On Cannes: Cracking the China Market

Cesar Vacchiano de la Conception of Grupo Consultores and ShuFen Goh of R3 Asia Pacific surveyed more than 500 advertisers in China and 100 local and multinational ad agencies in China for their study "So You Want to Know About Chinese Advertising?"

The results were released outside of China for the first time at the Cannes International Advertising Festival.

Portfolio.com: Much of the talk here is about fully integrated advertising. How is China faring in this?

ShuFen Goh: In China, the clients know that you have to communicate this way with every job. It's hard to present integration in a case study here, which is why we show a lot of TV ads. But the reality is that every campaign we showed today is fully integrated. For instance the Coke Olympic commercial we showed, there is a whole host of agencies, activation, digital, etc. that are going to make that happen across all mediums.

Portfolio.com: So is China leapfrogging in integrated advertising as well?

ShuFen Goh: Absolutely. You saw the mobile figures. With some projects we are activating messaging in 100 cities of more than one million people for whom the mobile is their primary source of information.

Portfolio.com: To what do you attribute China's absolute premium on creativity?

ShuFen Goh: Wise marketers know that this is one of the few things that they can't do themselves. With other tasks, many Chinese think, "Maybe I can do this just as well." They go to agencies for the creative first and foremost.

Portfolio.com: Do you see a link between the short duration of client-agency relationships and the trend toward project by project compensation? And is that a trend that will seep into other global markets?

ShuFen Goh: I see it happening. In fact relationships are getting shorter everywhere. There's not enough of looking at processes and analyzing and building the marriage.

Cesar Vacchiano: In other regions they switch because of client services but in China it's all about creativity.

Portfolio.com: Pully Chau (C.E.O. of Saatchi & Saatchi, China) was talking this week about her goal of building everlasting relationships in China with lovemarks, yet the clients aren't building lasting relationships with their agencies. Won't this have an adverse long-term effect on brands in China?

ShuFen Goh: S&S says this about P&G but I bet they would be hard pressed to talk about a local Chinese client they've had for more than five years.

Portfolio.com: How do you think the larger brands are handling the Olympic ad controversies over Darfur and Tibet?

ShuFen Goh: There is a big difference if you are a local or multinational brand. Local Chinese brands are using this opportunity to galvanize their consumers with national pride. Multinational brands have to do much more to make consumers feel that they are sincere. Because of the Internet consumers know what the reality is, they don't get it from government or corporate propaganda.

Portfolio.com: Now that you're done with China, you're in the process of doing a similar survey for advertising in India. Are you approaching it differently?

Cesar Vacchiano: We are doing it the same. We've already started speaking with several hundred marketers across the country about their relationships with their agencies. If anything it's really easier in India because when we got to China there was no database, which we had to build from scratch. It was crazy. In India, the data already exists.

ShuFen Goh: In other ways they are not as advanced. In India, you go to office parks for Google and Microsoft and Nokia and outside the door is squalor.

Portfolio.com: How about the advertisers themselves?

ShuFen Goh: In India they want to play their game. In China they want to play the world game.

Cesar Vacchiano: In India, the people who work at agencies are very well known, and in many cases famous. In China, they don't really know the agency personnel.

ShuFen Goh: But in India they are like Bollywood stars!

by James P. Othmer

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