A lot of us are missing an important point about China Central Television (CCTV). The new CCTV building is stunning, indeed iconic. But far less noticed than the scale and architecture of their new headquarters is the location of the building and what that means for the advertising industry.

CCTV headquarters has long been on the west side of Beijing, on a massive piece of property next to West Third Ring Road. CCTV’s neighbors included a research institute, the Military Museum, the massive office block built for the Central Military Commission, and a monument to the return of Hong Kong to the Motherland.

If you were an advertiser or somebody else seeking to gain attention through the good offices of the national broadcaster, you made the long trek around north Third Ring, or you suffered the traffic on Chang’an Road, passing on your way the monuments of Tian’anmen, the portals of the Zhongnanhai leadership compound, and the compound housing the State Administration of Radio, Film, and Television (SARFT).

In short, the whole experience for an advertiser was something of a pilgrimage designed to remind you that the central broadcaster was part of the nation’s political structure, and that no matter how much money you brought, CCTV carried the power in your relationship with it.

The new headquarters makes a different type of statement. And that is not accidental.

The broadcaster has picked up and moved itself all the way across the capital, a physical journey of 13 kilometers but a psychic journey of a far greater distance. The long journey for advertisers is no more. CCTV has come to you.

No longer ensconced among monuments and government offices, CCTV now stands amid Beijing’s toniest office blocks and next to the eye-catching Mandarin Oriental Hotel. Being nestled in the corridors of political power sends a message inappropriate to how CCTV wants - needs - to be seen. Despite its continuing function as the voice of the party, CCTV is now a commercial entity, dependent on the patronage of enterprise for its sustained success and power.

And not a moment too soon.

As CCTV’s work force moves into the new building, they will do so as the cream of the broadcaster’s audience is looking beyond television for diversion, as advertisers shift spend to a widening mix of media, and as TV faces new pressures to prove its value as a marketing tool.

So as you drive past - or to - the new CCTV headquarters, keep in mind that as much as the edifice celebrates the organization’s pride and success, it is also the symbol of the humbling of a giant, and a harbinger of a new era that will focus the broadcaster on serving its advertisers rather than being served by them.

One of the leading diversions of advertising people in Beijing and Shanghai these days is speculating on the effects the global economic downturn is going to have on the regional ad business. Depending on who you talk to, predictions range from a “mild dip in first quarter revenues” to “it’s the apocalypse!”

Regardless of what happens to spend in China, one trend is already clear: advertisers are looking for ways to get much more for their RMB in 2009 than they got in 2008. Pacific Epoch’s Jim McGregor and About.com China’s Matt Roberts call this a “flight to value.”

Many people in the industry have begun interpreting this trend to mean a shift away from TV, outdoor, and print and toward digital. That might happen, but at best this is an oversimplification. To really understand what will happen, you first have to recognize that when it comes to how clients define value, there are essentially three kinds of advertisers in China:

The first kind thinks of “value” as being synonymous with return on investment. The better the measurable results for the company, its business, and its brand for a given level of spend, the greater the value.

This is the kind of advertiser who is going to experiment with new media, who is going to be the most skeptical about traditional media, and who we all usually think about when we talk about rational marketers. Sadly, this group forms a smaller fraction of the Chinese advertising market than should be the case.

The second kind of advertiser takes a more simplistic approach. Value means “price.” The less money I pay per unit of media, the higher the value I get. As long as real rates fall or at least remain stable, value improves.

The third kind of advertiser derives value from relationships. Either he or she trusts the media based on previous results, or they place their blind faith in that medium - or a specific company - because they know there is a little red envelope in it for them personally after their company pays the fees.

The latter two types still make up a large portion of the advertisers in China. To believe these groups are suddenly going to make a shift to digital or any other buzzworthy communications channel merely because they will offer better results is unrealistic.

What all of this means is that the flight to value will take five forms among the advertisers that neither collapse nor pull out of the market entirely:

• Some advertisers will take the downturn as an opportunity to experiment with their media mix, shifting their spend away from their core media to other media;
• As the downturn is liable to soften rates across much of the core media (including, but not limited to, regional television and print), other advertisers will take advantage by buying more of that media than they had before;
• Some advertisers will make no change at all, believing they already have the right mix and sticking with it;
• Other advertisers will stick with their current media choices because the decision-makers profit personally from the choice;
• Other advertisers - including some from the above groups - will pull budget out of advertising altogether and spend more on other forms of marketing.

When you deconstruct the audience, it is clear that there will be opportunities for nearly all media next year. The challenge will be to match what you have to offer with the clients who are interested in your particular pitch.