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).
|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|
|Lowe||June||SGM Buick Regal||China|
|Saatchi & Saatchi||Oct||Union Pay||China|
|Saatchi & Saatchi||May||Minute Maid Dairy (Yogurt based drink)||China|
|Carat||July||BMW China (Digital)||China|
|Carat||June||Bright Dairy & Food||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||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||Spearhead||Spearhead Group||美意互动||Meiyi 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|
|September||Ruder Finn||RuderFinn||宇修公关||S&W PR||PR||CD|
|December||BlueFocus||BlueFocus||We Are Social||We Are Social||Digital||Global|
|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.