China's CCTV scales back ambitions at closed-door ad auction

(Reuters) - China's bellwether TV ad auction was hit by the country's slowing economy and rising competition from online entertainment, but showed modest recovery from last year - at least for its cornerstone evening news program. China Central Television (CCTV), the government's biggest and most important TV network, reached total sales of 5 billion yuan ($817.13 million), according to market researcher Imedia, at a scaled-back auction in Beijing on Tuesday. CCTV's annual ad auction, which sells advertising slots for the upcoming year, is considered a barometer for China's economy. About 80 percent of disclosed sales went to the network's flagship evening news broadcast, according to Imedia. More than 30 firms, including Industrial and Commercial Bank of China Ltd, Ping An Insurance Group Co of China and Tsingtao Brewery Co, committed 3.9 billion yuan to air five and 10-second commercials following the broadcast. That was slightly better than last year. "Everyone is cautiously optimistic about next year’s economic situation, so CCTV downplayed the auction,” said Huang Shengmin, professor of advertising at Communication University of China. Comparisons with earlier years are difficult, since CCTV hasn't publicly disclosed many of this year's results, including who secured the exclusive online naming rights for the network's Spring Festival Gala. Tuesday's auction clocked in at 6 hours, about half the length of previous years. CCTV is battling shrinking income as its viewers and advertisers migrate to online and mobile platforms. The state broadcaster's advertising revenue dropped 10 percent in the first nine months of this year, compared with 2013, according to CTR Market Research. Chinese television advertising is expected for the first time to account for less than 50 percent of the total ad market in 2014, according to WPP Plc's China market research unit GroupM. Internet ad spending, by comparison, increased 38 percent in the first nine months, according to CTR. The annual ad auction garnered a record-high of 15.9 billion yuan in 2012, the 12th consecutive year of double-digit growth. Since then, the state network stopped publicly disclosing the auction’s total amount, while increasing the pre-sale of many of its programs. The results of this year's auction, which was held behind four levels of security checks, were not publicized. CCTV in a statement said that auction sales ended "higher than last year." (Reporting By Matthew Miller and Beijing Newsroom; Editing by Jeremy Laurence)