New Regs Leave Advertisers Scrambling to Finalize 2010 Plans

SARFT's Rules Will Make Prime-Time Ads More Scarce and Expensive, Setting the Stage for a Battle Between Media Buyers and Broadcasters

by Normandy Madden
Published: October 28, 2009

SHANGHAI (AdAgeChina.com) -- October is the season for annual budget meetings, always a stressful time of year for advertisers and media agencies in China.

But mapping out plans for 2010 is demanding a "disconcerting" amount of guesswork, said Seth Grossman, Carat's managing director, eastern China in Shanghai.

That's because China is changing regulations for advertising and sponsorship for local and regional TV stations, many of which have near-national reach through cable and satellite syndication. There are a lot of them, too. China has 55 provincial channels, 770 local TV stations and 144 cable channels. The new rules threaten to make reduce the amount of prime time ad slots available, and make them more costly.

"Satellite TV is becoming more popular and more relevant as a way into third- and fourth-tier markets. Now there will be more pressure in terms of getting premium airtime on those channels," said Malcolm Hanlon, CEO China, at Zenith Media in Shanghai.

New guidelines issued by the State Administration of Radio, Film, and Television (SARFT) will bring regulations for those stations in line with the rules at China Central Television (CCTV), the country's state-run national broadcaster.