China in your hands

sfThe recent Olympics in Beijing focused the world’s attention on Chinese culture and also opened the doors for global advertisers. But there are still challenges brands must overcome. By Kate O’Flaherty

The Beijing Olympics gave brands the opportunity to promote themselves to local markets as well as worldwide. And, along with the brands, it was a showcase for China as well, demonstrating not only how diverse its culture is, but how quickly it is trying to change and absorb trends from the West and Japan. This offers great prospects for global businesses, as long as they first appreciate how to best communicate in this challenging market.

MPG International managing director David Goodall says brand owners are “falling over themselves to grab a piece of the action.” He adds that an advertising gold-rush has increased spend levels by about 20% year on year. The media environment in China has mirrored dramatic changes within the country as a whole and, as Goodall points out, “Economic reforms have led to an explosion in the number of media channels and a partial loosening of central Government control has encouraged a new climate of editorial independence.”

The brands that succeeded in understanding the Chinese market and making the most of the Olympic opportunities in Beijing this year were Coca-Cola and Adidas according to Mediaedge:cia (MEC) research. The research, of 1,000 Chinese consumers, into which brand they associated with the Games, found that only Coca-Cola and Lenovo succeeded in raising awareness in more than 40% of consumers. The agency found that Coca-Cola’s success was due partly to its strong above-the-line advertising, where it trebled its monthly spend in the six weeks leading up to the opening ceremony.

Meanwhile, Adidas is estimated to have spent up to $250m (£136m) on its complete Olympics sponsorship and advertising package and by August had built 38% awareness of its brand. Adidas’ success was a result of on-screen presence through branded clothing and consistent Olympics-related advertising in the six months leading up to the games.

Jon Wright, MEC director of MEC MediaLab APAC, says Beijing 2008 was the “biggest and most significant opportunity to date” for brands to capture the interest of Chinese consumers. He adds: “If brands want to maximise the return of their sponsorship they need consistent, integrated advertising strategies.”

Now that the games are over, it is vital to adapt marketing strategies to reflect local and regional conditions, cultural sensitivities and the strength of local media. MPG’s Goodall adds: “One of the most common mistakes made by advertisers in China is to disregard these local differences and instead attempt a one-size-fits-all solution.”

Ancient understandingDynamic Marketing Group (DMG), which is China’s largest independent creative agency, also says China’s culture and scale means the media landscape needs to be approached with care. The agency says it is different from its competitors because it only focuses on Greater China. The agency’s chief creative officer, Dan Mintz, adds that the key to DMG’s success and understanding of Chinese consumers is in its understanding of ancient Chinese culture. It has borrowed from the ancient teachings of Daoism to create “D-Dao”, which is a planning tool. Mintz adds: “D-Dao is like a 2,000-year-old SWOT [strengths weaknesses opportunities threats] analysis that allows us to apply relevance and empathy to the international brands targeting China. We apply cultural understanding and deliver on the back of it.”

Mintz says DMG pulled off a major marketing coup with Nike’s “Zhan Qi Lai” (“time to man up”/”time to rise up”) campaign during the Olympics. Mintz says the highlight came when US Olympic basketball champion Kobe Bryant started chanting the tagline and the fiercely nationalistic Chinese crowd joined in. He adds: “To the crowds and participants Zhan Qi Lai has become an unofficial Nike slogan.”

Mintz believes the event showed how sport transcends boundaries and cultures. He adds: “A sports brand at the Olympics is like a car brand at an automotive show. What you do and say about your brand is how consumers judge you in your own environment. Zhan Qi Lai is representative of a moment in Chinese history.”

One area of particular interest to marketers seeking to enter the Chinese market is outdoor. The Chinese out-of-home market is worth about 11.4 billion yuan (£903m) – an increase of 16% on 2006.

Kinetic global director of insight and marketing Nick Mawditt says outdoor in China has grown substantially over the past decade. Industrial products and toiletries show the highest potential and the poster specialist foresees the growth to continue at 13% and 26% respectively in 2008 and 2009.

Outdoor has also acquired new formats in China, from projections and displays in malls to displays in the country’s new temples. Bus sides and bus shelters are in © demand for their large commuter audiences, while city specific advertisers have been instrumental in driving media spend. However, Mawditt adds: “Success has its own pitfalls – the government often bans outdoor sites as part of beautification drives.”

Outdoor contractor JC Decaux Greater China chief executive Stephen Wong says: “For the outdoor market, the Olympics has had an impact on total media inventory. For the first time in China, outdoor advertising space has been reduced.”

In the build-up to the Olympics, according to CBS Outdoor International, official bodies, such as the Central Government, Police and the City Hall municipal planning bureau, had their say about what was allowed in outdoor. As a result, several hundred billboards, 1,500 newspaper kiosks and 375 phone booths were dismantled.

Wong believes there was some compensation, however, saying that what was lost in terms of quality was made up for by qualitative gains in terms of advertising clutter and impact.

Youth MovementThe demographic that is fastest embracing the new media revolution is, not surprisingly, China’s youth, in the same way as they are embracing western fashion and music trends. The country is already among the world’s leaders in mobile. Mobile gaming is very popular and the use of camera phones is far higher than in most European markets. It is predicted that the country will become the world’s largest internet market within the next two years.

With such a vast and fast-evolving market, it is important for marketers to focus on key areas. MPG’s Goodall says that most advertisers concentrate their investments on the so-called “Tier One” cities of Beijing, Guangzhou and Shanghai, where household income has increased by 150% in the last three years.

He adds that these cities have more in common with London, Paris or New York than other parts of the country. The next area that advertisers are looking to invest in is second and third tier cities and western China, which are predicted to be the next phase of economic expansion.

Although Goodall believes that expats continue to play a prominent role in many agencies, he says that increasingly the real communications expertise comes from the new generation of highly-educated Chinese professionals. And his final words of advice to those working in the market is that they would do well to learn from them. v

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