China is at a tipping point when it comes to valuing the role of advertising. Why?
There are three big reasons. First, China is keen to encourage its middle class consumers to stop saving so much and start spending more in order to kick-start the economy. Economists in China recognise that advertising boosts consumer spending.
Second, China wants to be number one in the world for advertising, and is aware that the current ratio of advertising spend to GDP in China is low relative to competitors like the USA and Japan, so it is keen to encourage growth.
And third, Chinese brands want to overtake Western brands, not only in China but also in the rest of the world. They are beginning to understand the need to outspend their competition in order to build market share.
In general, the Chinese advertising industry's approach has evolved from being about mergers and acquisitions towards partnership and brand-building.
During Export Month in March 2019, the Institute of Practitioners in Advertising and the Advertising Association, together with the Department for International Trade, went on a trade mission under the Promote UK banner to the Shanghai International Advertising Festival (SHIAF).
At a VIP Client dinner hosted by the IPA/AA and DIT, UK agencies were joined by an impressive array of clients eager to make their acquaintance.
Attendees included: Tsingtao beer, Xiaomi mobile phones, C-trip travel advice platform, SINA technology platform, iQYI – a cross between YouTube and Netflix for China; Mengniu dairy products.
Other business development opportunities were forthcoming from client representatives in the audience at our China/UK Global Brand Forum day.
The role of a trade association and professional institute in facilitating business development in China is not to be underestimated.
Membership status provides a mark of quality and trust. The trade association can open the door to business relationships. The private visit our delegation made to the Shanghai Motors showroom during our week-long tour was facilitated by the Shanghai Advertising Association and the agency which serves Shanghai Motors, an important state-owned enterprise.
Without the association's support we would not have achieved an introduction. The same can happen in reverse. The IPA message about opening the door to trusted agency advisers in the UK is significant in China. IPA agency member Feref, in particular, reported how the IPA endorsement at the VIP dinner helped it to strengthen business relationships in the days that followed.
The IPA can also act as a strategic ally to agencies in driving a central message about UK expertise in helping clients deliver profitable brand growth for China brands and businesses.
At our VIP dinner with clients we started the evening with an IPA presentation comparing and contrasting brand-builders and brand destroyers in Western markets, in order to present the opportunity for China brands to go global through the UK. It was well received.
Participants in our one day UK/China Global Brand Forum, at which our agency delegation members were offered a platform or panel, came away with the following key learnings about how to be successful in China.
Focus on brand-building not product selling. In particular, be distinctive, consistent, and resonant.
Be idea-led, but in your own way.
Be strategic not just decorative.
The UK should learn from China’s technology-enabled culture and its attributes such as its focus on integrated marketing solutions, its adoption of face and voice recognition, can-do mentality, emphasis on collaboration not competition, and the importance placed on continuous innovation.
China, like the UK is a mobile first communications economy. Short-form content and gamification have a big influence on the style and nature of brand communications. Yet, there is also an appetite for longer-form emotional advertising.
Agencies like Imagination, R/GA, and The Specialist Works benefited from networking and co-presenting with their Chinese associates. They met with existing and new clients to promote UK/China collaboration. Agencies like VCCP, London Advertising and Gain Theory arranged one-to-one meetings on the back of introductions made at the one-day Forum and VIP dinner.
Others, such as Across the Pond, Feref and Crowd, used the opportunity to invite their clients in China to extend this relationship to the agencies' UK networks.
Three of the 14 agencies on the mission are now looking to open offices in China; and at least two new business pitches were engineered during the mission.
VCCP also became the first UK agency to win at the SHIAF Creative Awards, with a Silver for its work on Easyjet's ‘Learn and Play’ campaign.
There is no doubt that the UK advertising sector has increased its profile with the China marketing and advertising community. Our China/UK Global Brand Forum was viewed by over 750,000 people via the SHIAF live streaming service, in addition to the 300 people in the room.
The IPA will be consolidating its relationship with SHIAF to develop the Promote UK programme for 2020. In the interim, the AA and DIT are creating opportunities to expand UK/China co-operation in June at the Cannes Lions International Festival of Creativity in June 2019, and the IPA is preparing to sign a Memorandum of Understanding with the China Advertising Association.