Defining trends in China: 2013 and 2014

It was a challenging year for brands in China. With Xi Jinping’s “Four dishes and one soup” setting the tone, a lot of luxury marketers had a tough time. The Global CEO of Remy Martin was fired at year end for missing China goals, and both Revlon and Garnier pulled out of the skincare market.  Meantime online, Singles Day on 11 November saw record e-commerce results, reflecting the energy of digital.  

1. 2013: No surprises, Ogilvy and Zenith lead new business

As we track over 2,000 wins and losses in China through the year, it was the same trusted past brands of Ogilvy and ZenithOptimedia heading the New Business tables. Following behind Ogilvy were McCann Erickson, Saatchi & Saatchi, JWT and Leo Burnett. Yet one agency to watch for the future, BBH, managed to win three of the 10 largest account changes for 2013. Amongst media agencies, R3 was fortunate to lead the two largest pitches—for AB Inbev and Mengniu—and both were won by Publicis Groupe agencies (Starcom and Optimedia).

Creative Agency	Month	Account	Area
JWT	May	China Unicom	China
Saatchi & Saatchi	Mar	Buick (Buick GL8, Excelle XT and GT)	China
Leo Burnett	July	China Mobile (Telecom)	China
Saatchi & Saatchi	Jan	Mazda (CX-7 and Mazda 6)	China
BBH	Jan	Qoros	Global
Lowe	June	SGM Buick Regal	China
Saatchi & Saatchi	Oct	Union Pay	China
Saatchi & Saatchi	May	Minute Maid Dairy (Yogurt based drink)	China
BBH	Sep	Ikea	China
BBH	Oct	Harbin Beer	China
Media Agency	Month	Account	Area
Starcom	Sep	AB InBev	China
OMD	June	China Telecom	China
ZenithOptimedia	June	GAC FIAT	China
Carat	July	BMW China (Digital)	China
MediaCom	Sep	Inoherb	China
Carat	June	Bright Dairy & Food	China
Havas Media	June	DYK	China
MEC	July	General Electric	China
MindShare	Feb	Qoros Project	China
Mindshare	Oct	L’Oreal (Digital)	China

2. 2013: One mega merger, plus 21 other ones

Of course, the biggest global news of the year was also big news in the Middle Kingdom—the merger or Publicis Groupe and Omnicom. China, though, remains one of the few markets in the world where the combined group will still be smaller than WPP. Meantime, there were 21 other acquisitions for China alone last year (two more than 2012), led not only by WPP, Publicis Groupe and Aegis, but also local players such as BlueFocus, GDAD, INLY and Spearhead. Gone are the days where a local agency only admires a foreign agency group. We love BlueFocus’ strategy of going global from China through Huntsworth and WeAreSocial. 

Month	Holding group	Agency brand	Target (Chinese)	Target (English)	Specialisation	Markets
March	Aegis	Aegis	创世奇迹	WonderAD	Digital	BJ/SHA/GZ/SZ
March	M&C Saatchi	M&C Saatchi	aeiou	aeiou	Creative	SHA
April	WPP	WPP	Leading Smart	Leading Smart	Digital	BJ
April	CSM Sport & Entertainment	CSM Sport & Entertainment	泛睿体育文化	People Marketing	Marketing Service	SHA
April	WPP	TNS	新华信	Sinotrust Market Research	Market research	BJ
April	BlueFocus	BlueFocus	Huntsworth	Huntsworth	PR	Global
April	Spearhead	Spearhead Group	美意互动	Meiyi Media	Media	BJ
April	BlueFocus	BlueFocus	博杰传媒	Bojie Media	Media	BJ
May	Publicis Groupe	Publicis Betterway	永阳营销	Yong Yang Marketing	Marketing Service	SHA/BJ/GZ
July	Publicis Groupe	Digitas LBi	墨尔广告	Net@lk	Digital	SHA
August	WPP	XM	Designercity	Designercity	Digital	HK
September	Ruder Finn	RuderFinn	宇修公关	S&W PR	PR	CD
September	Aegis	isobar	三子互动	Trio	Digital	SHA,BJ,Taipei
September	Aegis	isobar	维拉沃姆	Verawom	Digital	SHA
October	Engine	DeepFocus	泛世互动	Flipscript	Digital	SHA
October	WPP	VML	二点零	IM2.0	Digital	SHA/BJ
October	INLY	INLY	一零二四	1024.00	Digital	BJ/SHA/GZ
November	GDAD	GDAD	雅润文化	Yarun Culture	Media	SHA/TJ/WH
December	BlueFocus	BlueFocus	We Are Social	We Are Social	Digital	Global
December	Spearhead	Spearhead	盛狮睿信	Shengshi Ruixin	Creative	BJ/SHA
December	Lianjian Guangdian	Lianjian Guangdian	分众传媒	Sharetime Media	Media	BH/SHA/CD
December	Arkr Group	Arkr Digital	维他命社会化	Vitamine	Digital	SHA/GZ

3. 2013: Revolving doors at the top

It was a tough year to be a China agency CEO, with changes made at JWT, Dentsu, PHD, OMD, DraftFCB, Saatchi & Saatchi, Proximity, Sapient Nitro, Ogilvy, Aegis and GroupM. Many of these were organic, with Debby Cheung stepping into the president role for O&M after many years at the agency. But others were more brutal. It will continue to be a hot seat for the coming years—with the lack of growth in the business in Europe and other places, all global firms are looking to China for more revenue and growth.

4. 2013: China goes truly social

It was also the year of the Social Media Agency, with Digitas LBi Net@lk,  iWom, Social Touch, Womi, Teein, Social Lab, Verawom, Uncle, Kongming, iMag, Vgo, Reload, Vitamine, Yupu and a host of others emerging on the scene. R3 ran standalone social agency pitches for Visa, BMW, VISA, AB InBev, Lays and a few others, as this sector now shows the need for dedicated experts in Weixin, Weibo and more to come.

So what of 2014? How can marketers and their agencies be ready for the challenges ahead?  Here are our predictions.

5. More M&A

Despite the Dentsu-Aegis merger and the Publicis-Omnicom merger, we believe that M&A will actually increase this year—too many new client demands in social, e-commerce and mobile will force holding groups to look for local nimble players to expand. China still has 178,000 local agencies. The idea that “all the good ones are gone” is not correct, as new ones emerge every year and capture local and multinational business.

6. Every top marketer will want their own social agency, or do it themselves

No company in 2014 will rely on their ad, PR or even digital agency to deliver social marketing, as the need for real specialists with execution abilities becomes critical. We also see companies in China doing what Mondelez has done in the US and hiring social people internally.

7. Everyone will want better integration

With marketers now forced to manage a wide range of agencies, the challenges for all will be “Who’s in charge?” and “How can I get the best ideas?” More and more companies will look to Coca-Cola, which is leading the way with its IMC team in China, as a more organised way to better manage agency integration.

8. Measurement will move from KPI-related to business-related

With the huge growth in e-commerce, marketers and agencies will be forced to show how campaigns drive not only brand equity but also sales. Big data will help lead this work.

China’s in for a fantastic 2014 in marketing. Strap in for the ride.

Greg Paull is co-founder and Principal of R3 (www.r3ww.com), a consultancy focused on improving the effectiveness and efficiency of marketers and their agencies. R3 works in China with Coca-Cola, BMW, JNJ, Samsung, Visa, AB InBev, adidas, Mengniu and Huawei.