Good relations

Although public relations (PR) and advertising are still emerging industries in China, local communications firms are grabbing attention and investment from some of the sector's global leaders.

Early last month, Omnicom Group, the world's largest advertising and communications holding company, announced in Beijing it has formed a partnership with Shunya Communications Group, one of China's leading communications companies, following Omnicom's previous investment for a minority stake in Shunya.

The alliance is considered a shortcut for both partners - the international group will strengthen its foothold in China, while the local firm will go more global.

The agreement means Shunya's four principal agencies - ShunyaInternational Ad Inc, Shunya PR Inc, Shunya International PR Inc and Shunya Profuture Events Marketing Inc - will join big names like BBDO, Pleon, Porter Novelli and Proximity under the Omnicom umbrella.

The local agencies will be majority-owned by Shunya, but both parties declined to disclose what the portion is.

The association will bring together Shunya's local expertise and Omnicom's global capabilities across a broad range of advertising, marketing, PR and event marketing services.

"This strategic partnership with Omnicom's leading agencies opens the door to significant opportunities for both parties," says David Zhang, Shunya's founder and chairman.

"By integrating global resources, talent, team strength and cultures, and creating more effective communications capabilities, the Shunya-Omnicom partnership will help improve communication, deepen mutual understanding and eliminate unnecessary barriers to building a more harmonious business and social environment," says Li Daoyu, chairman of China International Public Relations Association (CIPRA).

Since its establishment in 1999, Shunya has been one of the fastest-growing communications groups in China.

"I am confident that the leadership of Shunya in premium and high added-value services will be further strengthened by bringing together the capabilities of both parties across all advertising and communications disciplines," Zhang adds.

Omnicom opened its China office in 2004, then followed with series of local acquisitions, including Beijing Guoan Advertising Corp, Shanghai Unisono Fieldmarketing Co Ltd, Sichuan Southwest International Advertising Co and Consultech.

"Omnicom continues to be very ambitious in China. Our agencies have gone from strength to strength by focusing on offering the best creative solutions to their clients. This strategic investment in Shunya underscores our commitment to creativity, as Shunya is recognized as the strongest integrated communications group and the most creative local brand in China - as such, they are perfect partners for Omnicom agencies," says Michael Birkin, Omnicom's vice chairman and chairman and CEO Asia Pacific.

"The pace of development of China's advertising and communications industry over the last few years has been nothing less than remarkable, and we have witnessed the emergence of significant Chinese communications groups such as Shunya," adds Serge Dumont, Omnicom's senior vice-president and president Asia Pacific.

"This partnership is particularly meaningful as top-quality marketing and communications services become increasingly important for multinational companies in China and Chinese companies expanding abroad. It also allows BBDO, Pleon, Porter Novelli and Proximity to tap into Shunya's comprehensive network in China's interior provinces that are key to our clients," Dumont says.

Shunya, with nearly 500 employees, is headquartered in Beijing with branch offices in Shanghai, Guangzhou and Chengdu.

"Integration and innovation are the key trends in this age of economic globalization. The Shunya partnership with four famous Omnicom brands will strongly support the development of the Chinese communications industry in professionalism, standardization and internationalization," says Liu Libin, chairman of China International Advertising Association.

"It is also meaningful to see that Shunya took the majority stake in the partnership, which again reflects the confidence and foresight of leading Chinese brands in the international integration trend. We all look forward to seeing how Shunya will innovate and develop itself in the new partnership," he adds.

Shunya's CEO Joan Ren tells China Business Weekly that through the connection Shunya will bolster its investment in talent development, client results and business innovation.

"Our employees will benefit professionally through the increased exposure to Omnicom agencies' global networks. We will continue to capture opportunities in the world's highest growth market," Ren says.

The partnership is not the first of its kind in China. Early in 2002, Ogilvy, a top-five communications group, formed a joint venture with H-Line, the China's first PR agency that was founded in 1994.

Last September, the Daniel J. Edelman Group (DJE) Group took a majority shareholding in Pegasus.

Pegasus caters to domestically listed companies with a focus on financial communications through its offices in Beijing, Shanghai and Shenzhen.

"I see great opportunities for us to serve multinationals in China and to help major Chinese companies as they go abroad," Daniel J. Edelman, founder and chairman, says about the acquisition.

"The addition of Pegasus to our family adds tremendous depth and geographic reach to our consumer marketing communications offered in China," says Edelman Asia-Pacific President Alan VanderMolen. "With Pegasus now on our team, we have a platform for accelerated growth nationally, in particular in the consumer marketing arena."

"We were attracted to Edelman because of its independence, innovation, client services and corporate culture," says Steven Cao, managing director of Pegasus Communications. "In joining the world's largest independent PR firm, we are providing our clients and employees access to Edelman's global reach, expertise and intellectual property."

With the addition of Pegasus, DJE now as 200 professionals on the mainland

According to CTR Marketing Research, China's advertising market had a value of 287.5 billion yuan in 2006, 18 percent higher than the year pervious. Statistics from CIPRA show PR industry revenues reached 8 billion yuan in 2006 and continue to grow 30 percent annually.

(China Daily 02/02/2008 page6)