What Top Digital Agency CEOs think about China

Top Digital Agency in China

Not everyone familiar with the Chinese market is so optimistic.

Among the not so optimistic is Bessie Lee, CEO of WPP China, which has revenues of $ 1.2 billion. (WPP's revenues for Greater China, which includes Hong Kong and Taiwan - which are not part of Lee's mandate - are $ 1.65 billion.) She is also the founder and executive director of withinlink, an independent strategic incubator of Startups on the mobile, e-commerce and social media that was launched in January this year.

While "between 10 and 15 years ago multinationals considered China as the engine of growth," he points out, the economy began to slow down three years ago and has been hit by the anti-corruption campaign initiated in 2013 by President Xi Jinping, Affected negatively To the luxury goods industry in China. Lee estimates that the global income of luxury goods sellers, who have derived about 30 percent of their Chinese donation sales-now proscribed by the government-have declined by 10 to 15 percent as a result of this new politics. Chinese food and beverage companies, as well as real estate and automotive categories, have also been affected.


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The Chinese economy 

CEO, for example, says he does not see the Chinese economy returning to double-digit growth in the short term and, in fact, anticipates that the advertising market will grow only 3 to 5 percent over the next five to 10 years. "People will have to look for new growth areas, which means they will need to acquire Chinese advertising companies, especially in second- and lower-level cities," he says. Proctor predicts that the chances that the new media or agencies successfully entering China have become, to use his word, low.

The Chinese digital market 

We encounter the Chinese digital market many times. I often find that there are more questions than answers when it comes to getting closer to the market and the consumer. Do not fear, it can be done. It is key to remember: I am writing this from a digital marketing perspective. Establishing a business in China, compliance, taxes, distribution, etc. are out of my reach, and are always independent market challenge. So for the moment, let's focus on ways to test digital marketing ideas within the market.

Digital without representation.

The first major barrier is to understand how media are bought inside and outside China. One of the most important factors is taxation. As a foreign entity, buying media in China is a fairly strong tax (can be up to 30%). To avoid this there are a number of China-based services, based in China, that can buy media on behalf of foreign entities. Do your research on these offers and make sure that you feel comfortable with the fees, charges, ways of working, etc. Happy to help out here.

SEM. online advertising 

 The easiest barrier to overcome, creating a Baidu account is actually quite easy and turnkey. It is also easy to try smaller ones and really get an idea of ​​what kind of brand value you have in the market. As always, launching is easy, but there are definitely considerations for launch.

Baidu is huge. 

The largest search engine, in one of the largest economies in the world, and money can go fast. Make sure you have a very structured test to try to get the most out of your money as the sea is possible. Mobile first. China is arguably the largest and most mobile country in the world, so be prepared for that. If your mobile experience is not great, chances are your results will suffer. Counterfeit product. You need to keep an eye on the SEM landscape. There are more counterfeit / resale items in China than many other markets, especially compared to the US. You can send these fake sites to Baidu as you would with other search engines. The answer is usually quick.

Digital Spending in China 

More specifically, eMarketer estimates that digital spending in China (the world's second largest digital ad market) will rise to $ 31.03 billion this year, up 30 percent from 2014. The firm also forecasts that disbursements The country's digital revenues doubled in 2019, when nearly 60 percent of total spending was devoted to digital, making digital investment in China the largest in the world.

Digital = Innovation & Technology in China 

Gentlemen Agency 

Given China's recent conversion to digital technology, China has largely done the desktop-based digital explosion and launched directly into mobile-based communications. As a result, Gentlemen Marketing Agency estimates that mobile advertising spending doubled this year, reaching nearly $ 16 billion, while public spending reached about $ 21 billion.

Much more modest boys are called for radio (8 percent), while newspapers and magazines are expected to decline as digital branches increase and popularity, reflecting the impression view in the rest of the world.
Finally, Gentlemen Agency also predicts that outdoor advertising grows steadily due to "the growing movie market and emerging development in Tier 3 and Tier 4 cities."

Omnicom Group

For his part, John Wren, president and CEO of Omnicom Group, compares the optimistic outlook on China. The country's economy, given, "continues to grow into a healthy clip that is more stable and sustainable, [and now] is being labeled as the new normal." It's still a long track for growth ahead. "

Omnicom - with more than 30 branded agencies operating in China, employing about 3,000 people and a strong public expenditure in the telecommunication, travel and personal care categories, given by Wren. An example for this growth is Apple, one of Omnicom's largest customers in China. Wren says the tech giant has enjoyed the record sales of the iPhone 6 and is adding 20 new outlets next year. Yichi Zhang, co-founder and CEO of McGann Zhang, a seven-month-old agency based in Los Angeles and Beijing, believes the entry of Apple Music and iTunes into China indicates maturity in the market. Ironically, it is the presence of more regulation in China that makes the apple as a global brand feel more comfortable, given Zhang. One of the possible hurdles, at least as Wren sees, is "slowing growth rates in China," which, he says, "means that customers are faced with pressures to cut costs. It will be limited."

IPG Media

Henry Tajer, executive director of IPG Media, Interpublic's global media company, finds "some lagging behind in China by local and multinational advertisers." Including what is happening in Europe, as well as the impact on Business in China. source

Tajer, whose main body of experience in the agency is in the Asia-Pacific region, believes that the media is "protected to some extent" in China because of its organic growth strategy. "We do not feel excessively widespread in China," he says. "This gives us confidence when we look at macroeconomic conditions."

Publicis China 

Publicis CEO Maurice Levy discuss advertising in China. They speak with David Gura at the Allen & Co. Sun Valley Conference in Sun Valley, Idaho on "Bloomberg ‹GO

check the Video on bloomberg

 GroupM 

For Dominic Proctor, Chairman of GroupM Global, maintaining all WPP news agencies, the correction in the Chinese economy is "minor." It adds that this economy "continues to grow. There is no significant impact on the global operations of advertisers.

"By way of example," he continues, "consider the case where China is the 10 percent budget of a global marketer." A slowdown in economic growth of one point or less is of negligible impact. "