Media agency Carat, based in Shanghai, reports that China’s ad market will grow by 6.9% this year, far exceeding their earlier forecast of 4.6%.  While clearly good news in light of the difficult environment this year, 6.9% growth is actually the lowest increase in ad spending in the past decade.

In the article featured in AdAgeChina, Carat asserts that the rapid growth of satellite television stations is putting pressure on local and provincial stations to raise the quality of their programming.  With higher quality satellite programming come better ratings and increased brand awareness in second-, third- and fourth-tier markets (above and beyond the traditional tier one centers).

What’s more, there has been huge growth in digital outdoor media options, which is allowing two-way interaction in even the most traditional of media spaces, such as bus shelters or office elevator lobbies.

Digital developments, for example mobile search, social media or online gaming, are also reshaping how consumers engage with media.

But it hasn’t all been good news.  2009 has been a difficult year at times and the gloom surrounding the recession has meant many advertisers were unwilling to make long-term plans and commitments.  They have, of course, also been squeezing prices down in their drive for efficiency.  2010 is expected to be a better year, although we should not expect to see a complete and immediate change in tactics from advertisers.

Other challenges will need to be taken into consideration by marketers next year as well.  High-profile events, such as the 2010 World Expo which is taking place in Shanghai and the Asian Games being held in Guangzhou, will be inflationary and raise costs in these two cities, just as last year’s Olympic Games did in Beijing.

The regulatory environment is also set to change next year.  China’s State Administration of Radio, Film and Television has announced a whole host of new regulations which aim to limit the amount of airtime given to commercials, setting a maximum advertising allotment per hour, etc.  It is not yet known what impact these new restrictions will have on advertising rates.

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Advertising spend in China increased by an impressive 9% to 189.96 billion RMB ($27.8 billion) in 2008, compared to the previous year.

In figures released by China’s State Administration for Industry and Commerce (SAIC), advertisers spent 50.15 billion RMB ($7.3 billion) on television commercials, which equates to a 13% increase over 2007.  This figure also amounts to more than a quarter (26.4%) of China’s total ad spend.  Print advertising in newspapers, meanwhile, climbed 6% to 34.27 billion RMB ($5.02 billion).

To some extent these statistics are particularly interesting because many Western surveys, reports and think tanks continue to predict a tough year ahead for advertising.  Spend on television and, in particular, print ads is expected to suffer at the hands of the recession; conversely, the internet should continue to cement its position as the advertising medium of choice.  It remains to be seen to what extent this will be the case in China, but it seems very likely that online advertising will have a strong 2009.