China’s advertising market has been growing faster than the country’s GDP, the country’s Xinhua news agency reported. As Chinese consumers are increasingly reluctant to buy goods unless they have been advertised, the market is expanding at a high rate. Advertising is now a major business, with ads covering the whole country on buses, radio, TV, and the sides of buildings. China’s outdoor advertising market was valued at roughly RMB 41 billion ($6.0 billion) in 2009, and the industry remains surprisingly robust in the face of a worldwide recession in ad spending. Steady market growth in China has stemmed from three main factors: First, membership in the World Trade Organization provides the country with more opportunity and visibility for international trade; second, the perception that China’s economy is enduring the global recession more successfully than other markets; and third, local players in the advertising industry are becoming more experienced due to higher consumer spending.
China New Media Corp. (OTCBB: CMDI) is the dominant advertising company in Dalian, the commercial center of Northeastern China. CMDI provides comprehensive advertising services from art design to advertisement publishing. The company owns and operates the city’s largest outdoor media network, encompassing over 600 bus shelters furnished with billboards and displays; 130 taxi stops with displays; and 13 large billboards, including 3 advertising posters and 28 metro-trains throughout Dalian Metro Lines. In a recent industry report, market research firm ResearchInChina noted that “the rapidly growing LCD TV advertising in buses and subways replaced the LCD TV media in commercial buildings, enjoying the top advertising share of outdoor electronic screen media. Along with the development of urban transportation, media in public vehicles is more likely to become the mainstream.” In light of this market trend, China New Media’s strategic focus on and solid relationships within Dalian’s public transit system have put the Company in a strong competitive position.
In 2009, CMDI launched the country’s first web-based outdoor advertising network, the City Navigator®. Pedestrians can use the system to obtain information from a cell phone, computer, or by printing from the City Navigator terminal. Advertisements are displayed on the City Navigator’s front-mounted LED display. Based on the positive response, CMDI plans to expand the City Navigator media network into five other provinces in China, including the major economic center of the world, Shanghai.
On July 14, 2010, CMDI announced its acquisition of five billboards in Shanghai, China’s largest advertising market. The billboards are expected to contribute at least $1.2 million to the Company’s revenue on an annual basis. The five billboards were placed in key locations within Shanghai; one of the billboards is the only commercial billboard in the vicinity of the Oriental Pearl Broadcasting & TV Tower, a Shanghai landmark that attracts thousands of visitors each year. With China now the world’s second largest advertisement market, and CMDI’s progressive expansion plan, we are optimistic about the company’s future.
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