The 4A Advertising Agency Landscape As more and more foreign brands came to China, global advertising groups followed. By 1998, all of the world's top 10 advertising agencies had set up joint ventures in China, and their businesses were growing rapidly. In addition to serving multinational corporations, these advertising giants have also been courting local big brand clients. In contrast to the scale of China's industry, Chinese advertisers are still at the low end of the global market. Their realistic choice is to seize the fleeting opportunities before the multinationals' strength is fully demonstrated, and to strive to be the best in a particular specialty or a segment, rather than the biggest.
Yuan Mingliang and Ma Jing
After China's reform and opening up, foreign advertising agency Dentsu began advertising Japanese home appliances in China, and since then more and more foreign brands have come to China, followed by global advertising groups such as WPP and Omnicom. Since then, more and more foreign brands have come to China, followed by global advertising groups such as WPP and Omnicom, which usually operate independently in the Chinese market in the name of subordinate 4A advertising agencies, media planning and buying companies, and public relations firms. 4A is the abbreviation of the American Association of Advertising Agencies (AmericanAssociationofAdvertisingAgencies), and all 4A companies are large-scale multinational advertising agencies. 4A is the abbreviation of American Association of Advertising Agencies (AmericanAssociationofadvertisingAgencies). By 1998, the world's top 10 advertising agencies (4As) had all set up joint ventures in China, such as Shengshi Great Wall, McCann Bright, JWT Zhongqiao, Shanghai Ogilvy & Mather, and Shanghai Linglion, etc. These companies have developed very rapidly in China. These companies have been developing very rapidly in China, and since 1996 they have not only been serving multinational enterprises, but also striving for local big brand clients. In terms of client competition, advertising agencies under the same European or American media group tend to tolerate each other (e.g., the WPP Group), while Japanese advertising groups will be coordinated by their China headquarters to avoid direct fighting among their subordinate companies.
Corresponding to the scale of China's industry, Chinese advertising companies are still at the low end of the global market. If Chinese companies can't grow into multinationals, there will be no multinational advertising firms on the mainland. Even if a very few Chinese companies are able to go global, they are unlikely to choose domestic advertising agencies that lack experience in the international market. At the same time, there is a risk that the development of advertising agencies in mainland China will repeat Hong Kong's mistake: in the mid- to late-1980s, multinational advertising agencies took all of Hong Kong's best agencies into their pockets by promising local advertisers that they would keep their original positions and pay them annual salaries higher than their original incomes. Of course, there are industry players such as JWT Greater China CEO Tang Ruitao's view is not so pessimistic: "The advertising industry is quite similar to the catering industry, providing hundreds of thousands of dollars of large meals, there are those who provide 5 yuan of noodles stalls are also available, China's market has enough space to make different sizes of enterprises **** survival."
The realistic choice for Chinese ad agencies is not to be the biggest, but to be the best at a particular specialty or segment. According to Ding Lingqing, buying director of Strength Communications, the services of international advertising agencies are not yet in place, and local clients are paying expensive fees without getting greater value. Before the multinational agencies show their full strength, Chinese companies must seize the opportunity. White Horse Advertising CEO Han Ziding's experience is: "Chinese companies have an advantage in personal service, but we only have the experience of helping our clients grow from small to big, and we lack the energy to help them grow even bigger."
Pressure to survive in the global market
In June 2003, there was important news in the advertising world: WPP, the world's 3rd largest advertising group, was in a bidding war with Publicis, the 4th largest advertising group, and its major creditor, Cerberus. Cerberus), won the bidding with the fourth largest advertising group "Publicis" and the main creditor "Cerberus" (Cerberus), to 445 million U.S. dollars to buy the financial crisis of Cordiant (the world's ninth largest advertising group, its "Darbys Advertising" that is, BatesWorldwide, has been for the M & AMP; M's Chocolate planning). M&M's chocolate advertisement "dissolves in the mouth, not in the hand"). By now, WPP's advertisers will cover well-known brands from mega multinationals such as Heineken Beer, Heinz Foods, Nokia, Roche Pharmaceuticals, Pfizer, Ford, British American Tobacco, American Fargo, AT&T, GlaxoSmithKline, IBM, Nestlé, Unilever, and Phillip Morris.
In recent years, the global market downturn has put enormous pressure on the advertising world to survive. Cordiant, for example, has seen a 33% rise in net debt (to ￡201m) making it unsustainable. At the urging of ActiveValueFundManagement, the largest single shareholder with a 14% stake in the group, Cordiant sold its Australian arm George Paterson Bates and then moved its subsidiary PR company FinancialDynamics and German advertising agency Scholz&FriendsAG to management; and WPP, in an effort to stave off a drop in client ad spending caused by the world recession, has made about 40 acquisition deals over 2 years in areas such as PR, consulting and healthcare communications.
International giants bullish on China
The industry expects China's advertising market to grow at a double-digit rate in the next five years, and in 2010 it could overtake Japan as the world's runner-up in the ad market (with the U.S. as the champion.) "China's advertising market is growing at one of the fastest rates in the world," said Martin Sorrell, CEO of WPP Group. China is bound to become one of the top three global markets in the next 10 years." Fan Ling Si, director of PwC's Entertainment and Media Planning Asia Pacific, analyzed that China's advertising market is currently performing best in Internet, TV and outdoor media, whose advertising is estimated to grow at a compounded rate of 24.9%, 18.5% and 12.5%, respectively, in five years.
Nielsen, the originator of the global TV ratings survey, pointed out that China's 340 million TV home users will increasingly be competed for by domestic and overseas businesses, and with the 2008 Beijing Olympics, the country's advertising industry will be booming like never before. Its Asia-Pacific executive director Uu Junliu said: "In 2002, China's television and print advertising volume reached 10 billion U.S. dollars, from the world's 16th in 2001, jumped to No. 3, of which television advertising accounted for 75%. China's advertising market will expand at least at a double-digit rate in the next 10 years, with TV media being the most important network for advertisers."
The State Administration for Industry and Commerce's "Report on the Development of the National Advertising Industry in the First Half of 2003" shows that food, real estate, pharmaceuticals, cosmetics, and household appliances have become the top 5 in terms of the amount of advertisement business placed, as shown in Fig. 1; the advertisement business of the traditional four major media maintains a stable pattern, as shown in Fig. 2; and there is not much change in the development of the advertisements in the inter-regional area, as shown in Fig. 3.Meanwhile, both individual private enterprises of the advertisement industry and the
Of course, China's advertising market has a bright future, but it's not all smooth sailing. Although foreign-owned broadcast media have been allowed to do limited broadcasting, the market is still slow to open up, Farrings pointed out. As for the advertising market, where policies are more relaxed, many multinational advertising agencies are already operating in China. He believes that China's media market will eventually be fully liberalized, but the pace of liberalization will depend on China's policies.
Organizational structure of advertising agencies
Organizational structure of advertising agencies
Advertising agencies are usually divided into Creative, Account Servicing and Media.
The Creative Department is responsible for conceptualizing and executing advertising ideas. The key figure is the Executive Creative Director (ECD), under which the department is divided into several groups depending on the number of staff. Each group is led by one or two Creative Directors (CDs) or Associate Creative Directors (ACDs), one of whom is a copywriter and the other is an artist, but there are many people who are doing two jobs at the same time. In addition to conceptualizing advertisements, they are also responsible for coaching and training their subordinates.
There are different teams under the Creative Director, each consisting of a copywriter (CW) and an art director (AD). Basically, the two will **** together to conceptualize the advertisement. Since the art director's execution work is generally more complicated, most of them have an assistant art director (AAD) to assist them. Experienced copywriters and art directors will be promoted to Senior Copywriter (SCW) and Senior Art Director (SAD), but the work remains the same as before.
The Creative Department also consists of four sub-divisions: TV Production, Print Production, Studio and Traffic. The TV Production Department has a Producer who is responsible for the coordination of TV commercials, but the actual shooting of commercials is the responsibility of the commercial production company. The Print Production Department has a Print Production Manager, who is mainly responsible for following up the printing of print advertisements. There are Visualizer, ComputerVisualizer and Artist positions in the studio. The Traffic Coordinator is responsible for coordinating the graphic production.
The Client Services Department is responsible for liaising with clients and developing creative direction. The key person is the Director of Client Services (DCS), which is divided into Account Directors (AD), Associate Account Directors (AAD), Account Managers (AM) and Account Executives (AE).
The Media Department is responsible for advising clients on suitable advertising media (e.g. TV, newspapers, magazines, posters, direct marketing, etc.) and securing the most reasonable rates for both clients and media. The key figure is the MediaDirector, with MediaSupervisor and MediaPlanner under him.
Britain's largest advertising and communications group
Global advertising revenue ranking: No. 3
Major companies: Ogilvy & Mather (O&Mather, O&M), JWT (JWalterThompson, JWT), DYX, TranSwitch, SUNSHINE, Burson-Marsteller, Hill+Knowlton Strategies. PR
Shareholding structure: WPP's shareholding structure is quite decentralized, as of May 2002, its major shareholders and shareholdings are: WPPESOP 4.17%, PutnamInvestmentManagement 4.10%, LeggMason 3.77%, Morgan Stanley 3.14%, Barclays 3.00%
The shareholding structure of WPP is quite decentralized. 3.00%
WPP Group, with an annual revenue of 5.8 billion dollars, is under pressure from the market to actively pursue foreign mergers and acquisitions. Following the 2000-2001 acquisition of Young&Rubicam (ranked 14th in the world, with 2002 revenue of 442 million U.S. dollars) and Tempus Advertising Group, and the purchase of Cordiant in 2003 at a very low cost, WPP has more than 60 communication services companies, business include market research, public relations, interactive marketing, visual management and consulting.
Group chief financial officer Paul Richardson said the incorporation of Cordiant, which had revenues of $788m in 2002, would add ￡300m to the company's 2004 sales. Group CEO Martin Sorrell believes the acquisition will help strengthen WPP's ties with major international clients and fulfill the company's strategic goal of expanding its business in Asia and Latin America.
Following the acquisition of Chinese PR firm Beijing West Coast by the group's Ogilvy & Mather in June 2002 to form West Coast Ogilvy & Mather Information & Consulting Services (a move that made Ogilvy & Mather the largest PR firm in China), WPP acquired a 25 percent stake in Shanghai Advertising Co. Guo Lijuan, general manager of Shanghai Advertising, pointed out that according to the WTO agreement, joint-venture advertising companies will be able to be controlled by foreign investors after 2003; foreigners can set up wholly-owned companies after 2005, which will surely attract more multinational groups to enter the market, and the competition will be more intense.
In March 2003, one of WPP's advertising agencies, BateyAds, which has the reputation of being "Asia's Best Creative Agency", opened its China office in Shanghai; WPP's subsidiaries in China at the same time also included Shanghai Alliance Advertising. It seems that WPP Group is promoting its China business with a "loose" management model.
JWT: Branding First
China Business Director: Tom Doctoroff
Tom Doctoroff: JWT's Northeast Asia Regional Director and CEO of Greater China, responsible for the Shanghai office since 1998, and then CEO of Greater China in 2000, after serving as JWT's Asia Pacific Business Director. Prior to that, he was the Director of JWT's Asia Pacific operations. Mr. Tang graduated from Northwestern University with a degree in Psychology and received his MBA from the University of Chicago.
As one of the world's oldest advertising agencies, JWT specializes in mass branding and communications, and was ranked the No. 4 global advertising agency in 2002 with revenues of $997 million.
Tang believes that Ogilvy & Mather, which is also part of the WPP group, is the company's main competitor in China, especially in the Beijing area, and for this reason the company has recently transferred its creative director from its Hong Kong office to Beijing to strengthen its Beijing office. With its understanding and "belief" in the advertising industry and its strength in building mass brands, JWT generally charges its clients about 30 percent more than its peers. Currently, the company is preparing to further strengthen its presence in the Guangzhou market through acquisitions. Tang pointed out that the development goal of JWT's China business is to diversify its revenue sources while further expanding its local clientele.
Transmedia:
Latecomer to China Media Buyer
China Business Leader: Chris Walton
Biography of Chris Walton:
Charles Walton is Executive Director of Transmedia China, joining the Shanghai office of JWT in 1996, and then transferring to Transmedia in 1997; since April 2001, he has been working for JWT in Shanghai. In 1997, he was transferred to Chuanli Media; since April 2001, he has been in his current position. Mr. Hua graduated from Leeds Metropolitan University in 1992 with a degree in Business Studies and a CIM diploma.
Transmedia was the world's second-largest media buyer with $18 billion in 2002, and MindShare China, a merger of Ogilvy & Mather Shanghai and JWT-China, was founded in November 1997 to manage Ogilvy & Mather, JWT, and MediaEdge:MediaEdge:China. MediaShare China was established in November 1997 to oversee media buying for Ogilvy & Mather, JWT, MediaEdge:CIA, MindShare and Maximize. From a small number of local clients in the first four years of its existence, the agency now includes JiaoDa Angli, Guanshengyuan, China Mobile and Yanjing Brewery, with its own clients accounting for more than 70 percent of the total.
In May 2002, Li Qianling, head of Chuanli Taiwan, was transferred to the Shanghai office as managing director. With a master's degree in communications from the University of Illinois and 12 years of media experience in Taiwan, Chuan-Li won Motorola's media business in China in June 2003 at a competitive price, and expects to surpass the strength of the media in terms of revenue this year.
In order to avoid possible conflicts of interest, WPP has set up Shang Yang Media (developed from Power Media, which had a global contract value of $15.5 billion in 2002), Lingli Media and Maximize to specialize in advertising planning, while Chuanli Media is in charge of media buying. According to Lee, Chuan-Li's strengths over other buyers are its focus on staff training and the development of media-specific software for the Chinese market: the company uses AdNetwork and DramaDatabase, a drama ratings analysis software, to minimize human error. She said Chuanli's understanding of local customers and consumers is still not as good as that of its local competitors, and that the company intends to accelerate the establishment of its China office to achieve its goal of growing its business by more than 10 percent a year.
OgilvyOne:
The "360-degree brand steward" of many businesses
China business head: Song Chiming
Song Chiming's biography: Currently chairman of Ogilvy & Mather Greater China, he has more than 20 years of experience in the media field, and once worked as an AE at Guohua Advertising. In 1985, he assisted Cathay Pacific and O&M*** to establish the first joint venture advertising agency in Taiwan, "Ogilvy & Mather Taiwan", and in 1992, he became the Chairman of Ogilvy & Mather China, and in 1994, he was promoted to the Chairman of Ogilvy & Mather Greater China.
Ogilvy&MatherWorldwide was founded in New York City in 1948 by David Ogilvy, the "Father of Modern Advertising". Ogilvy & Mather was the first foreign agency to set up branches in China, Korea and Vietnam, and has the largest relationship marketing group in the Asia-Pacific region. 2002 Ogilvy & Mather was ranked 11th globally with total revenues of US$589 million.
Ogilvy & Mather has helped build the brands of many multinational corporations over the past 50 years, such as American Express, Sears, Ford, Shell, Barbie, Pond's, Dove, Maxwell's, IBM, Motorola, Unilever and Kodak.
In 1991, Ogilvy & Mather formed a joint venture with Shanghai Advertising Company, the largest state-owned advertising company in mainland China. Ogilvy & Mather China now has offices in Shanghai, Beijing, Guangzhou, Hong Kong and Taiwan, and employs more than 1,500 people. "Ogilvy & Mather China has become an integral part of a comprehensive regional network, providing clients with a full range of communication services such as advertising, public relations, customer relationship marketing, interactive marketing, telemarketing, visual management, market research, promotional planning and art design, etc. Currently, its clients in China include IBM, Motorola, BMW, Shell, CMS, Kodak, KFC, Shanghai Volkswagen, Unilever and Unified Foods.
To better advise Ogilvy & Mather's international clients on China strategy, Ogilvy & Mather hired James McGregor in Hong Kong in February 2003 as a senior consultant for the Asia-Pacific region, after 16 years of experience as a reporter, editor, and senior executive in China, Taiwan, and India, as well as a solo investor, and as China bureau chief for The Wall Street Journal. He has served as China bureau chief for The Wall Street Journal, chief representative of Dow Jones & Company in China, and chairman of the American Chamber of Commerce in China.
In March 2003, Chuang Shu-fen, former chairman of Ogilvy & Mather Group in Taiwan, became chairman of Ogilvy & Mather Beijing. Chuang joined Ogilvy & Mather in 1985, moved to Ogilvy & Mather's London office in 1990, and was promoted to chairman of Ogilvy & Mather Integrated Marketing Communications Group in Taiwan in 2000. Mr. Song expects the addition of Chuang to have a profound impact on Ogilvy's development in Beijing.
Shortly after DuPont appointed Ogilvy & Mather as its global integrated marketing and brand management agency, OgilvyOneWorldwide launched a new service, OneReach, in May 2003 in the Asia-Pacific region, to tap into local townships and cities in India, China, Thailand and Indonesia. OneReach combines Ogilvy's customer relationship marketing (CRM) skills in electronic media and database marketing with Outreach's (part of the Ogilvy & Mather Group) network of second- and third-tier cities and towns to develop new high-end customers in this new market. OneReach is already reported to be serving Unilever in India.
John Goodman, president of Ogilvy & Mather's Customer Relationship Marketing Asia Pacific, pointed out that in recent years, many agencies in Asia have made inroads into rural area marketing, interaction and customer relationship management technology, respectively, but so far no agency has integrated and expanded these two areas of service. Fan Qingnan, managing director of China, said that China's primary and coastal cities are quite crowded in terms of media placement, channel development and promotional activities, and that the "rising stars of consumerism" in second- and third-tier cities and towns have become a new target for many clients, and that Ogilvy & Mather hopes to assist clients in developing these new markets with its newly launched services.
The world's largest advertising and communications group
Global advertising revenue ranking: No. 1
Major subsidiaries: Tianlian Advertising, Hengmei Advertising, Li Dai'ai, Horton Media
Founded in 1986, Omnicom Group is a strategic holding company for the global marketing and communications industry. OmnicomGroup is a strategic holding company for the global marketing communications industry, with businesses in advertising, marketing services, professional communications, interactive digital media and media buying services, including BBDO, DDBWorldwide, TBWA and OMD, and was ranked No. 1 in the industry worldwide in 2002 with total revenues of US$7.5 billion.
BBDO: Creativity-oriented
China Business Head: Sheng-Yi Liu
Biography of Sheng-Yi Liu: Currently, he is the Chief Executive Officer of BBDO's Tianlian Advertising. He has more than 8 years of experience in China marketing, having worked for McCann Bright, Dentsu, Young & Ruby and Leo Burnett. He has worked with multinational companies such as Nestle, P&G, Bayer, PepsiCo, Portman Holdings, Guido's and Westin.
With 323 offices in 76 countries, BBDO's major international clients include Bayer, Pepsi, FedEx, Henkel, VISA and ICI, etc. In 2002, it became the world's No. 3 advertising agency with $1.1 billion in revenue.
Liu admitted that Tianlian's China business is not as big as that of fellow Omnicom companies Hengmei Advertising (founded by Bill Bernbach, a well-known figure in the advertising industry, and the world's 8th largest agency in 2002, with annual revenues of $815 million) and Li Daiaiai (which has grown rapidly since its acquisition of GGTBDDP in 1998, and was the world's 10th largest agency in 2002, with annual revenues of $666 million), and that it has become one of the world's largest agencies, with revenues of $1.1 billion. (GGTBDDP was the 10th largest advertising agency in the world in 2002, with annual revenues of $666 million), there is competition, but the chances are slim. He believes that the company needs to strengthen its communication with local clients in order to bridge the gap between the two sides, and that only on this basis will it be able to build a successful local brand, and that the company needs to bring in more high-quality local talent.
Holten Media:
Not the biggest, but the best
China business head: Robert Fitzgerald
Bio: Robert Fitzgerald is the Managing Director of HOLTEN MEDIA China. A member of the British National Hockey Team before university, Robert moved to London in 1987 and has worked for Lion Advertising, media analyst CIA and Power Communications, with key clients such as McDonald's, Siemens, Kao, Michelin, FedEx, Dragonair and Ritz Foods. White graduated from the University of Exeter, majoring in law.
Founded in 1996, OptimumMediaDirection (OMD), headquartered in New York, is one of the world's largest media-buying firms, serving three major advertising agencies, Omnicom's Tianlian, Hengmei, and Li Dai'ai, with 2002 commitments of more than $18 billion.
In 1999, Horton Media China was formed through the merger of the media divisions of the three agencies, Tianlian, Hengmei and Li Daiaiai. In the past two years, Horton's business in China has grown rapidly, with revenues up 65% in 2002 over the previous year, and up 50% so far in 2003 over the same period in 2002.
Platinum Dragon said only 20-25 percent of the company's clients now come from the three major advertising agencies, while the remaining 75-80 percent are acquired through direct contact. To facilitate its business, Horton Media was set up in China as a Beijing Hengmei advertising affiliate. He believes that Horton Media's advantage over its main market competitors, Power Communications and Transmedia, is the high quality of its staff, and that the company values its employees and all of its clients. A common problem in China's advertising industry is the high turnover of high-quality staff. China's economy is growing rapidly and there are too many opportunities, so media companies need to constantly retain and find good employees, and operating costs tend to rise.
He noted that Horton specializes in mid-sized clients with $200-500 million in business. Though smaller than Power Communications and Transmedia, Horton is in no rush to expand, "not to be the biggest, but to be the best.
Interpublic
Interpublic
The second largest advertising and communications group in the U.S.
Worldwide advertising revenue ranking: No. 2
Major companies: McCann Bright, Lions, Boda Bridge, Allied Communications, Weber Shandwick, and Cohen & Partners. Interpublic Group of Companies (IPG) has been making frequent acquisitions since 1999 in order to compete with Omnicom and WPP. In November 2002, Magna, the world's largest company specializing in media advertising negotiation under Interpublic, set up a Chinese company, and the company, which has control over 40 billion US dollars of annual advertising volume, is expected to launch its China business in China. The company, which controls $40 billion in annual advertising volume, expects to spend about $2 billion in China.
Magna is positioning itself as a service provider for 4A advertising agencies, centralizing the advertising spend in the hands of McCann-Bright, Lions and Boda Bridge, and using the triple-play's advantage of scale to negotiate with all types of media for better pricing, time slots, space and offers. Unlike the industry's agencies that specialize in media buying, the specific orders for buying are still done by the three advertising agencies themselves after the framework negotiations are completed by Allied Promise.
Another function of the agency is to synthesize information from the media companies, complete surveys and models, and provide corresponding analysis reports. These reports are supplied to other companies in addition to their own 3 companies. In addition, they are also involved in the production of TV programs in which their clients' products are appropriately featured.
McKinsey Bright: "Hard Work Spirit"
China Practice Leader: Mok Hong Sun
Mok Hong Sun: General Manager of McCann Bright in Beijing, and Creative Director of key projects in the Asia-Pacific region. Mok has been working in the advertising industry for 29 years, including 22 years serving McCann. He was the Creative Director of the International Creative Group at McCann's Hong Kong, Singapore and New York headquarters, as well as the Creative Director of Taiwan; he was in charge of international client projects in Mainland China in 1994. Mr. Mok is a permanent member of the New York Advertising Festival and one of the initiators of the LongXi Global Chinese Advertising Awards.
As the world's second-largest advertising agency after Dentsu, McCann-EricksonWorldGroup is the first advertiser within the Interpublic Group to have a clear policy of international expansion, and to be the first to acquire second-tier agency brands in order to diversify its marketing business. Excluding specialty market firms, McCann's 2002 revenues of $1.2 billion ranked it as the world's 2nd largest advertising agency.
In 1991, McCann and Bright Newspaper Group established a joint venture in Beijing to form McCann-Bright Advertising Co. Serving clients in the spirit of "TruthWellTold", McCann is now the second largest advertising agency in China. McCann was the first agency to win the first international award for advertising in China, the Bronze Lion at the Cannes Lions International Advertising Festival, and the first international advertising agency to enter China.
McCann, which has clients such as Johnson & Johnson, Colgate, Nestle, Motorola and L'Oreal, is generally a full agency for its clients. McCann's Universal McCann Media, which has its own monitoring methodology for media placements, was recognized in March 2003 by AdvertisingAge and Ad Age. In March 2003, UniversalMcCann was voted "Media Agency of the Year" for 2002 by AdvertisingAge and Adweek.
Lowe&PartnersWorldwide: "Blue" from Unilever
China Head: Zanchen Shen
Lowe&PartnersWorldwide was formerly known as Lintas, which was the advertising division of Unilever. Founded by Frank Lowe, Lowe was renowned in Europe for its disruptive creativity. 2001 saw the merger of Lintas and Lowe, and the new Lowe is now the world's 4th largest advertising agency network, with 191 agencies in 81 countries, and ranked among the top 5 in Asia Pacific. Excluding specialty market companies, Lintas ranked as the 17th largest advertising agency in the world with 2002 revenues of $364 million.
LINGUISE opened its Shanghai office in 1993, and in August 1996, the company entered into a joint venture with Guangming Daily in Shanghai to form Shanghai Linglion Advertising Co. Currently, LION has an office in Beijing and one in Guangzhou. The cooperation between Platinum Guild International (PGI) and LION Advertising in China started in 2001. Since the first year of the partnership, China has become the world's largest consumer market for platinum jewelry.
Currently PGI has clients such as Johnson & Johnson, Unilever, Audi and HSBC. The company believes that advertising should find the "attraction factor" for consumers in different regions, and use advertising attraction to break through consumers' "advertising immunity". LION also develops checklists for the brands it serves to examine key indicators of brand survival and determine the next course of action. LION has the largest concentration of senior local talent in the 4A market and is currently creating a model for the Chinese market.
France's largest advertising and communications group
Global advertising revenue ranking: No. 4
Major companies under its umbrella: Publicis China, Shengshi Great Wall, Leo Burnett, Strength Communications, StarTransmedia
Shareholding structure: Daughter of the company's founder, Marcel Bleustein-Blanchet, and Chairwoman of the Supervisory Board ElisabethBadinter controls 35 percent of Publicis; Dentsu holds 15 percent.
PublicisGroupeSA, founded in 1926, quickly became one of the world's leading advertising and communications groups through a series of mergers and acquisitions in the mid- to late-1990s.
The group strengthened its U.S. business with the smooth acquisition of Saatchi & Saatchi for $1.9 billion in stock in June 2000; and in March 2002, it acquired the company's U.S. business with a $4.5 billion stake in the company, and in March 2002, it acquired the company's U.S. business with a $4.5 billion stake in the company. In March 2002, the US$3 billion acquisition of advertising group Bcom3 (formed by the 1999 merger of Leo Burnett and Delta) and a 17% stake in Dentsu enabled Publicis to further consolidate its market share in the US and Japan. However, the deal also led to D'Arcy's Chinese clients Bright Dairy, Shanghai Jahwa, DOPOD and Nanfu Battery switching to 4As such as Ogilvy & Mather, Tianlian and Dentsu. The combination of Power Communications and StarcomMediaVestGroup (ranked among the largest brand communications firms in 2002 with $21.7 billion in global commitments and 110 offices in 76 countries) has made Publicis the world's No. 1 media planner and buyer (e.g., Tables 4 and 5). 2002, with $2.7 billion in total revenues, Publicis ranked as the 4th largest advertising and communications group in the world.
In light of Cordiant's acquisition by WPP, Publicis Chairman and CEO Maurice Levy expressed interest in June 2003 in acquiring Cordiant's 25% stake in the media planning and buying company Power Communications (current market capitalization of about ￡75 million).
Publicis China: Pioneering in business consulting
China business head: Neil Hardwick
Biography of Neil Hardwick: Currently president of Publicis China. Neil started his advertising career in 1984 with Saxo Great Wall in London, and later served as Managing Director and President of Darbys and Publicis Taiwan. He graduated from the University of Glasgow, Scotland.
Publicis Groupe was the latest of the international advertising and communications groups to enter the Chinese market in 1998 through the acquisition of Ad-Link, a Hong Kong-funded advertising agency in China, and has seen its business in China grow at an annualized rate of more than 25 percent in recent years. Xie Hongliu, managing director of Publicis China, said that the company and Shengshi Great Wall (the world's 13th largest advertising agency in 2002, with revenues of 476 million U.S. dollars) and Leo Burnett, which are part of the same group, avoided competing as much as possible in terms of business development; although Publicis's overseas clients may not become its Chinese clients, there will be a preferential opportunity to compete. Unlike its peers such as WPP and Interpublic, Publicis does not have an independent PR agency under its umbrella, but only a PR department within the group.
Xie Hongliu pointed out that the biggest advantage of Publicis lies in the unique positioning: "HolisticNetwork" not only provides localized advertising and communication services to clients, but also y involved in the business operations of the clients, and is committed to becoming a full range of business consultants, and competes with strategic consulting firms such as McKinsey and Boston Consulting Group. We are committed to becoming a full-service business consultant to compete with strategy consulting firms like McKinsey and Boston Consulting Group.
Looking ahead to the China market, Tse expects Publicis to see opportunities in the tobacco and retail sectors, which are gradually opening up after China's accession to the World Trade Organization, as well as in rural areas and small and medium-sized towns in the mainland, where there is huge potential for development.
Strength Communications:
The largest media-buying company in China
China business head: Li Zhiheng
Li Zhiheng's biography: Li Zhiheng is currently the CEO of Strength Communications China, and has previously worked for McCann Bright, Leo Burnett, and Ching Shang in Taiwan. 1996, Li Zhiheng founded China's first professional media agency, "Strength Media". "In 1996, Lee founded China's first professional media agency, Power Media; in 2001, he was promoted to CEO of Power Greater China and led Power Media from a professional media agency to an integrated marketing communications agency, and was honored with the Asia-Pacific Media Agency of the Year Award.
ZenithOptimediaGroup, which integrates the Zenithmedia and Optimedia networks, is the world's 4th largest media buying company, 75% owned by Publicis Groupe, with 2002 global commitments of US$17 billion; it also manages Publicis Groupe's commitments of more than US$3 billion. Power Communications' major international clients include Alcatel, AlliedDomecq, Verizon, British American Tobacco, British Telecom, Campbell's, Continental, Darden Restaurants, ExxonMobil, Europcar, GeneralMills, HSBC, Kingfisher, Kraft Foods, Mars, Pharmacia, Procter & Gamble, Puma, MGRover, Salvatore Ferragamo, Seiko, Toyota/Lynx and United Airlines. Local Chinese customers include Shanghai General Motors, Guangzhou Procter & Gamble, China Mobile