China Unprecedented Ad Spending Drop During Olympics

China Unprecedented Ad Spending Drop During Olympics

Olympics sponsors and their competitors ramped up their August ad budgets to maximize their exposure during the month of the 2008 Beijing Olympics.

But according to Nielsen, many of China’s advertisers took a break from advertising in August, sending overall ad spending in China tumbling to levels last seen in May 2008, when the Sichuan earthquake hit and advertising was suspended for three days.

Advertising spending in China grew, year over year, by just 7% in August, Nielsen reported Monday.  In comparison, China’s ad spending grew by an average of 19% in the seven months leading up to the Olympic Games.

In August, sponsor advertising grew by 40% — or RMB2.8 billion (US$370 million) in China, but that increase was not enough to compensate for the withdrawal of the rest of the market’s advertisers.

“This is quite unprecedented, based on our monitoring of advertising behavior and spending for previous Olympic Games.  Rather than attempt to battle it out with the Sponsors, other players opted simply to ‘sit out’ the month of August,” Richard Basil-Jones, Managing Director, Media Asia Pacific, Nielsen, noted.  “With the London Games four years out, time will tell whether this was a situation unique to China, or whether in the future, other non-Sponsors will chose to sit on the side lines, leaving the Games open and clear for Sponsors to enjoy maximum cut through in an unusually uncluttered advertising environment.”

Despite the ongoing global financial turmoil, advertisers returned to China’s ad market after the Olympic Games.  In September, ad spending in China registered healthy, near pre-Games growth of 16%, according to Nielsen.

View the full press release.

Read coverage of Nielsen’s findings in the Financial Times.