Chinese Marketers Shift Ad Budgets From Mass Media to Content

Media costs have been soaring for years in China, even as advertisers face greater restrictions from government regulators on how and when they can use mass media.

Marketers are responding by shifting ad budgets into professionally-generated content, and local companies are doing more, and spending more, than their multinational competitors.

“Overall, we see local players being a lot braver in China with content initiatives and it’s paying off big,” said Amrita Randhawa, CEO of WPP’s Mindshare China, a leader in spotting and developing such content for both local and multinational marketers. Ms. Randhawa, a Mindshare veteran who took over as China CEO in 2013, is one of Ad Age’s 2015 Women to Watch China honorees.

Millward Brown’s 2015 BrandZ ranking of the 1,000 most valuable brands in China credits strong usage of content as a primary reason local brands like dairy company Yili Group and China Resources Sanjiu Medical & Pharmaceutical Co. have grown in valuation.

“The time has never been riper for content in China and the money is big too. Professionally-generated content is hugely underestimated by multinationals who wait for reams of data to take a call vs. local players, who take a punt on instinct and then work their butts off making the amplification bigger and better and getting the return,” Ms. Randhawa said.

Local companies are comfortable working directly with the TV stations, Ms. Randhawa noted, and make low profile chairman-to-chairman deals on a handshake—and then trust the shows will deliver. Once the deal is made, local firms spend heavily around the content, activating it across different media.

JiaDuoBao, for instance, capitalized on its “Voice of China” sponsorship by printing the show’s logo on cans, and including an eight-digit code allowing buyers to visit the show’s website to vote for their favorite singer and win a prize, according to Kantar.

Without the need for the levels of research and evaluation required by multinational brands, local companies expect their TV station partners to bring in strong enough ratings to justify their growing sponsorship expenditure.

See the original article in Ad Age here.