Advertising industry representative of national 'soft power': China 4As

The Association of Accredited Advertising Agencies (4As) of China, an quasi-governmental entity under the China Advertising Association of Commerce (CAAC), which is a sub-unit of the Ministry of Commerce, organises an annual awards ceremony with a preceding two-day forum. The 15-16 Oct event dedicated an entire afternoon to a showcase of public-service ads, with exhortations about the "positive energy" that such ads render to society.

Billed as the "Oscars Of Advertising", the 8th China 4A Golden Seal Awards took place in Hangzhou, where the Canal Advertising Industrial Park was opened in 2012 with much pomp and ceremony. The park, one of the many national-grade advertising zones receiving financial support from the central government, is meant to speed up the development of China's advertising industry. According to China's Twelfth Five-Year Plan, till 2015, at least 15 advertising industial parks will be built.

Advertising has always been a small sector in the broader spectrum of China's cultural and creative industries. China's total advertising revenue accounted for only 0.93 per cent of the country's GDP, but this percentage has been stated as early as 2004, as well as at the forum by Zhang Guohua, head of the advertisement supervision department under the State Administration for Industry and Commerce (SAIC). He admitted that China's advertising-related statistics are still very "primitive".

Compared to developed countries, China's advertising industry is lacking in terms of professionalism and scale. "Not many local enterprises are in the top 10 ad firms in China," said Zhang. "Forty per cent of the ad market is dominated by six foreign-funded agencies, and the other 60 per cent shared among 17,000 smaller domestic firms."

Many of these 17,000 firms, apart from being small and scattered, are engaged in low-end, vicious competition based on price wars that hardly help development, Zhang admonished.

Hu Jiping, Beijing Advertising Company (BAC)'s general manager, posed a question to her local counterparts: Why is advertising lagging other industries, such as property, software and finance, when all of them were at the same starting point 30 years ago?

One of the reasons, she answered, was how China's local advertising industry skews toward media services, with around 75 per cent of ad revenue in 2012 from media buying instead of integrated marketing communications (IMC). Indeed, media owners, instead of brand owners, call the shots in China's unique advertising environment, commanding high rates. CCTV is the only broadcaster in the world to implement an open auction for contracted television advertising.

"In terms of IMC, China's standards are very low, and needless to say, its societal impact is very low too," said Hu. "Our advertising industry has no presence in important political, economic and charitable events, either nationwide or worldwide."

What remained unspoken on the forum stage, however, was how the survival of advertising agencies is more closely aligned with political and economic priorities than it may seem, speakers told Campaign Asia-Pacific off the record and off-stage.

"Of course the Chinese government will put in more resources into the property and real-estate sectors," one source said. "It reflects a cumulative value-add and impact to state coffers, with contributions from land sales, taxes, stamp duties, rental etc. Advertising is just a periphery to these and much less lucrative."

"Monopolistic state-owned enterprises have no need to put out ads, because they have no competition to speak of," said another. "Even if they advertise, it's a basic product push with creativity at an elementary level. And even if there is zero creativity, as long as execution is good, there will be an effect."

Contrary to Western criticism of 15-second ads in China, Wu Lin, vice president of media strategy at CTV Golden Bridge International Media Group, defended in disagreement.

"You can make a darn creative two-minute ad, but no one is gonna have the patience to watch it," Wu said. "15-seconders, or even five-seconders, are enough. The creative impact is not derived from just dwell time, but rather from visuals or music used in the ad. Time is even more precious in today's fragmented cross-screen media environment."

On the topic of creativity, the awards gave recognition to McCann-Erickson, Lowe and BBDO, which won medals for their work for CCTV Advertising Center, Buick Encore and Gillette, respectively. Notably, McCann's winning work 'Anxious To Meet Parents-In-Law' was a public-service TV campaign, which ran during the annual Spring Festival Gala and depicted homecoming stories glorifying the values of family and humanity.

Li Yi, deputy director of CCTV Advertising Center, revealed that in 2014 she plans to commit more than one billion dollars Chinese yuan worth of airtime costs (as well as ten million yuan of production costs) on at least 100 new public service ads per year.

"Consumers are not looking at merely product features now, but a combination of brand stories, humanitarian causes and social responsibility," pointed out Li Xisha, deputy general manager of Dentsu Advertising.

These elements convey a sense of "positive energy" that is again emphasised by a government-affliated entity that is People Digital, a outdoor-media subsidiary owned by the Communist Party mouthpiece People's Daily. Its vice president Wang Tianyang spoke of how the unit was set up in a bid for indirect government control over "very visible" outdoor media that has the ability to influence masses, but is plagued with light pollution and messy advertising.

Meanwhile, Ping An Insurance, Lenovo, 361°, Suning, Tesco, Buick, and Samsung jointly won the '2013 China 4A Advertiser Of The Year' award.

Four luminaries also received the '2013 China 4A Person Of The Year Award', namely BAC's Hu Jiping, Dentsu's Li Xisha, CEO of CTV Golden Bridge International Media Group Liu Jinlan, and GroupM China's managing director of business development Stewart Li.

The China 4A currently has 54 member agencies, including stronger local ones like Linksus, Walk-On, Intercom, GDAD, Black Horse, Beijing Orange Advertising, Expressway, Tang Sun, Top Advertising, Allied, Inly, OBM, SNK, O&R, Royalway, Hizone, Sunbird, RICG, TransMind and Think3.