This article was written by Greg Paull, Co-founder & Principal at R3. It was first published by Campaign.

In a recent conversation with Mastercard CMO Raja Rajamannar, Procter & Gamble’s Marc Pritchard said the future of marketing can be found in China. Having worked with leading marketers in China for more than twenty years (we even wrote a book about the country’s marketing transformation in 2013), seeing China accelerate from a developing market to a mature, futuristic harbinger has been nothing short of incredible.

What is shaping marketing’s future?

Using marketing in China as a roadmap, we can make a few assumptions about what to expect in our industry in the next three years. The shift in this direction has already begun:

  • Marketing strategies will be platform-driven, designed for community, highly targeted, integrated with e-commerce, and built on content and entertainment.
  • There will be increased demand for specialist agencies.

Characteristics of future-forward marketing strategies

In China, digital marketing accounts for more than 50% of marketing budgets, up 7.5% in 2018 and doubling since 2016. Content marketing monopolizes as much as 50% of total marketing budgets. Almost every campaign has a digital component accessible by mobile phone. Marketers in China increased their digital investment by an estimated 22.7% in 2020, and 80% of netizens shop online.

Contrary to the idea that data will be the main factor propelling marketing forward, China’s marketing landscape suggests that human curiosity and need for connection plays a large role in driving adoption. Catching up to this degree of digital penetration and engagement requires a shift in thinking and ways of working.

Platform-driven and content-defined
Four digital giants account for 69% of China’s entire digital market, yet focus is on audience-specific marketing.

  • Mind shift: Serving multiple, segmented audiences through single platforms.
  • Operations shift: Integrating platform insights to inform overall commercial strategy.

Teams that address brand and performance
The traditional marketing funnel model of awareness to advocacy no longer works with the growing strength and dominance of third-party platforms.

  • Mind shift: Seeing brand building and performance as a ‘dual engine’ of growth.
  • Operations shift: Maintaining a centralized multidiscipline and data-driven strategy center that informs a brand’s e-commerce operations.

Entertainment as a retail opportunity
Sponsorship of programs (broadcast network and platform-owned) are popular in China. With demand comes an unprecedented variation of collaborative formats.

  • Mind shift: In-platform engagement is only half the equation.
  • Operations shift: Develop budgets that consider true ROI, including costs within and outside of the sponsorship and “waste” in the process.

The impact on agency models

In interviews with more than 500 marketing professionals and 600 client-agency relationships across China last year, R3 and SCOPEN found that China is above the global benchmark for using specialized agencies. However, in the same survey, one-third of marketers said they would prefer to work with an integrated agency model if the degree of specialization was available. Working with one is always less complicated than working with many.

With digital becoming a mix of walled gardens and niche platforms, specialist agencies will inevitably play a more significant role in the agency ecosystem. We see this with passive audio on Clubhouse and e-commerce livestreaming. Even Google offers insights to marketers that no digital agency is privy to.

As a result, we might see more marketers expand their ecosystem of agency partners while keeping overall digital strategy with an AOR or bringing control in-house. Marketing will be content-rich and media and entertainment-driven, to the delight of audiences. The challenge for marketers will be to bring focus, integration, and discipline to the fragmented structure.