TV programmers and ad sales teams in China are experimenting with new approaches to woo advertisers after the government tightened controls on content and airtime sales, banning ad breaks within dramas and capping entertainment shows during primetime.

In-drama commercial breaks were extremely popular among advertisers, so the clampdown, which came into force at the beginning of the year, has hit channels especially hard.

Net revenues from in-program breaks for dramas totaled RMB16 billion/US$2.5 billion in 2011, according to media monitor CTR Media Intelligence, with drama series making up nearly 30% of airtime between 5pm and 12pm.

To compensate, channels have extended ad breaks elsewhere in the schedule while raising rates for high-profile slots, with the highest premiums applied to those preceding the drama itself.

Ad-free programming raises audience engagement levels during the show, making these spots more valuable, but longer breaks also encourage more channel-switching once it is over.

Resourceful networks are devising more creative ways to retain their share of ad revenues.

Hunan Satellite TV has introduced a new drama belt from Monday to Thursday that brands can sponsor called Golden Mango, while Zhejiang TV is rolling out back-to-back episodic dramas with longer commercial breaks in between.

Anhui Satellite TV has been prolonging ad breaks by removing the end credits from some dramas, while Jiangsu Satellite TV has created a new short break by adding an additional program promotional slot at the end of a show.

“The ban on TVCs in between dramas has impacted broadcasters severely, and various stations have endeavored to out-of-the-box thinking to create more advertising opportunities,” says Bertilla Teo, Greater China CEO for media agency network Starcom MediaVest Group.

Program reshuffle

Stations have also revamped schedules, due to new limits on entertainment programs in primetime. Variety shows and reality shows have evolved into big audience drivers in recent years, and channels are moving some later in the evening, effectively extending primetime hours beyond 10pm, while transferring others to weekends, to minimize the revenue hit from the new regulations.

“There have been deliberate attempts to increase cultural programs that promote morality and edutainment,” Teo notes. “However, such programs generally do not draw as much ratings as the weekend entertainment and variety shows.”

The latest wave of regulations, reflecting government priorities at the start of a new five-year planning cycle, triggered some ratings volatility at the start of the year, with popular satellite channels such as Anhui and Jiangsu suffering double-digit year-on-year declines, though national broadcaster CCTV improved its audience share with a 10% year-on-year gain.

These changes were also announced after many MNCs had approved annual media budgets, prompting some to trim planned geographic expansion, though others were able to secure additional funds from global HQ.