The following post by Greg Paull was initially published as a contribution to The Wharton Future of Advertising Program’s Advertising 2020 Project.
It comes as no surprise that the world’s most dynamic country has the most dynamic advertising outlook for 2020.
One of the themes that should continue developing is “Beyond the 1.3 Billion”. Right now we see a complex marketplace, with its unique culture and tradition leaving a strong imprint on dynamic consumer preferences. Gaining consumer trust should be on the top of the list for any brand trying to make it in China, or any other market, but earning that trust would require brands to go back to basics. The consumer engagement journey and product life cycle in this market looks different from any other market, and establishing a presence should start by setting functional underpinnings of offerings through education before venturing into any emotional territory.
The coming trend that could impact all of this work is the ‘Internet of things’, the idea that going forward, much of what we touch everyday could be linked intoa set of networks. By best estimates, there will be 1 trillion products connected to the Internet by 2015. So how could this impact advertising in China? First of all, in the future, it could mean that China’s advertising industry should be able to do ‘passive crowdsourcing’, which would make consumers’ contributors to brands innovations and improvements. McKinsey’s recent study of China’s tier cities told a key story: beyond the top hundred cities in China, the next three hundred are small today, but by 2020 will command 30% of the GDP – and this amount will only increase over time. Chinese advertising should become hyper-local since it could no sooner become a homogenous society than it could a secular one, with pockets of ethnicity looking for their own unique and relevant messages.
One thing’s for sure: China should become more competitive over time. The current drivers for hyper-competition should still be there in 2020 and in twenty years into the future. This does not only mean increased revenue and stature for firms, but also a new flow of innovation, and new manufacturing, tax, pricing, and distribution options. The list of companies is already well-known: Haier, Li Ning, Lenovo, TCL, Huawei, and others. These brands all already compete every day in China with the multinationals, but as global firms, they should only become more engaged, more flexible, savvier, and competitive; with that loyalty marketing will step in. The whole notion of lifetime value, well-established in the West, should soon become a powerful concept in China as the right algorithm program for Chinese consumers start rolling out. Brands would continue to use research to determine the best brand ‘fits’ and develop collaborative and engaging campaigns to maintain its target costumer.
As time goes on, training and development should be in-built features of the advertising industry as whole. Ironically, this is not because the future advertising talent will be undertrained, but simply because they could be overtrained, and more demanding. The increase in skills development in different areas will also reflect the changing role of the marketer and advertiser from a broadcaster of messages to a collaborator and curator. Skills like making the most out of social media, out of mobile, mastering new areas,and constant upskilling could soon become the rule, not the exception.
Fascinating everywhere, but nowhere more than China, digital marketing has been the one thing keeping advertisers up at night. The future for China could become only digital –the growth of Youku and Tudou at the expense of TV viewership would only continue. In 2020 “digital” should find itself being embedded throughout the customer journey, not merely as a marketing communications tool, but totally integrated into sales. Industry leaders would need to wear multiple hats, leveraging their deep knowledge of how consumers and potential consumers think into a far more digital customer journey than has ever existed before.
I’m confident that in 2020 competition to work with leading marketers should be greater than ever before. Technology could step in for online reverse auctions for RFPs, multiple agencies could work on single campaigns, and turnover could continue The future advertising campaigns should always be driven by art, but it could be the science of micro-targeting what could play a crucial role in its success. There should always be a place for both multinational and local agencies in China but the coming decades in China, as they relate to the client- agency interaction, can’t be covered without the role of procurement. By 2020, Chinese procurement professionals should have mastered the ability to balance innovation, value and cost discussions for the benefits of their companies.
In 2020, China could be different in challenges, because despite a common language and time zones, you have heterogeneous people living differently in different provinces. China could be different in opportunities, because the unique set of values and growing needs of the people. It could be different in competition because it has local players competing aggressively using approaches not seen in the West. It could be different in scale, because of the population and ambition. In media, since it has more than 3,000 TV stations. China could be different in talent since it poses a diverse mix from those with no marketing training or culture, to those with the best local and foreign education. In agencies, since it has over 178,000 local agencies fighting for every marketing dollar, and multinational firms with just a thirty-year history in the market. China could be different in social marketing, because of the massive division between rich and poor and the expectation that brands can contribute to change.
Lao Tzu once said:
“If you do not change direction, you may end up where you are heading”
China continues to break old ground rules and set new standards in order to become what it might be. Our responsibility is to decide what kind of actions we will take to embrace this change.
