國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
C hapter 6 Conclusion and Recommendations
Throughout 30 years of advertising exercises with various stages of rapid development and changes in China, it is worth noting that, from 2005 to the financial crisis in 2008, the growth rate of the advertising industry in China has suffered a downturn, which has accelerated the shifting of the advantages between local and foreign advertising companies, media and advertising agencies, traditional media and new media in the market, and intensified the conflicts between these various entities, fermenting a mature advertising market.
6.1 Research Conclusions
The major findings from investigations in previous chapters can be summarized as follows:
1. China was expected to be Globe’s 2nd largest advertising market in the short term
China has been regarded as the dominator and key driver of economic growth of the Asia-Pacific region. Furthermore, it has become one of the world’s leading advertising markets, and the Globe’s 3rd largest advertising market after the USA and Japan. With the promise of ranking up in Globe’s market, China was expected to surpass Japan within years by two digits of growth rate, disregarding the Financial Crisis of 2008.
2. Transnational advertising agencies are taking the advantages of China’s advertising market from domestic companies
Since the very beginning of the development of the advertising market in China, the
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
media has dominated the market and the legislative restriction on operating media in China. Although foreign investors may never be allowed to operate a media business, foreign advertising agencies perform well in the advertising market and their revenue share is increasing year by year. In the beginning of the advertising business in China, mainly foreign companies were listed in the top advertising companies, and foreign transnational companies have already earned more and more revenue in China’s advertising market in a very short time. Simultaneously, the more the requirements for advertising services, the better the class of advertisement demanded by clients. This is a skill possessed by foreign advertising companies, since they have better professional services, which is why they have taken 20% of the distribution of the market and weakened domestic players, especially part-time domestic advertising companies, turning them into “scattered and weak” firms.
3. China’s advertising market has been dominated by the major media for a long time
Although it is operating under a strict control system, China’s advertising industry may still sustain a long-term prosperous development. During the past three decades of development, the traditional media, especially TV and newspapers, have shared more than fifty percent of the revenue from the market and dominated it for a long time. However, they are gradually losing their domination of the market to advertising enterprises; additionally, and the continuous innovation of communication, which has facilitated the fast growth of online businesses, has encouraged the future development of the advertising market in China to make an unexpected turning. The importance of new media will be further described in the next chapter.
4. China has various regional markets with different characteristics
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Development is unequal in China, with 43% of urban residents among the 1.3 billion people living in major cities, so that the media and advertising are synchronized to develop unequally. Thus, the localization of strategies with various characteristics is unavoidable for further developing the advertising market in China. This may create opportunities for the prosperous development of small advertising agencies, but large-scale professional advertising companies must also adapt to different regional characteristics to provide more intimate services for local advertisers.
5. The Internet is emerging in the advertising market
Although TV, especially CCTV obtains the most advantages from the market, the Internet is catching up with TV and played as relatively an important role as TV during Olympic Games. The TV and the Internet are both considered as the most important media for users to access information of important events. Therefore, the potential of the Internet cannot be ignored.
6. China’s advertising market is facing a lack of creditability which may cause a deficiency in the market
One of the problems of developing the Chinese advertising market may cause a deficiency since part of the industry lacks credibility. This has resulted in 46.6% of customers losing their trust in commercial advertising.
7. China’s advertising market still lacks adequate professionals
Secondly, the advertising market in China suffers from a lack of professional manpower, which may affect the normalization of the development of the advertising industry. Especially the illegal advertising during the Olympic Games described in this chapter has seriously damaged the creditability of the industry. In short, China’s
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
advertising market needs more justice and conscience to recover its credibility.
8. The development of China’s advertising market will not seriously suffer from the financial crisis
Despite the financial crisis which took place in 2008, consumers in China are optimistic that the economy will recover in a short period. Therefore, the development of the advertising market in China can still be predicted to have a prosperous future, especially the fast growing “low cost” online advertising, which has sufficient potential for further development, and attracts more advertisers.
9. Children will become increasingly important in China’s Advertising Market From the perspective of the population, China is country with the biggest population of children, numbering 325 million, and in anticipation of an oncoming baby boom, spending on children’s clothing has increased by a two digit percentage over the past few years. Furthermore, children were said to influence the decision maker in the family in an estimated 68% of household purchases, which amounted to US$60 billion per year, and it is believed that children’s influence on household spending will grow commensurately, and. the “children market” will become one of important markets in the future for a number of decades. China’s development in any element attracts worldwide attention, and since the Taiwanese share the same culture with the Chinese, Taiwanese people should hold together to create a win-win situation for both sides of any issue, rather than just ignoring the international situation for selfish political benefit.
6.2 Recommendations
This preliminary study of the advertising market in China has produced the above results, and it would also provide the following recommendations for cross-Strait Governments:
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
1. Taiwan should hold the ideal of win-win cooperation to create a cross-strait advertising market with Chinese characteristics
China’s development in any element attracts worldwide attention, and although almost all major multinational advertising corporations around the world have already entered the Chinese market, Taiwan has always been reluctant to do so because of ideological arguments. Yet, the advertising market in China is still abundant with opportunities, which highlights the fact that, even in the current situation of being overtaken by a large number of multinational advertising corporations, it is never too late for cross-strait mutual advertising exchanges to take advantage of gaps in the market. Furthermore, since Taiwanese people share the same culture as the Chinese, Taiwan should hold the ideal of creating a win-win situation by means of using the same language, and strengthen the cooperation of both sides in order to create an advertising market with purer Chinese characteristics.
2. Taiwan’s advertising industry should share its senior advertising professionals’
experiences with China
In 2009, a spokesman for the Taipei City Government, the Director of the Tourism and Broadcasting Bureau, Xiaodong Yang, called on Taiwanese officials to accelerate the opening of the advertising of Chinese goods in Taiwan, in order to revive the Taiwanese economy and create a win-win situation for cross-strait relations.
Many Taiwan county governments had used China’s media for fruit marketing and experienced a good performance. However, the Act was limited by Taiwan during the presidencies of Lee Denhuei and Chen Shiubien in the 1990s, which led to a delay in allowing Chinese goods to be advertised in Taiwan. Taiwan has strong advertising human resources, a highly talented group, able to process advertising from Taiwan to China, and this would also help to intersperse the creative talent to expand the
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Chinese market by offering adequate professionals, especially since there is insufficient Taiwanese creative talent in China. Moreover, as mentioned above and in chapter 2, the total spending on Taiwan’s major media has been positioned in last place among countries in the Asia Pacific region by -1% of annual growth rate in 2007. However, due to being absorbed by numerous professionals of China, the most urgent challenge for Taiwan’s advertising industry is the lack of experience of senior professionals. Nevertheless, some of the players in the industry point out that the boom in Taiwan’s advertising industry will last no more than ten years. Therefore, it is important for Taiwan’s advertising industry to pay more attention to the transmission of the experience of senior advertising professionals before this industry faces the same situation as Hong Kong, an advertising market being marginalized by a “brain drain”.
3. China should make it easier to develop its Internet
While the Chinese government retains its consideration of media as a “political service”, the tide of the fast changing world economy and social systems are sweeping away traditional politics, and the Chinese government should seriously consider how to catch up with that tide.
As mentioned in chapter 4, China has became the top Internet market with more than 300 million users, and the online advertising spend in China has grown by 50 percent, from US$731 million in 2007 to US$1.79 billion in 2008. Thus, China should seriously consider providing the media with more independence, and in particular, the Internet should be able to be accessed more freely to interact with, and facilitate the expansion of, the public’s view of the world, in order to create a more open and sound social system in China.
‧
1888 Press Release, (2009), “IP Surveillance to Drive CCTV Market,” available at:
http://www.1888pressrelease.com/ip-surveillance-to-drive-cctv-market-pr-12388 4.html. (Viewed on 11 Mar. 2009).
Administration of Press and Publication of Guangdong Province (2006), “The 10th Anniversary of Guangzhou Daily Newspaper Group,” available at:
http://www.xwcbj.gd.gov.cn/news/html//sy/cszx/xwcbglc/bcdt/article/733447119 0956.html. (Viewed on 18 Apr. 2009).
BBC (2002), “China Rarely Disclosed the Number of Laid-off Workers,” available at:
http://news.bbc.co.uk/chinese/trad/hi/newsid_1800000/
newsid_1805900/1805976.stm. (Viewed on 29 May, 2008).
Bo, Y. Q. (2009), “New Media in China,” available at:
http://www.slideshare.net/plus8star/new-media-in-china. (Viewed on 9 May, 2008).
Business Week (2007), “Best Chinese Brands 2006, Emerging Brand Powerhouse,”
available at:
http://www.interbrand.com/images/studies/Interbrand_BCB_2006_En.pdf.
(Viewed on 7 August 2008).
CCW (2006), “2005 Top 10 Ad Media Revealed,” available at:
http://news.ccw.com.cn/internet/htm2006/20060120_11OT3.htm. (Viewed on 9 May 2008).
Central Policy Unit (2007), “Social-Economic-Political Trends in Pan-Pearl River Delta Region, 5th Monthly Report,” available at:
http://www.cpu.gov.hk/english/documents/new/press/pan-prd%20B05.pdf (Accessed on 3 Mar. 2009).
Chan, K. and U. James (2004), Advertising to Children in China. Hong Kong:
Chinese University of Hong Kong Press.
Chen, H. L. (2006), “On the Gradual Reform of China’s Media System,” available at:
http://www.jour.nccu.edu.tw/mcr/0062/05.html. (Viewed on 23 Mar. 2008).
Chen, S.S. (2008), “China’s Online Ad Market to Weather Global Crisis, May Benefit,” available at: http://tmt.interfaxchina.com/news/768. (Viewed on 3 Apr.
2009).
‧
China Economic Weekly (2008), “Who Can Win the Olympic Marketing Gold Medal?” available at:
http://mag.chinayes.com/MagazineBase/M24/1260/20080919173727607_3.shtm l. (Viewed on 6 March, 2009).
China Daily (2004), “A Digital China in the Eyes of Foreigners,” available at:
http://english.peopledaily.com.cn/200412/22/eng20041222_168283.html.
(Viewed on 19 December, 2008).
China Daily (2009), “Internet Eyes Ad Sales in Hard Times,” available at:
http://en.ce.cn/subject/financialcrisis/financialcrisisim/200901/12/t20090112_17 929923.shtml. (Viewed on 22 Mar. 2009).
China Investment Net, (2009), “The Advertising Industry to Alleviate Imbalances in Regional Development,” available at:
http://www.ocn.com.cn/free/200903/guanggaoye260940.htm. (Viewed on 19 January, 2009)
China Milk Powder Market (2008), “Changsha Infants Market Analysis,” available at:
http://www.nfsc.com.cn/marketing/article_36.shtml (Viewed on 23 Oct. 2008).
China Review News (2008), “NBC Earned 900 million US$ From Olympic Broacasting,” available at:
http://www.chinareviewnews.com/crn-webapp/search/allDetail.jsp?id=10070283 8&sw=%E5%A5%A5%E8%BF%90%E5%B9%BF%E5%91%8A. (Viewed on 22 Aug. 2008).
China Strategy Net, 2007, “China’s Consumer Market of the Great Differences,”
available at: http://www.bookwoo.com/NewsInfo/25425.aspx. (Viewed on 20 December 2008).
Chiu, L. (2008), “Top Chinese Web Sites in World’s Largest Internet Population,”
available at:
http://chineseculture.about.com/od/mediainchina/a/topchinesesites.htm. (Viewed on 23 Oct. 2008).
CIA (2007), “The Chinese Media: More Autonomous and Diverse─Within Limits,”
available at:
‧
-limits/copy_of_1.htm. (Viewed on 8 May 2009).CTR (2009), “Habits of Contacting Media are Changing,” available at:
http://media.people.com.cn/GB/22114/86916/86917/9168143.html. (Viewed on 28 Apr. 2008).
CTR and Advertising Age (2006), “Global Players” and “Global Marketing,”
available at:
http://adage.com/images/random/globalplayers2006.pdf.
http://adage.com/images/random/datacenter/2008/globalmarketing2008.pdf.
(Viewed on 6 Mar. 2008).
CTR Market Research (2009), “The Braking Down of China’s Advertising Market in 2009,” available at:
http:// http://news.enorth.com.cn/system/2009/04/27/003986177.shtml. (Viewed on 23 Feb. 2009)
CTLS (2009), “Chinese High-End Women Lead the-She Era-Luxury Consumer,”
available at:
http://www.ctrchina.cn/ctrchina/cn/News_Article.do?article=153. (Viewed on 5 Oct. 2008).
Dentsu (2004-2007), “Annual Year Report, 2004-2007,” available at:
http://www.dentsu.com/ir/marketing/pdf/AR2004_E.pdf.
http://www.dentsu.com/ir/marketing/pdf/AR2005_E.pdf.
http://www.dentsu.com/ir/marketing/pdf/AR2006_E.pdf.
http://www.dentsu.com/ir/marketing/pdf/AR2007_E.pdf.
(Viewed on 22 Dec. 2008).
Deloitte Research Study (2009), “China’s Consumer Market: Opportunities and Risks,” available at:
http://www.bglegis.com/China_Consumer.pdf. (Viewed on 23 Oct. 2009)
Ding, J. J. (2009), “Some Problems of Advertising Education in China,” available at:
http://www.cnadtop.com/guandian/guanggaojiaoyu/2009/6/19/17ce6c28-caaa-48
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
0e-a25a-98bc820913e7.htm. (Viewed on 12 Apr. 2009).
Du, G. C. (2008), Intense Changes of New Media. Beijing: China CITIC Press.
Economic Daily (2009), “Chinese Local Governments are Preventing Malignant Collapse,” availuable at:
http://mag.udn.com/mag/world/storypage.jsp?f_ART_ID=170892. (Viewed on 5 Apr, 2009).
Fang, R. B. (2004), 25 Years in China’s Advertising. Beijing: China Encyclopedia Publishing House.
Financial Times (2009), “Premier Wen Jiabao’s Interview with the Financial Times,”
available at: http://www.fmprc.gov.cn/eng/zxxx/t535971.htm. (Viewed on 6 Apr.
2009).
Finfacts (2005), “China Responsible For 75% of Poverty Reduction in The Developing World Since 1980,” availabl at:
http://www.finfacts.ie/irelandbusinessnews/publish/article_10003611.shtml.
(Viewed on 4 Feb. 2007).
Fortune (2006), “The Most Valuable Brands in China Unveiled,” available at:
http://english.peopledaily.com.cn/200606/06/eng20060606_271534.html.
(Viewed on 21 Jul. 2008).
Gu, S. H. (2007), The History of China Advertising. Jinan, Shandong: Jinan University Press.
Hong Kong Trade Development Council (2005), “The Hegemony of Global Advertising Giants,” available at:
http://info.hktdc.com/report/top/top_050605.htm. (Viewed on 23, Sep. 2006).
Hsiao, H. Y. (2007), “China is Never A Single Market,” available at:
http://www.bookwoo.com/NewsInfo/25425.aspx. (Viewed on 23 Oct. 2008).
Huang H. F. and H. Y. Ma, (2006), “Aspect of China’s Regional Development,” available at :
http://big5.china.com.cn/zhuanti2005/txt/2006-03/29/content_6169092.htm.
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
(Viewed on 22 July 2008).
Huang, S. M., K. C. Ding, and H. D. Shiao, (2009), Report on the Promotion Trend of China’s Advertisers. Beijing: Social Sciences Academy Press.
Itamar Medeiros (2009), “Advertising in China: Revenue Reaches $27.78 Billion US Dollars in 2008,” available at:
http://designative.info/2009/03/23/advertising-in-china-revenue-reaches-2778-bl n-us-dollars-in-2008/. (Viewed on 3 March 2009).
Kaplan, M. H. (2008), “Obama’s Olympic Advertising Buy,” available at:
http://politicsandsociety.usc.edu/2008/08/obama-olympic-ad-buy.html. (Viewed on 4 Oct. 2008).
Lane K., I. St-Maurice, and C. S. Dyckerhoff, (2006), “Building Brands in China,”
available at:
http://www.mckinseyquarterly.com/Retail_Consumer_Goods/Building_brands_i n_China_1795. (Viewed on 13 Nov. 2008).
Li, W. T. (2008), “Commercial Appeal,” available at:
http://www.chinadaily.com.cn/bw/2008-03/10/content_6521035.htm. (Viewed on 10 Oct. 2008).
Li, S. (2006), “Venerable Tong Ren Tang Goes Global,” available at
http://www.chinatoday.com.cn/English/e2005/e200506/p72.htm. (Viewed on 11 Nov. 2008).
Lin, C. J. (2006), “China Increased Its GDP, the Inspiration for Taiwan,” available at:
http://old.npf.org.tw/PUBLICATION/TE/095/TE-B-095-002.htm, (Viewed on 13 Oct. 2008).
Liu, H. (2007), “The Interaction Between New Media and Old Media: Influencing the Politics of China,” available at:
http://www.nottingham.ac.uk/cpi/events/event_reports/ict_symposium_14_15_0 6_2007/presentation/LIU_Hong.pdf. (Viewed on 11 Oct. 2008).
McKinsey (2009), “The Number of Well-off Families in China Will Top the World’s
‧
wealthy_household.aspx. (Viewed on 7 Jun. 2008).
Meng, J. (2003), “China’s Advertising Industry and The Development of Chinese Consumption Patterns,” available at:
http://www.cjr.com.cn/05cjr/system/2003/10/21/002027870.shtml.
Modern Advertising (2006), “2005 Statistics Report on China Advertising Market,”
available at:
http://www.gotoread.com/s/e/?vo=977&p=40. (Viewed on 22 Feb. 2008).
Modern Advertising (2009), “China’s Advertising Industry, 2008 Annual Report of The Ecological Survey,” available at:
http://www.adnews.com.cn/bt.asp?bt=调查显示：广告公司普遍对 2009 年经营 情况信心不足. (Viewed on 7 Feb. 2008).
Mondo Times (2008), “China National News Media,” available at:
http://www.mondotimes.com/1/world/cn/192/majormedia. (Viewed on 21 Dec.
2008).
Morris, P. (2004), “China’s Internet Portals Post Impressive Results,” availuable at:
http://www.atimes.com/atimes/China/FB06Ad02.html. (Viewed on 23 Apr.
2009).
Muzi (2006), “Survive or Death, Foreign Advertisers’ Investment Flushing into China,” available at: http://home.muzi.com/cc/fanti/10328, 19931.shtml? Q = 1426478. (Viewed on 3, Oct. 2007).
New York Times (2008), “Summer in Beijing Was Strong For Sports, But Weak For Ads,” available at:
http://www.nytimes.com/2008/11/21/business/media/21adcol.html. (Viewed on 6 May. 2008).
Netpop Research (2009), “Chinese Social Media User Surpasses US,” availuable at:
http://www.marketingcharts.com/interactive/social-networking-grows-93-commu nication-becomes-entertainment-8576/netpop-social-network-vast-majority-broa dband-users-contribute-2009jpg. (Viewed on May 23 2009).
‧
Nielsen Media Research (2007), “Main Media Advertising Grown 15% in Asia-Pacific Region in 2006,” available at:
http://tw.nielsen.com/site/news20070416.htm. (Viewed on 13 Aug. 2008).
Nielsen Media Research (2008), “Ad Spend Soars in Asia Pacific, Ahead of Other Regions:12% Overall Growth in Main Media For 2007,” available at:
http://tw.en.acnielsen.com/site/news20080527e.shtml. (Viewed on 19 December, 2008).
Nielson Wired (2008), “China: Unprecedented Ad Spending Drop During Olympics,”
available at:
http://blog.nielsen.com/nielsenwire/tag/beijing-olympics/. (Viewed on 9 Sep.
2008).
Normandy, M. (2008), “China TV Auction Shows Little Sign of Economic Meltdown,” available at:
http://adage.com/article?article_id=132776. (Viewed on 1 Oct. 2008).
Pan, D. (2006), “Foreigners Encircle China’s Ad Market,” available at:
http://www.atimes.com/atimes/China_Business/HG08Cb01.html. (Viewed on 22 Sep. 2008).
Pfanner, E. (2008), “Games Gave No Bounce, Even in China,” available at:
http://www.mydigitalfc.com/advertising/games-gave-no-%E2%80%98bounce%
E2%80%99even-china-598. (Viewed on 3 Oct. 2008).
PRNewswire, (2007), “Spending on Convergent Platforms Will Exceed 50% of Global Entertainment & Media Spending by 2011,” available at:
http://usstock1.jrj.com.cn/news/2007-06-21/000002350267.html. (Viewed on 9 Oct. 2008).
Reuters (2008), “World Bank Cuts China GDP Forecast As Crisis Bites,” available at:
http://www.javno.com/en-economy/w-bank-cuts-china-gdp-forecast-as-crisis-bites_20 7471. (Viewed on 8 Sep. 2008).
Roach, S. S. (2006), “Understanding the Chinese Consumer,” available at:
http://www.theglobalist.com/storyid.aspx?StoryId=5261.
‧
Searchina Research Inquiry (2009), “People of Different Ages Result Difference of Contacting Media,” available at:
http://big5.chinabgao.com/gate/big5/www.chinabgao.com/freereports/20270.htm l. (Viewed on 18 March, 2009).
Sun, S. H. (2007), “The History of China Advertising,” Jinan: Shandong: Jinan Jing Shen Printing.
Times (2005), “China’s Advertising Market Soon to Be Second to America’s,”
available at:
http://business.timesonline.co.uk/tol/business/industry_sectors/media/article559 516.ece. (Viewed on 15 Dec. 2007).
TMT China (2008), “Online Advertising Standards Need Government Support,”
available at:
available at: