China Special: Overview

Compared with the breakneck pace of growth and change in the Middle Kingdom’s other industries, China’s ad industry is still finding its feet – particularly on ever-moving digital platforms. But with daring developments in mobile and social, and marketers embracing product innovation, there’s a quiet optimism that the best of China is yet to come...

It’s hard to escape advertising in Shanghai. It lights up the night sky from towering electronic billboards in People’s Square and blares out at ear-splitting volume from televisions in the back of taxis. And yet the locals seem oblivious.  Whether navigating a pedestrian crossing, crammed sardine-like inside the metro or out for a romantic dinner date, every single person’s gaze is fixed on the small, glowing screen of their mobile phone. As Fred Raillard, co-CCO of Fred & Farid Shanghai, points out: “In China, you will learn nothing from walking around the streets. The real world is online.”

When shots last examined China’s advertising scene in 2013, uncertainty prevailed about when, and if, the three major barriers to creativity– risk-averse clients, a culture of copying and a lack of native talent – would begin breaking down. Digital media, rather than its traditional counterparts, was universally tipped to drive the industry forward, thanks to the surging popularity of domestic digital platforms such as Weibo (China’s Twitter), Youku (its YouTube equivalent) and mobile messaging service WeChat. Fast-forward two years and sure enough, there has been “a huge shift of traditional advertising dollars into digital and social executions,’ says Eugene Chew, JWT Shanghai’s chief digital officer. “Brands are basically following consumer behaviour: the time spent on mobiles has gone through the roof, and time formerly spent watching TV has switched to digital.” Cheap domestic phone brands have fuelled an explosion in mobile usage: an official government report, released earlier this year, found 86 per cent of China’s 649 million internet users were using their smartphones to get online.

WeChat... and we also create

The balance of power in China’s digital platforms has also shifted. With over 549 million subscribers, the mobile-optimised WeChat, with its PC-friendly interface, has toppled Weibo and is radically changing the way brands and agencies talk to consumers, flattening out communication between the different ‘tiers’ of cities in China and democratising creativity. “People are starting to produce and publish their own content – with the digital platforms, everyone can be their own media,” explains Fan Ng, chief creative officer for Saatchi & Saatchi North China.

Collaboration and crossover – both with individuals and digital platforms – has become the name of the game for agencies. Two recent successes include Fred & Farid Shanghai teaming up with Tencent Maps [China’s Google Maps] for ME&CITY: Fashion Street View and Publicis Guangzhou working directly with WeChat for The Voice Donor, a campaign encouraging WeChat users to ‘donate’ vocal snippets for audio books for the blind by reading sentences through the app’s voice-recording function. 

While digital’s lower budgets may generate creative experimentation in other parts of the world, opinion is divided as to how far this applies in China. Quality has certainly suffered as a result of China’s obsession with speed and quantity, says Fei Wei, FCB’s chief creative officer for Greater China: “Because you do everything so fast, it all becomes a bit mainstream.” 

Which goes some way to explaining why, despite China’s increasing presence at international awards shows, its digital work has been largely ignored by juries. China’s two Grands Prix were both for print campaigns, as were its big winners in 2014, Penguin Audiobooks  and Buick’s Human Traffic Signs. Some insiders blame ‘outdated’ categories that ignore China’s pioneering social developments; others, the entrenched language barrier that clever wordplay, so effective in Chinese advertising, can’t break through. “The most brilliant campaigns [on social media] use new words, a social language which resonates with young people but is impossible for people outside of China to understand,” says FCB’s Wei. “If the story is very local, very Chinese, then all the locals are going to understand and relate to it, and it will do well in China – but it’s quite difficult to translate to an international jury,” adds Graham Fink, CCO of Ogilvy & Mather China. At Cannes this year, however, there were signs of change, with Ogilvy’s social media campaign – Visit Britain’s GREAT Chinese Names for GREAT Britain, which invited Chinese tourists to invent Chinese names for British landmarks, awarded several Lions in PR.

Adding real, practical value to advertising is one way in which the creative bar could be raised. “Chinese consumers want advertising that changes their lives, that is practical. More and more, it’s this idea of new technology working with advertising that can positively affect the lives of consumers,” says Ng, citing Saatchi & Saatchi’s recent campaign for VICE, which was built around an ‘audio safety’ mobile add-on, Mutesic.

Paul Lin, chief digital officer at Saatchi & Saatchi Shanghai, thinks that China’s digital creativity will manifest itself in innovation, rather than storytelling. “We’ll see new uses of features, or the ability to build wearables; there’s a hardware element to everything that we’re building now.” Practically speaking, this means that agencies are no longer competing just with other agencies, but with app developers and tech companies, too. China’s sole Innovation Lion-winner this year is a case in point: Kuaisou, ‘intelligent’ chopsticks capable of detecting if a user’s food was cooked using bad oil. The company behind the campaign? China’s leading search engine, Baidu.

The digital gravy train slows down

Techy gimmicks are all very well, but agencies should not lose sight of what it is that they do best. Leong Wai Foong, CCO of BBDO Greater China, worries that admen are losing focus and being leveraged by digital. “[We can] observe and learn from digital devices and new technology, but at the end of the day, [we need to] remember that these are only our tools,” he says. John So, creative director of VICE Shanghai, agrees: “Digital has been a decade-long gravy train, which has now plateaued because people are starting to realise that it’s not just about digital, it’s about what you put into it.”

Another talking point in 2013 was the lack of native talent, and two years on, it remains a live issue. Compared with the situation a decade ago – when the industry was dominated by foreign creatives from the West and other Asian countries – the situation has certainly improved, says BBDO’s Wai Foong. “Native talent is getting stronger and stronger. The last couple of years have seen many native Chinese promoted to ECD level. [Foreign creatives] still have a role to play, but probably only for the next five years.” 

However, attracting young creatives to the industry is still a struggle. “I think for a lot of really bright young people, advertising isn’t the first thing that they consider,” says Ogilvy’s Fink.  In the West, the ‘brain drain’ to internet giants Google and Facebook has proved a major headache for ad agencies, one that’s mirrored in China, with many young creatives siphoned off by the so-called ‘BAT’ trio of tech companies: Baidu, Alibaba and Tencent. 

Creative consistency is also hampered by what Kien Hoe Ong, ECD of Y&R Shanghai, calls a “lack of [agency] fidelity”. Fink agrees that talent retention is a problem, pointing to China’s “extraordinarily” high churn rate of around 40 per cent. “Money is very important to people, success is important, and the idea of keeping face… People will leave for more money, for a better title. Advertising is seen very differently to how it is in the West, it’s very much a job, not a vocation.” As the market matures, local creatives are also breaking away to start up their own hotshops, such as Andrew Lok’s Civilization. With lower media investment and the fast turnaround times of mobile, social and digital executions, these agile local outfits are competing with larger foreign agencies – both on cost, and, increasingly, on creative. Boutique agency 25hours recently made every agency in China sit up with its brilliant spot for furniture brand Red Star Macalline, featuring US alt-rock band Ok Go. Adam Schokora, whose small Shanghai shop, NeochaEDGE, has just led a global project for Gap, states “there’s a lot of space opening up for all of us. Smaller agencies, more boutique shops, are potentially going to be getting a lot more business.”

Taking risks, but only in a safe place

But are clients more willing to embrace creative risks? Yes – but only in certain spaces. As JWT Shanghai’s Chew points out: “When you’re publishing content weekly or daily, rather than  one expensive TVC, you can always sneak in a couple of really creative ideas.” However, in traditional media there’s no dramatic change. With the economy still growing at a phenomenal rate, brands “don’t need you to come along with this very courageous, different campaign to boost their sales; they’re already doing incredibly well, thank you very much,” explains Ogilvy’s Fink.

When a creative idea does make it out of the cradle, brands’ insistence on research testing, particularly for high media spend TVCs, often waters down the result. “There’s a lot of insecurity in the market, so clients test and re-test everything – so that if anything fails, the tests show that it shouldn’t have,” states Nick Dodet, executive producer at Shanghai-based production house, P.I.G. China.

However, focus groups are no longer spelling automatic death to creativity. International travel and access to the internet are broadening consumers’ cultural horizons, and coupled with a surge in national pride, they are responding to more original ideas. “Previously, Chinese consumers used to look up to foreign countries and aspire to their values. They still do, but now they want their own culture reflected too,” says Saatchi & Saatchi’s Ng. So it’s out with the ‘culture of copying’ – rehashed Western campaigns – and in with fresh content created specifically for the Chinese market.

Product gets a no-no from Han Han

Increasing consumer savviness is also prompting a change in tone from a grand, aspirational style to a more realistic, true-to-life approach. Humour has spread from virals to TVCs, such as Saatchi & Saatchi’s blackly funny Playing Can’t Be Bad campaign for gaming company Changyou. And bland celebrity endorsement, once seen as a quick fix for brands in a cluttered market, has also evolved, as two recent campaigns from BBDO China show. Gillette’s Scandal Shave featured a ‘leaked’ home video of model Gao Yuanyuan getting in a lather over wet shaving, while domestic smartphone OnePlus went the anti-endorsement route, hiring famously critical celebrity blogger Han Han to point out the product’s flaws rather than sing its praises.

That ideological shift has also filtered through to post production. Steven Marolho, general manager of MPC Shanghai, has seen clients’ demands for saturated blue skies and over-airbrushed faces fall. “Five years ago, [Chinese advertising] was glossy, zingy, a running brochure. But consumers aren’t falling for hyper-reality any more. It’s still all very Chinese in terms of storytelling, but the craft has an increasingly global, international feel, because that’s what’s resonating with the consumer.”

On the production side, feelings are mixed. Some are philosophical about the smaller budgets for digital work, seeing it as a payoff for more creative opportunities. Others are less content with the situation. “We need something like a producers’ union,” says Desmond Loh, executive producer at Stink Shanghai. “People complain about the production budgets getting worse, but we’ve done that to ourselves.” A more horizontal relationship between client, agency, production company and post house – and a less servile attitude to clients – is needed if creative standards are to improve. “It’s always a collaboration – we all need to work together to build the idea stronger,” adds Loh. 

Local directors’ diet of leftovers

A more pressing issue is the lack of native Chinese directors, despite the country’s booming domestic film industry – the second biggest in the world after the US. Part of the reason is that big brands with sizeable budgets opt for tried-and-tested foreign directors, who are seen as more ‘premium’. Young Chinese directors get the leftovers, making it difficult to build a reel of high-quality work. And even with good scripts and directing talent, there’s often a lack of support from the production crew, says Loh.

Only a handful of production companies have a roster of exclusive directors. “You have a lot of talented people here, but they need to be identified, because nothing is centralised,” says P.I.G. China’s Dodet. “In London, producers will promote a talented new director to the agency, but in China you don’t have that relationship.” MPC’s Marolho agrees. “If you’re young and you want to be a commercial director, you won’t find much of a support network here.”

At grassroots level some green shoots are emerging. SHP, a rep agency for film professionals which works with China’s major production houses and ad agencies, has launched SHP+, a blog spotlighting rising Chinese directors such as Limin Wang. They also organise the Shanghai chapter of CICLOPE, an international filmcraft festival, and maintain a directory of production companies and post houses. Meanwhile Dodet runs a project identifying young Chinese talents out of film and design schools, helping them to develop spec work and taking them abroad to shoot for foreign clients: “All of a sudden they’re appealing to the local [China] market, because they speak the language and understand the local culture, but have a Western outlook.”

When all is said and done, China still has a long way to go in fulfilling its creative potential – but that’s what makes it such an exciting place to be. “No matter if it’s now or in three years, it’s always going to be tough because the market is huge,” adds Y&R’s Ong. “But there’s a few agencies, a few individuals, that will always push for creative work. The work has improved, and I think it will improve further.” “There’s still a lot of catching up to do,” agrees Ogilvy’s Fink. “But people here are pioneers, and gradually we’re getting there.”