Creative challenge

 

Foreign advertising agencies find opportunities aplenty in China's fast-changing landscape

It is a long-held myth that when fast-food chain KFC arrived in China and translated its signature "finger-lickin'-good" slogan it ended up actually telling customers to "eat their own fingers".

It is an advertising pitfall often cited as a warning to Western brands wanting to launch their products in the world's fastest-growing consumer market.

Catchphrases lost in translation are just one obstacle faced by advertisers trying to help businesses carry their corporate message across oceans, but for those willing to take the risk, the possibilities are endless in a market where revenues have reached an excess of 343 billion yuan ($54.6 billion, 42.8 billion euros).

"You can't have stars in your eyes when you come to China - you have to come here very cool-headed, with a keen eye and you need to make sure you have the right resources within your agency to succeed," says Tom Doctoroff, CEO of Greater China for the US-based advertising firm JWT and author of What Chinese Consumers Want.

As Chinese are set to make up the largest population of consumers globally by 2015, foreign advertising firms are racing to establish or consolidate a foothold in China's fast developing advertising market by acquiring local firms to help cross the cultural divide.

Advertising sales have seen a jump by more than 1,000 percent in just more than two decades with estimated sales of 120 million yuan when the industry was first established in the early 1980s compared with 234 billion yuan in 2010, according to a report by China-focused investment banking and asset management company My Decker Capital, released earlier this year.

Currently, the industry is enjoying a growth rate of about 15 percent - more than twice the rate of China's GDP growth.

"In many ways the Chinese market is still quite unsophisticated," Doctoroff says.

With local advertising companies working in TV, print and digital media often using their connections to get discounts on advertisements, it is hard to tell exactly how much actual money the advertising industry is worth, he says. "Nobody knows just how big it is exactly."

But one thing is certain - the industry is growing fast and opportunities for foreign firms are flourishing.

While foreign advertising firms traditionally catered to multinational corporations and China's largest companies seeking to tap into the Chinese consumer's penchant for buying foreign brands, an increasing number of domestic businesses are turning to the Big Six advertising agencies to take their brands global.

The Big Six in terms of size in the world are the US-based Omicom, London-based WPP Group, New York-based Interpublic Group, Paris-based Publicis Groupe, Tokyo-based Dentsu and France-based Havas Suresnes.

"Local Chinese brands are slowly starting to look to multinational agencies for more and more support," says David Hunt, general manager for the Shanghai operations of AKQA's, a New York-based advertising firm and a Chinese advertising industry veteran.

"In order to do that, they are going to have to work with multinational agencies because a lot of the local agencies don't have support overseas."