as Kweichow Moutai, Wuliangye and JNC, which used to be top bidders or spend a lot, did not make any substantial bids in the auction. But CCTV said they bought ad slots during the pre-sale process.

"The years of liquor makers throwing large sums of money in CCTV's auction have gone, because they are more rational and low-profile now," Yang Chengping, chief consultant with Jiangxi Provincial Association for Liquor and Sprits Circulation, told the Global Times Tuesday.

China's anti-corruption campaign has squeezed their profits, and CCTV is also not the only choice anymore, he said.

But CCTV is still seen as a major platform for new brands to target the national market.

"CCTV's Spring Festival Gala is the most viewed TV program in China, and we hope audiences could know about our brand through the ads," Wu Zhaoguo, chairman of cosmetic maker Sibu Group, said on the sidelines of the auction. The company, established in late 2013, spent 25 million yuan in the auction.

This is the 21st year that the national broadcaster has held such an auction, which is dubbed as "a barometer of the country's economic situation," but only the second time that it did not release the revenue figures raised from the auction. Last year was the first time.

In 2012's auction, CCTV earned revenue of 15.88 billion yuan.

"CCTV has concerns that [announcing] the revenue will not look good amid China's economic slowdown and competition from the new media, as we saw a loss of momentum in the ad revenue growth in recent years," Wang Yong, secretary-general of Brand China Industry Union, told the Global Times Tuesday.

The TV giant's downplaying of the auction is also related to the investigation of its former advertising director, Wang noted.

Two senior producers of CCTV had been put into "compulsory measures," which can range from bail to detention, for being suspected of bribery, the Supreme People's Procuratorate said on June 1. One of them is Guo Zhenxi, director of CCTV finance and economics channel and former advertising director. The case is still under investigation.

In comparison, CCTV's major rival Hunan TV, a local broadcaster well-known for entertainment shows, was more high-profile. It held its prime-time advertising auction on Thursday, gaining more than 3 billion yuan in total.

"CCTV still dominates China's TV ad market, and its leading status will not be shaken up in the long term," Chen Shaofeng, deputy dean of the Institute for Cultural Industries at Peking University, told the Global Times Tuesday.

"But it will not earn as much money as easily as before," Chen said.

The State broadcaster's biggest competitor is new media. In 2013, search engine giant Baidu Inc's advertising revenue surpassed that of CCTV for the first time, according to Li Guangdou, a Beijing-based brand expert.

On Tuesday's auction, CCTV also for the first time auctioned ads on its new media platforms.

The sponsorship rights for its mobile app were sold to home appliance makers Haier Group and Midea Group and automaker Nissan for undisclosed amounts.