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By S AATCHI & S AATCHI & TEAM ONE September 13, 2006 Establishing LDA in China.
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Transcript of By S AATCHI & S AATCHI & TEAM ONE September 13, 2006 Establishing LDA in China.
By SAATCHI & SAATCHI& TEAM ONE
September 13, 2006
Establishing LDA in China
China – Basic geographic information
3Source : China Statistics Yearbook, Nielsen, SAIC
China – Geographic overview by income level
Hubei
Hunan
Guangxi
Sichuan
Yunnan
Tibet
Hainan
Xinjiang Uygur
ShaanxiAnhui
GansuShandong
Jiangsu
Zhejiang
Fujian
Guangdong
BeijingTianjin
Shanghai
Upper : Rmb 10 000 +
Above Average : Rmb 7500 - 9999
Lower : < Rmb 6500
Medium : Rmb 6500 - 7499
Disposable Income
Inner Mongolia
Shaanxi
Jilin
Heilongjiang
Anhui
Jiangxi
Henan
ShanxiQinghai
Guizhou
Gansu
Hebei
Liaoning
Chongqing
4Source : China Statistics Yearbook, Nielsen, SAIC
Tier 1 markets
Shandong
Jiangsu
Zhejiang
Fujian
Guangdong
BeijingTianjin
Shanghai
Tier 156% of Adspend
30% of Population
5Source : China Statistics Yearbook, Nielsen, SAIC
Hubei
Hunan
Guangxi
Sichuan
Yunnan
Tibet
Hainan
Xinjiang Uygur
Hebei
Liaoning
Chongqing
Tier 222% of Adspend
37% of Population
Tier 2 markets
6Source : China Statistics Yearbook, Nielsen, SAIC
ShaanxiAnhui
Gansu
Inner Mongolia
Shaanxi
Jilin
Heilongjiang
Anhui
Jiangxi
Henan
ShanxiQinghai
Guizhou
Gansu
Tier 321% of Adspend
33% of Population
Tier 3 markets
Media environment in China
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Medium National Provincial City/County Total
Newspaper 2,137 2,137
Magazine 9,029 9,029
1 368(31) (1,636) (1,668 stations)
367TV
2 306(31) (1,663) (1,696 stations)
304Radio
Internet 595,550 RegisteredDomain Names 595,550
Outdoor Millions …. billboards, buses,illuminated signs, MTR, bus shelters
Millions
Media overview in China
9
TV categories in China
National network (CCTV)Provincial cable stations
Provincial stations
Local city stations
National coverage
Provincial coverage
Local city coverage
10
Media Coverage
93%TV
Local TV
Provincial TVNational
Provincial Sat.
Foreign Sat.CCTV
Provincial TerrestrialCCTV-1CCTV-2CCTV-3CCTV-4CCTV-5CCTV-6CCTV-7CCTV-8
CCTV-9CCTV-10CCTV-11CCTV-12CCTV-13CCTV-14
Coverage 70%+
Coverageless than
70%
KEY FACTS1. 1,668 TV stations among 31 provinces in total.2. Except for the 27 approved foreign channels,
all owned by the government.3. Foreign National Satellite TV include ESPN, BBC
World, HBO, Phoenix Movie, etc. They areall charged by government.
TV - Overview
Three kinds of provincial TV channels: Satellite, Terrestrial, Cable
Provincial Satellite: The signal covers the whole country, but it depends
on whether local cable operators broadcast it Viewership is usually low outside home province
Provincial Terrestrial: Usually covers most area of a province. But the
penetration varies from channels to channels.Provincial Cable:
Penetration is usually low outside the capital cities.
Provincial TV
12
2 ways of distribution: terrestrial Vs. cable
All households can receive the terrestrialchannels. For cable channels, subscription is
required.
In major cities, cable subscription rates are high (more than 90% in the urban are of 3 primary
markets)
Local TV
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77%Local CoverageNational Coverage
KEY FACTS:
2,150 registered titles Can also be classified into national, provincial, and city-level Local papers are still dominant Launch of regular supplement (e.g. automobile) or weekend edition All titles’ circulation are un-audited and their claimed circulations are grossly
inflated
Newspaper
Media Coverage
Newspaper- Overview
14
Magazine- Overview
48%
Media CoverageKEY FACTS:
1. 9,029 registered titles skewed to key urban areas2. Many “new” titles are launched by using an existing registered numbers3. Over the past years, many new titles on computer, commercial, leisure were launched4. Foreign publishers rush in to gain share in this market by investing in existing local titles e.g. Fortune China, Globe, etc.5. More flexible in execution method6. Similar to newspaper, nearly all titles are un-audited and their claimed circulations are grossly inflated
15
KEY FACTS:
Local governments influence is large Increasing used by international/JV advertisers, e.g. Shanghai GM, Nokia, Coke Good locations are always high in demand and premiums are often levied on sites Regulations vary by city Very limited research data
Outdoor
Individual siteOutdoor network
owned and managed by professional company which can cover a certain areae.g. MTR, bus shelters, bus body, etc.
owned and managed by individual vendor. e.g. Unipole, neon sign, etc.
Outdoor - Overview
92%
Media Coverage
Lexus in China – Dealer Locations
Lexus Dealer Locations – Present (as of August 2006)
Lexus Dealer Locations – Phase 3 (within 2007)
19
Consideration points for building LDA in China
Designated marketing areas (DMA): AllocationsFuture plan
Advertising revenue: Cost structure of MSRP
Matching fund from TMCI
Cost allocations for DMA
Operation: Operation structureResponsibilitiesFinancial managementProceduresMedia/production
planning
Others: Future plan for CPO
20
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