Adland (30 page)

19

New frontiers

‘The future is being invented in Beijing or Shanghai'

T
here have been promised lands before. In the early 1990s, after the fall of the Berlin Wall, advertising agencies scrambled into Central and Eastern Europe at the behest of their impatient masters. General Electric, Colgate, Procter & Gamble, Unilever and RJ Reynolds were among the clients keen to exploit this virgin territory. The death of socialism brought into the world millions of potential customers – almost 40 million in Poland alone – some of whom had been clamouring for years for access to Western goods. Philip Morris and Gillette had been probing the region for more than a decade. McDonald's opened its first branch in Hungary as early as 1989; so did Ikea.
Playboy
was equally keen on Hungary, and quickly signed a licensing deal for a local language edition. Cigarettes, scented soap, expensive toothpaste, cheap furniture and glossy sex: welcome to the free world.

But it was not easy going. In 1991, food was still being rationed in Moscow. Advertising executives from the West found themselves grappling with antediluvian telephone systems and sophisticated corruption. Gillette struggled to translate ‘The best a man can get' into Czech. Agencies discovered that Eastern audiences did not respond well to one of the basic standbys of advertising: authority figures such as dentists and scientists explaining the benefits of fluoride or biological washing powder. Specially tailored advertising was required, but Western clients were uneasy about devoting large budgets to markets where they were unlikely to see big profits. The concept of branding was largely unknown and local companies tended to think in terms of one-off ads rather than long-term strategies.

‘There has been a lot of ad agency over-enthusiasm about Eastern Europe,' a Young & Rubicam executive admitted to
Marketing
magazine. ‘Anyone going into the Soviet Union… needs a lot of patience and
deep pockets… Russians tend to think that if a product needs advertising it's either substandard or there's an oversupply' (‘Ignorance blunts ad firms' forays in East', 12 July 1990).

Years later, agencies were still struggling to get it right.
The Wall Street Journal
reported that ‘cultural gaffes' were common and that adapted Western commercials showed ‘scenes and products irrelevant to the everyday lives of Central European consumers'. Even worse, there was a consumer backlash against expensive Western goods and nostalgia for defunct local brands (‘Ad agencies are stumbling in East Europe', 10 May 1996).

One of the more promising markets was the Czech Republic. The aspic-preserved old town of Prague attracted so many tourists that an article in
Adweek
described it as ‘the ultimate theme park… a real Magic Kingdom'. It added: ‘And those millions in Western currencies pouring into the country can't hurt, either.' Finally, it seemed, the cash registers were beginning to ring. Local adman Jiri Kartena commented: ‘Around the time of the revolution, we went through the seventies. Now the eighties have begun. Everybody wants to be in business. Everybody wants to make money. Everything is fast, fast, fast' (‘Let the 80s begin', 23 May 1994).

Having been classed for more than a decade as ‘an emerging market', at least half of Eastern and Central Europe has now gone ahead and emerged, although ad spend is only a quarter of that of the West. The Czech Republic and Hungary are considered mid-sized European markets. Russia, we're told, is experiencing a genuine boom. ‘There are more Rolls-Royces on the streets of Moscow than there are in London,' says Perry Valkenburg, European president of TBWA, who built the agency's network in Eastern Europe. Agencies have set their sights on smaller markets like Romania, which still fit into the ‘emerging' category. But even in Poland, salaries remain low, unemployment high and agencies continue to struggle. Despite the large population that made it look so promising, it has yet to live up to its potential.

Asian creativity

Thanks to cultural differences and the economic turmoil of the 1990s, the Western advertising networks have hardly enjoyed a smoother ride in Asia. Since 2000, however, their attitude to the region has remounted
from a steady simmer to bubbling enthusiasm. China gets them excited the most, but the country is expected to tug smaller markets such as Vietnam and Indonesia along in its slipstream. Vietnam, certainly, has a growing economy and clutches of young, brand-hungry young consumers in Ho Chi Minh City and Hanoi. Mature markets such as Japan and South Korea are recovering from their economic travails. India is the world's largest democracy, with a growing middle class spurred by technology expertise.

The big agencies have been in Asia for many years now. J Walter Thompson opened an office in India in 1920 – a fact that is likely to be a source of pride for Sir Martin Sorrell, the boss of its parent company WPP and a confirmed Asia enthusiast. McCann-Erickson opened an office in Tokyo in 1960. Other networks moved into the region in the seventies and eighties.

One old Asia hand is Neil French, the former WPP ‘creative godfather' who is often credited with having brought the creative revolution to the Far East in the 1980s. French began his advertising career in Birmingham (which he describes as ‘a splendid place to come
from
') before moving to London in the late 1970s. In 1983 he arrived in Singapore as a creative director of Ogilvy & Mather. After spells at Batey Advertising and the Ball Partnership, he rejoined O&M as regional creative director. He was eventually made worldwide creative chief of the WPP group, but left in 2005 after making controversial remarks at a conference about women in the advertising industry, which caused a stir in the trade press. (He suggested in blunt terms that their maternal instincts tended to get in the way of their careers.)

Recalling his arrival in Singapore, French says the market was unsophisticated – almost a blank canvas for somebody steeped in the creative ambience of 1970s London. ‘There was no distinct style when I rocked up. All I had to do was mimic my betters in London, and bingo. After a year or so, I realized that if they'd buy rip-offs, they might buy something a bit original.'

One of the agencies on French's CV had a considerable impact on the advertising output of South-East Asia. The Ball Partnership was established by Michael Ball in 1986 and had no qualms about shaking up the scene. ‘Don't you wish your ads stood out like Ball's?' read one of its promotional posters. At the time, said Ball, ‘Singapore had the ugliest advertising outside Africa. It was hideous, dominated by reversed type in which the ink invariably ran into the letters, making them barely visible'
(‘The world's hottest shops',
Campaign
, 22 January 1993). Whether it was working for big overseas clients like Mitsubishi or small local firms like the Yet Kon chop shop, the agency injected drama and quirkiness into Singapore advertising.

Risky ads didn't always go down well with authorities, however. The Singapore government cracked down on posters that it felt introduced inappropriate Western sentiments to its citizens: images of youthful rebellion were received particularly badly. But this was the natural by-product of cultural colonialism. Western agencies in Asia employed large numbers of expatriates, and few of them were as talented as French. Fewer still had a detailed understanding of the cultures they were attempting to infiltrate. But that, too, began to change with the turn of the millennium. As the old guard drifted back to senior roles in London and New York, young local executives were placed in top slots. And in 2004, Cannes finally got its first Asian jury president in the form of Piyush Pandey, head of Ogilvy & Mather India.

In terms of creativity, however, Thailand still outshines the whole of Asia. The country scores extremely well at Cannes – and Neil French thinks he knows why: ‘What appeals to the better judges also appeals to real people: humour and the ability to put on screen what those same real people are thinking, in an engaging way.'

Thailand needs to look in the rear view mirror, however, because another Asian market is making creative inroads at Cannes. It's still early days, but industry leaders have little doubt about where the future lies.

And so to China

In 1918, an American former journalist and pioneering adman put his name on the door of Carl Crow Inc, ‘the largest organization in the Far East devoted exclusively to advertising'. The story of Crow's Shanghai outpost is colourfully told in Paul French's excellent book
Carl Crow – A Tough Old China Hand
.

As French recounts, Shanghai after the First World War was booming as trade picked up. ‘Europe needed just about everything China could produce – rubber, coal, soybean oil, cotton and silk, as well as other goods such as cigarettes…' Well-heeled Western visitors mingled with an emerging Chinese nouveau riche. The Bund became a showcase for corporate architecture; fine department stores sprang up and Nanking
Road was nicknamed ‘the Oxford Street of the Orient'. Foreign brands ‘were attracted by low import tariffs as much as the dream of a seemingly limitless consumer market'. Indeed, Crow's adventures in advertising later formed the basis of his own bestselling book,
Four Hundred Million Customers
, published in the 1930s.

Overseas brands and local merchants clearly needed to advertise, and Crow was in the perfect position to help them do so. Having already worked in China for many years, he could do business with both domestic clients and newcomers from Europe and the United States. As described by French, the Crow operation sounds conspicuously modern. He bought space in newspapers and magazines all over China, and compiled the first guide to the country's publications. He engaged in market research, studying consumer behaviour and spending habits and providing intelligence on competing clients. He employed teams of billposters in 60 cities. When the authorities cracked down on fly-posting, he leased official poster sites across the country – ‘at one point he had 15,000 of these locations'.

Carl Crow Inc was in the creative avant-garde, too. Crow commissioned some of Shanghai's leading cartoonists and illustrators. The most important of these was TK Zia, also known as Xie Zhiguang, whose illustrations of spirited, seductive, yet distinctly Chinese young women contributed to the mythology of wicked Shanghai. ‘Xie's sexual messages became… explicit and his models wore ruby red lipstick and transparent
qipaos
[mandarin-collared sheath dresses] with high slits up the legs, and had the artist's trademark penetrating eyes that drew the consumer's attention.' An ad for Pond's Vanishing Cream in the
Shenbao
newspaper in March 1920 is believed to have ‘heralded the modern girl image in Shanghai advertising that was to become ubiquitous throughout the 1920s and 1930s', writes French. Other sources suggest that Xie's advertising images revolutionized women's dress styles in China, encouraging them out of trousers and into skirts.

But Crow had more than sex to sell. He believed that the Chinese consumer was distrustful of advertising, so he insisted that his illustrations of cigarette packs and soap bars should be as accurate as possible.

Nor was his the only international advertising agency in Shanghai. Advertising and the media in China were largely the creation of Westerners: the first modern newspapers and magazines had been established by expatriates in the 19th century. In 1921, a British agency called Millington Ltd was founded. Advertising continued to grow until the
Sino-Japanese War in 1937, when the overseas shops pulled out. Local agencies continued operating until the 1960s, but after being brought into state ownership they eventually became a casualty of the Cultural Revolution (1966–76).

Overseas agencies returned with China's ‘Open Door' policy of the late 1970s. Dentsu was first into the market, in 1979, followed by McCann-Erickson, which was able to establish a representative office thanks to its joint venture with Jardine Matheson, the famous Hong Kong trading company. Having been rendered irrelevant by the Cultural Revolution, advertising was politically correct again. In 1987, then-premier Wan Li stated: ‘Advertising links production and consumption. It is an important part of the economic activities of modern society. It has become an indispensable element in the promotion of economic prosperity' (‘400 million to more than 1 billion consumers: a brief history of the foreign advertising industry in China',
International Journal of Advertising
, vol 16, no 4, 1997).

This vast market was once again open for business.

The parallels between Carl Crow's Shanghai and the booming China of today are striking. China is now the world's third largest advertising market, according to ZenithOptimedia, which means that Asia-Pacific is poised to overtake North America as the world's biggest advertising spender in the very near future – if it hasn't done so by the time you pick up this book. The region's advertising expenditure currently stands at more than US $140 billion.

Sir Martin Sorrell is well aware of the importance of China. And he suggests that it would be foolish to underestimate Chinese creative talent. With their vast heritage in the fields of luxury craftsmanship and the arts, these people have creativity in their genes. ‘The future is probably being invented by a bunch of young graduates in a shed in Beijing or Shanghai,' Sorrell says. Kevin Roberts, the worldwide boss of Saatchi & Saatchi, states: ‘The most important market for advertising over the next 10 years is going to be China. And after that, it will still be China.'

One man who knows China well is Arto Hampartsoumian, who has headed the BBH office in Shanghai since it opened there in November 2006. Changes to World Trade Organization rules the previous year allowed foreign agencies to enter the market without having to form a joint venture with a local partner. BBH got off the ground with an 18-strong operation, handling clients such as Johnnie Walker, Bailey's, Bose audio equipment and the World Gold Council.