As China opens up, big agencies are rushing in to capitalize on the world's biggest market.
By Robin Haller
China's advertising industry is on fire and has been for more than two decades. The numbers underscore this fact: in 2004, a total of $31.5 billion was spent on advertising in China, which represents a 32% growth over the previous year. There are 100 million people online, and in a few years China is set to overtake Germany as the third-largest advertising market in the world. So how are foreign agencies operating on the mainland doing? And what's the view like from Beijing?
From communism to capitalism
Nils Andersson, ECD at Ogilvy & Mather Beijing, recently arrived in the Chinese capital after a 3-year stint at TBWAChiatDay in Tokyo. He says it was during his time in Japan that he realized China was quickly becoming a center of gravity for Asian advertising. "China is where the growth is, where the optimism is, where the smallest thing you do is going to get talked about," says Andersson, echoing a sentiment shared by many others in the industry. "If you do anything different, it will cut through because there is so much similar work out on the streets here. It's all happy, smiley people holding products. So the landscape looks quite similar. If you break with that convention, then you'll be seen more easily than in other markets."
China's advertising industry has maintained double-digit growth for almost 25 years now, starting more or less from scratch at the beginning of the 1980s. But despite the breakneck speed, the industry here is still far from mature, and creative as well as technical standards still lag behind more developed countries in Asia. Dean Sciole, Strategic Planning Director at Saatchi & Saatchi Beijing, points out that advertising as we know it has only been around for 10 to 15 years in China and has its creative roots in the propaganda posters of China's recent socialist past. The tone of advertising is still progressing from educating the public to entertaining them. "If you go back 5 or 10 years, some of the earlier stuff we did here was really education based, and they ate it up," says Sciole. "Now you're seeing in the more sophisticated markets, Beijing, Shanghai and Guangzhou, it's changing from more information and education to entertainment which is really what it should be about, and building brands."
Reaching out to a 1.3 billion audience
What are some of the challenges facing foreign firms setting up in China? For one, the country's 1.3 billion potential consumers are spread out across an incredibly diverse range of cities and towns. The big three cities, Beijing, Shanghai and Guangzhou, are all fairly international with the highest levels of wealth in the country. As you move to the smaller and less cosmopolitan second- and third-tier cities, very different communication strategies are required. On top of that, most provinces speak several different languages in addition to the national language (Mandarin), with strong areas of regional identity in Guangdong (where people speak Cantonese) and Shanghai (where they speak a local language unintelligible to everyone else in the country).
Communicating with consumers across such drastically different environments is problematic and agencies have to be very careful not to aim above or below their target audience's heads. An intelligent, witty campaign might work in the big three cities but as you move to smaller and less international cities, you have to be careful not to be too clever. "It's still heavy education to the point where if it's too humorous, it's a bit distant and you're not going to get the message across," warns Sciole. "So it's an interesting dynamic which is different from anywhere else in the world because of where advertising came from."
To read more about our story on China, pick up a copy of the Spring 2005 issue of one. a magazine, available in May.