Advertising is big business in China. When expenditure in the newly-designated Special Administrative Region of Hong Kong is combined with that on the mainland, total 1997 expenditure is forecast by Zenith Media to be US$8.8bn. This will promote China to number six position in the world advertising league. In 1999, China-Hong Kong is forecast to overtake France to assume fifth position ?a remarkable climb since 1990 when the mainland was ranked in 35th place.
If you walk down the street of any city in China today you are likely to be dazzled by the sheer volume of posters and signs exhorting you to smoke a certain brand of cigarette, to drink this or that brand of spirit or to travel on a particular airline. Newspapers are filling up with advertisements as started to hap-pen in television some years ago. Many breaks in prime-time are now filled with 10 or more commercials lasting five minutes or longer.
Around 60 per cent of total advertising is for local brands, partly a result of the persistence of discriminatory pricing outside Shanghai, where the practice has been outlawed. Discriminatory pricing has been reduced in a few cities, including Beijing, but in many areas foreign advertisers must still pay up to 100 per cent more than local advertisers.
In a large-scale research study carried out on behalf of Zenith Media in 14 cities across China, people from more than 16,000 households were questioned about their opinions on advertising and international brands. Some 54 per cent of respondents stated that they tended to prefer local brands ?above-average totals were recorded in Shanghai and Guangzhou, two of the most cosmopolitan cities covered in the survey. But 63 per cent overall believed international brands to be more prestigious and an even higher proportion ?65 per cent ?thought them to be of higher quality.
When asked about advertising, 55 per cent agreed with the statement that ad-vertising helped them to choose which brands to buy. This varied quite considerably between the different cities ?from just 37 per cent in Hangzhou to 63 per cent in Dalian. Women, younger people and those on higher incomes were more disposed to agree that advertising was helpful in this respect.
No link with quality
The Chinese are more cynical when it comes to advertising’s role in raising their opinion of a company generally. As in most Western countries, after years of bombardment the novelty of advertising has now disappeared and consumers are more discriminating about what they believe. Some 45 per cent of those asked agreed that advertising did, to some ex-tent, raise their opinion of the company being advertised. But this fell to as low as 27 per cent in Wuhan and 23 per cent in Nanjing. At the other end of the scale, a majority of respondents from Shanghai, Jinan and Dalian were happy to endorse this role for advertising.
None, however, showed a strong be-lief in the idea that advertising is some-how associated with higher quality products. Such a link was supported by only 27 per cent of respondents across the country and almost never by more than one-third in any individual city.
As advertising practitioners, we need to be as concerned with the quality of our contact as we are with the number of times we can reach people. Throughout Asia there is a very real danger that the sheer number of commercial messages ?however delivered will start to yield negative returns on an advertiser’s investments. This process will be affected by the willingness and ability of the Chinese authorities to set and enforce sensible advertising regulations. It will also depend on an agency’s ability to come up with strong creative ideas for their brands which appeal to viewers, listeners and readers of the media.
Andrew Green is Director of Strategic Media Resources, Zenith Media Asia, tel: (852) 2582 3423.
compromise formula of the Chinese partner taking a very limited share of the capital.”