LIUXIANG-cr.JPGThe antics of admen don' t normally make it to the pages of EngagingChina but I make an exception for Sir Martin Sorrel, whose WPP is now the world's largest ad agency and a key player in China.

WPP's Ogilvy Group has just acquired Black Arc Advertising, a Chinese agency specialising in property advertising. China's property market is red hot as shown by almost $0.5bn rised by Shimao Property in its recent IPO on the HKSE.

That's a typically prescient move on the part of WPP, which claims this is the first time a western marketing group has made investments aimed at the China's booming property market. Around $1bn was spent on property-related advertising in 2005.

It is just the latest in a succession of acquisitions designed to exploit WPP's skills and experience in western-style marketing, advertising and PR and apply them to China's burgeoning consumer market.

WPP, through its Ogilvy brand, has been operating in China for 20 years — when presumably marketing concepts such as corporate identity and “brand stewardship” had difficult Chinese translations — and Sorrell''s long-standing enthusiasm for China is infectious.

He spoke this summer at a WPP-organised event in Beijing during which he picked out three characteristics of the Chinese market that multinational brand owners ignore at their peril:

First, the speed at which the existing media hierarchy is being transformed by digital channels, a rate of change far faster than marketers are experiencing in the west;

Second, the need to develop an extensive distribution network, perhaps the most consuming pre-occupation of advertisers in China today;

And finally, linked to this, the battle for shopper's hearts and minds instore, which can determine the ultimate success or failure of a brand.

As proof of the latter, Richard Lee, marketing VP of Pepsico, told the audience that “50% of decisions to buy in our category are made in the retail environment”.

Signing off, Sorrell told western brand owners they must drop the “China is different” mindset if they want to successfully engage Chinese consumers. He said:

Things we somewhat arrogantly believe in the west are unique factors to us, like traditional media and new media, the role of distribution, the concentration of retailing, are very, very similar here. The only thing that's different here is the growth.”

I first heard Sorrell speak on China back in 2004 at an Accenture conference for media folk. Some of his comments then are worth repeating:

Critics often ask how many of the 1.3bn Chinese can afford to buy the goods and services that WPP sells. I answer that even if its only 150m that is still half the size of the US market. It is very difficult for us to get our minds around a market of this size.”

Then, China was the fifth largest advertising market — its probably moved up a couple of positions since — and he predicted that it would grow to become the second largest by the 2008 Olympics, which he sees as a watershed event for China.

Much has been written about the 2008 Olympics and how it represents China's debut on the world stage. But apart from the political rhetoric, the games are also a once-in-a-lifetime chance for deep-pocketed brand owners to present their products to a huge audience.

Tom Doctoroff , chief executive officer for Greater China at JWT — another WPP brand — makes the point that there are really two different audiences — the global one and China's domestic consumers — in this article.

The two audiences need careful handling from the marketing perspective, he says. While the games celebrate humanity, a relevant calling everywhere, in China, they are more about “super-sized nationalism and personal self-esteem.”

Foreign firms should also not underestimate the power of local brands, says Mr Doctoroff. Although they are neophytes when it comes to sports marketing and their ad campaigns can seem crude to western eyes, Chinese firms like Lenovo and Haier know how to appeal to the nationalistic streak in Chinese consumers.

China Mobile, for example, recently used Liu Xiang, China's first track and field gold medalist (pictured above), to help position its mobile network as “in touch” with the hopes of all Chinese, “spreading new joys” to every corner of the country.

More on the battle of the brands at the 2008 Olympics in this syndicated (free) Wall Street Journal article.

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