Creativity is not the only key to successful brand communication, but for Chinese brands, accurate and effective creative strategies are even more valuable. Effective advertising relies on both a strong concept and a well-planned media strategy. However, when it comes to creativity, many Chinese brands still have a long way to go.
Since 2008, different industries have experienced varied impacts from the economic downturn. For fast-moving consumer goods (FMCG), even foreign companies haven't seen a significant drop in advertising spending—more so due to psychological factors than actual financial constraints. Smart companies, however, use such times to prepare for future growth, laying the groundwork for recovery and capturing higher returns later. On the other hand, sectors like fashion have been hit hard, with many companies cutting costs, especially listed firms that face severe budget restrictions. Therefore, it's crucial to tailor communication strategies based on the type of business and its market position.
Multinational corporations like Procter & Gamble (P&G) have shown resilience during economic crises. According to the CTR survey, P&G’s ad sales dropped significantly in 2008, but recovered in the first half of the following year. This wasn’t just a surface-level trend. The company maintained its focus on long-term growth, even during the peak of the financial crisis. Their CEO emphasized that P&G would not cut back on frontline efforts. Instead, they used the downturn as an opportunity to strengthen their market presence and secure prime advertising slots.
Experienced multinationals often operate counter-cyclically. While some may see a temporary decline in ads, they’re actually planning ahead, securing top placements and pushing for better deals. P&G has taken concrete steps in this direction. In 2009, they retook control of their media buying, including brands like ShuJiaJia and Olay, while outsourcing non-TV ad purchases to WPP. They also engaged in intense negotiations with major TV stations, even directly approaching CCTV to secure favorable rates.
In terms of new media, P&G embraced a multi-channel approach, leveraging platforms like the internet, outdoor spaces, in-store displays, and digital billboards to enhance their reach. Additionally, they conducted over 300 ad tests last year, showing that their ad volume hasn’t decreased significantly. This indicates a continued focus on quality and effectiveness, rather than just quantity.
State-owned enterprises like China Mobile, despite heavy advertising investment, have seen a decline in brand value. As a monopoly in the telecom sector, China Mobile faces challenges in building brand equity due to consumer dissatisfaction with its dominant position. Its advertising model, which focuses on corporate image rather than consistent storytelling, lacks the emotional connection needed to build loyalty. Without systematic testing or creative depth, their ads fail to resonate with consumers effectively.
Big event marketing has proven to be a powerful tool for Chinese brands. Yili, for example, leveraged the Beijing Olympics and World Expo to rebuild its reputation after the melamine scandal. By focusing on detailed execution, such as creating exclusive commercials for the World Expo and setting up a maternity room at the event, Yili achieved remarkable results. Similarly, Mengniu used the Shenzhou space missions to boost brand visibility. These examples show how strategic event participation can elevate brand perception.
Successful advertising isn’t just about creativity—it’s about combining a strong idea with the right media plan. While creativity has become less central, the need for thorough pre-testing and precise targeting has never been greater. P&G’s rigorous process of evaluating ideas, consumer concepts, and product positioning sets a benchmark for others. Many Chinese brands are now starting to adopt similar practices, with some achieving impressive test scores.
Overall, the quality of Chinese advertising still needs improvement. In sectors like finance, telecommunications, and home appliances, many ads lack impact and fail to drive real engagement. To grow brand value in a competitive environment, innovation remains essential. Companies that rely solely on cost-cutting or price wars will struggle to build lasting brand equity. Instead, focusing on high-end positioning and leveraging events can help establish a premium image.
As the Chinese economy continues to evolve, brands must adapt to shifting consumer behaviors. Luxury goods, for instance, have seen a surge in demand, proving that there’s a growing appetite for premium products. Brands like Mengniu and Yili have successfully capitalized on this trend by launching high-end milk lines that resonate with affluent consumers.
Wen Xiao Zhou Xiaonong, Senior Vice President, Greater China, Ipsos
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