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Cracking the China Code
by James P. Othmer
Jun 17 2008
Jun 17 2008
At the Cannes International Advertising Festival, some tips on what works—and doesn't—in the world's most populous market.
Cannes Do
A look at some must-attend events during the Cannes Lions. See All Video & Multimedia
China’s $60 billion advertising market is the third largest in the world. Yet according to a new study by R3/Grupo Consultores, few marketers have a true understanding of what it takes to build brands in the fastest-growing market on the planet.
Over a two-year period ending in March of 2008, R3/Grupo Consultores surveyed more than 500 advertisers and more than 100 global and independent agencies working in China, which only re-legalized advertising in 1978.
The results, discussed at the Cannes International Advertising Festival this week, have broad implications for future marketing efforts with China, and perhaps are harbingers of future ad trends in the rest of the world.
One surprising finding: In a country where marketers strive to elicit loyalty from consumers, the average client/agency relationship is the world’s shortest at less than two-and-a-half years — compared with almost five years in the Europe and the United States.
The No. 1 reason Chinese clients gave for seeking a new agency is a lack of creativity (in the U.S. it’s a dissatisfaction with service). In fact, 85 percent of Chinese advertisers said that creativity matters most — more than anywhere in the world.
The survey said that most brands look to multinational agencies for high level creative, and local shops for a better understanding of the complex and varied Chinese demographic, which is to be expected in a country 102 cities of more than a million people, and still a 70 percent rural population.
Also of note is the finding that project-based, rather than fee-based compensation for work is more common in China than anywhere else. This is trend that ShuFen Goh, Principal of R3 Asia Pacific, feels could be related to the premium placed on creative and will become more prevalent in the rest of the world.
(An excerpt of her talk with Portfolio.com can be found here).
The study busts the myth that Chinese marketers are playing catch-up with the rest of the world. Goh says she found that China is actually playing leapfrog, bounding past conventional global marketers in some areas.
This is best exemplified with the phenomenal growth of mobile phones as a means of communication – and a prime advertising opportunity. China Mobile, the world's largest cellular provider, has 530 million subscribers, and it adds as many subscribers each month as there are people in Portugal.
“The first button a child pushes in China today isn’t the television, radio, or computer; it’s the mobile,” Goh says. She predicts the world will soon be playing catch up to China when it comes to mobile advertising.
In addition to grasping mobile’s jaw-dropping potential and the importance of creativity, advertisers in China should also note the tension between tradition and transformation in the 5,000-year-old culture. This includes a rise in using blogs, chat rooms, and other interactive branding technology as an outlet for social expression.
According to the study, the most dynamic multinational brand in China is Coke.
The most admired is Procter & Gamble.
Daniela Riccardi, greater China president of P&G, said her company's status should be no surprise. Procter will be celebrating its 20th year of having an advertising presence in China this August. That is about eight times longer than most ad relationships there.
Over a two-year period ending in March of 2008, R3/Grupo Consultores surveyed more than 500 advertisers and more than 100 global and independent agencies working in China, which only re-legalized advertising in 1978.
The results, discussed at the Cannes International Advertising Festival this week, have broad implications for future marketing efforts with China, and perhaps are harbingers of future ad trends in the rest of the world.
One surprising finding: In a country where marketers strive to elicit loyalty from consumers, the average client/agency relationship is the world’s shortest at less than two-and-a-half years — compared with almost five years in the Europe and the United States.
The No. 1 reason Chinese clients gave for seeking a new agency is a lack of creativity (in the U.S. it’s a dissatisfaction with service). In fact, 85 percent of Chinese advertisers said that creativity matters most — more than anywhere in the world.
The survey said that most brands look to multinational agencies for high level creative, and local shops for a better understanding of the complex and varied Chinese demographic, which is to be expected in a country 102 cities of more than a million people, and still a 70 percent rural population.
Also of note is the finding that project-based, rather than fee-based compensation for work is more common in China than anywhere else. This is trend that ShuFen Goh, Principal of R3 Asia Pacific, feels could be related to the premium placed on creative and will become more prevalent in the rest of the world.
(An excerpt of her talk with Portfolio.com can be found here).
The study busts the myth that Chinese marketers are playing catch-up with the rest of the world. Goh says she found that China is actually playing leapfrog, bounding past conventional global marketers in some areas.
This is best exemplified with the phenomenal growth of mobile phones as a means of communication – and a prime advertising opportunity. China Mobile, the world's largest cellular provider, has 530 million subscribers, and it adds as many subscribers each month as there are people in Portugal.
“The first button a child pushes in China today isn’t the television, radio, or computer; it’s the mobile,” Goh says. She predicts the world will soon be playing catch up to China when it comes to mobile advertising.
In addition to grasping mobile’s jaw-dropping potential and the importance of creativity, advertisers in China should also note the tension between tradition and transformation in the 5,000-year-old culture. This includes a rise in using blogs, chat rooms, and other interactive branding technology as an outlet for social expression.
According to the study, the most dynamic multinational brand in China is Coke.
The most admired is Procter & Gamble.
Daniela Riccardi, greater China president of P&G, said her company's status should be no surprise. Procter will be celebrating its 20th year of having an advertising presence in China this August. That is about eight times longer than most ad relationships there.
Mobile
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