CAMPAIGN REPORT ON ASIA: Making sense of Chinese TV - There are basic obstacles that any foreigner faces when dealing with the Chinese media market: the main ones being its scale, complexity and unfamiliarity. Rob FitzGerald reports

China, once memorably referred to as the '2.4 billion armpit' by

one leading deodorant manufacturer, presents a host of interesting

challenges for the international advertising player.

Many would argue that the country's impending entry into the World Trade

Organisation marks, in some tangible way, the maturing of this market

into a stable business environment with global standards.

And in the media world there is much to support this view, not least

improved research, more professionalism among planners and buyers, a

more commercial attitude from media owners, as well as an element of

media owner consolidation. These factors all point to a market rapidly

moving from 'developing' to 'developed'.

However, while there is much that has changed there is also much that

has not, and some aspects that have actually changed for the worse.

Many traditional practices in the Chinese media industry, some of which

used to cause raised eyebrows among foreign operators, have


These, unfortunately, include some of the more entertaining aspects of

working in China. One of the first casualties of the more professional

approach was the legendary CCTV 'Annual Auction'. CCTV is China's only

national broadcaster and every year all the clients and agencies had to

queue up to buy its limited primetime commercial minutage, in cash, on a

first-come, first-served basis.

This unseemly scrummage, which included scenes of senior executives

loaded down with suitcases of money, used to then be broadcast later in

the day on TV as entertainment (one advertiser paid USdollars 47million

for its airtime, which included a 15 per cent downpayment in cash at the


Gone too is the TV stations' refusal to acknowledge ratings as a measure

of audience - or, in fact, anything as a measure of audience. In the

past, unless the broadcasters themselves had done the measuring, no

research was taken seriously. Also gone is the old three-tier ratecard,

which dictated how much you paid according to the origin of your company

- local (poor), Asian but not Chinese (rich but not stupidly so) or

international (rich and just plain stupid).

Where there have been significant improvements is in the area of

research - we are now able to develop a real consumer insight as an aid

to effective media planning and there is real accountability in media

buying. CNRS, the equivalent of TGI, along with Telmar software, now

extends to 30 cities, 489 print titles, 372 TV stations and 2,253

brands. Measured ratings data has been extended to 66 cities and 12

provinces. Even people-meters have been established in eight leading

city markets.

What has not changed are the basic obstacles any foreigner faces when

dealing with the China media market: its scale, complexity and basic


For a start there is not a single market in China but 30 (based on the

provinces), each the size of a medium or large European country (the

municipality of Beijing, for instance, is the same size as Belgium). On

top of this, you have more than 300 major cities and, often, cities

within a province have widely different attitudes and media consumption

habits. Add to this the four different levels of media - national,

regional, city and even neighbourhood (all state-run), and you end up

with a total media market with more than 2,400 TV stations alone.

Ratecards are, in effect, set by the government. They dictate the

required increases in revenue for each station, which is then simply

passed on as ratecard increase to the advertiser.

Then there is the unfamiliarity. With the exception of Beijing and

Shanghai, most outsiders would be hard pressed to recognise any other

major market or city in China - Chengdu, Chongqing, Dalian, Tianjin,

Harbin, Kunming, anyone? It is only when one has spent some time in

China that one begins to appreciate the problems of managing a media

market that is akin to working within four Europes without knowing where

Madrid or Barcelona is (or even Spain). And there isn't even a good map

to clarify the situation.

What is clearly changing for the worse is the accelerating rise of the

local 'broker' and the impending battle between the agencies that belong

to the 4As (American Association of Advertising Agencies) and the local

operators. Initially trading only on local 'insight', these brokers were

originally often an extension of the powerful provincial TV stations

which bullied everyone in the city. Either that or they were founded on

the 'guanxi' (relationship) of a few individuals - usually a station

president's sister's husband's brother! As a result the brokers were not

taken seriously by most major advertisers.

However, another type of operation has emerged parallel to these


Multinational agencies and clients have been training their staff for

more than a decade and the result is that there is now a core group of

local but internationally trained media-buying 'entrepreneurs'. Some of

these executives are now setting up in small groups, often fuelled by

large but unsophisticated local brands, and are offering their services

to anyone at a very competitive cost.

Their ability to operate on practically non-existent margins is fuelled

by the fact that they have no research costs to cover - research does

not drive their buying decisions. In some cases, if it is absolutely

necessary, they 'borrow' research data from friends at 4As agencies.

To further confuse the issue, some of the latest international entries

into the media specialist area have been forced, through lack of choice,

to take a major stake in these operations. Consequently, one sees some

strange, local - and somewhat shady - brokers operating under the

disguise of an internationally recognisable media brand.

A final complication to the buying scene is the rise of 'programming and

syndication'. The potential gains of programming and syndication deals

in China are enormous. With so many small TV stations unable to buy or

develop quality programmes, a successful programme can be sold to

literally hundreds of TV channels or bartered for large quantities of

discounted airtime. While there are many credible international

programming operations, China seems to have collected a whole number of

mavericks, lurking around Hong Kong, promising clients all sorts of

introductions and connections on the mainland.

Given the difficulty in measuring or even tracking many programming

deals, it is not surprising that this whole area seems to attract the

very worst type of business practices.

But it is certainly not all bad. Admittedly some clients have steadily

reduced their advertising investment in China, a result of tempering

their initially optimistic business plans. However, every year more and

more international and local brands are launched and, as a result,

advertising expenditure in China will grow by more than 20 per cent for

the second year in a row. The important question now is how will it be

spent and by whom?

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