China’s two herbal tea giants WangLaoJi and JiaDuoBaoare began a new battle in the advertising war on CCTV’s prime-time advertising pre-sale auction.

It was reported that JiaDuobao spent 86 million yuan [$13.8 million] for the first unit of 10-second ad space after XinwenLianbo (National News Reports). It’s the first open bidding program for CCTV’s pre-sale auction.

Advertising slots at CCTV have been divided into six units, each consists of two months. The first unit proved to be the most expensive one as it covers the consumption peaks on New Year’s Day and Chinese Spring Festival.

To cooperate with CCTV is essential for the development of the JiaDuoBao brand, said Wang Yuegui, vice general manager of the brand management department of JiaDuoBao.

According to estimates by insiders, JiaDuoBao has invested over 3 billion yuan [$481 million] into advertising.

Afterwards, WangLaoJi, the strongest rival of JiaDuoBao successfully won the ad slot in summer time (July and August), another consumption season for herbal tea,for 60.8 million yuan [$9.7 million].

In fact, the competition between JiaDuoBao and WangLaoJi has lasted for a while now. Earlier this year, JiaDuoBao obtained the exclusive naming rights for the second season of “The Voice of China” with 200 million yuan [$32.1 million]. By comparison, WangLaoJi, backed by Guangzhou Pharmaceutical Group, a state-owned company, was reported to invest 5 million yuan [~$800,000] partnering with CCTV and Hunan Satellite TV.

It’s natural for JiaDuoBao and WangLaoJi, the two herbal tea giants to fight for advertising resources as for FMCG (fast-moving consumer goods), brand communication is the unavoidable way to gain influence, said Huang Shengmin, president of the School of Advertising at the Communication University of China.

The two companies are neck and neck on brand communication, according to Li Guangdou, one brand expert, but JiaDuoBao has obtained certain advantages on channels.

However, the rising of JiaDuoBao doesn’t mean the fail of WangLaoJi. The competition between the two giants can help to promote the herbal tea industry as a whole, which is just like the competition between Coke and Pepsi, said Deng Delong, general manager of Trout & Partners Ltd.

Source: Morning Whistle Nov 2012

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