“It’s tough to make money in the advertising business in China” says Momoe Okabe (29), a ten-year Beijing resident who has been involved in the ad industry for six years. She is shortly to leave Grey, where she has been an account manager for the last 3 years, to take up International Account Manager position at J. Walter Thompson in her hometown of Tokyo.
China is a difficult place for agencies for several few reasons, says
Okabe:
“Media buying is badly understood, the market doesn’t value creativity, and the industry is chaotic.” While multinational agencies still have a few advantages over local agencies, mostly because their creative staff have usually seen a lot more different thing than those in local companies, the gap is closing.
She thinks another problem faced by advertising agencies are the huge differences between different markets within the country. There is a gulf between what will work as an advertising strategy in rural areas and what will work in the cities, and that can be a problem for brands such as household products that are widely distributed.
Another issue that agencies and their clients have to deal with is the power of the Internet to make instant PR disasters. An example of this occurred last year when Toyota was forced to apologize for an print advertisement that some Chinese people though was insulting. Thanks to chat rooms and bulletin boards, what may have been a local complaint suddenly became national in scale.
Who will succeed in the advertising industry in China? Okabe says: “It is going to be tough for agencies to survive. The people who will really make money in the advertising industry in China are probably production houses and companies that provide services that are needed to produce advertisements.”