AD AGENCIES AND ADVERTISING IN CHINA

According to Mind-Share, advertising in China reached 128,000,000,000 RMB in 2004, an increase of 20% over 2003. The numbers will keep growing. It is expected that China will be the third largest advertising market in the world by 2006.

At the end of 2005, the restriction requiring joint ventures  with Chinese companies will end as part of China's entry into the WTO. That "will be liberating for a lot of agencies that have been boxed in with a bad or mediocre partner," says David Droga, global creative director for Publicis Group.  

However, International ad agencies face lots of challenges. One of those is the competition with 80,000 local ad shops. One is the press of limited human resources "The biggest problem we have is finding more people to hire and keeping the ones we train," says Shelly Lazarus, Chairman of New York based Ogilvy and Mather Worldwide.

Another challenge for international as agencies is the difference between coastal cities and the interior. For example, a daily regimen of skin care with Oil of Olay is popular with Shanghai women, while Urumqi women need Safeguard soap and Crest first. That means the agencies have to seek out local expertise to make different strategies fit different audiences.

Besides, most Chinese value low price and reliability. Ads that express a straightforward message win great success in China, such as Gai Zhong Gai, a brand of calcium tablets. In addition, some commercials work well elsewhere in the world, they don’t translate well in China.