CCTV Removes Advertisements of Online Education Companies

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    China Central Television (CCTV) has removed the advertisements of online education enterprises from its platforms, amid the tightening of policy supervision in the domestic online education industry, as reported by Caixin on April 1. The trigger was that in mid-January, four institutions were exposed to false advertising, as they used the same actor to play as a well-known teacher in their advertisements. In view of this, on January 18, the CPC Central Commission for Discipline Inspection (CCDI) published an article pointing to the chaos of online education. Later, on March 26, a report on the lessening school load pilot work symposium of the Ministry of Education (MoE) mentioned imposing stricter supervision on online education advertising, implying all media shall not broadcast such advertisements either online or offline. Although many large advertising agencies said they had not received any formal documents and regulatory policies have not yet been implemented, according to industry sources, online education institutions have begun changing their advertising strategies.

    The COVID-19 pandemic accelerated the development of the online education industry. According to Sohu, the user scale increased from 104m in 2016 to 423m in 2020, and the market scale expanded from RMB221.8bn in 2016 to RMB500bn in 2020. At the same time, according to the report of China advertising market review in 2020 issued by CTR, online education became a main customer of advertising in the pandemic. Online education related brands were the top 20 brands of traditional outdoor advertising, elevator LCD advertising, and elevator poster advertising. Impacted by the signal of strengthened regulatory supervision, a number of Chinese online education institutions’ stocks plummeted. On March 27, the market cap of three major online education companies, TAL Education Group [TAL:US], New Oriental Education [EDU:US], and GSX Techedu [GSX:US], evaporated by tens of billions of USD. Besides, the stock price of the leading elevator advertising company, Focus Media [002027:CH], which is regarded as the new driving force of online education marketing, also collapsed.

    Sources:

    https://www.sohu.com/a/445778852_252526

    https://www.caixin.com/2021-04-01/101684854.html

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