Beijing Beckoning Madison Avenue
Maxwell House Coffee might sound as American as apple pie. But General Foods executives would also like to make it as Chinese as Peking duck.
Likewise for some of its other products, like Kool Aid and Tang.
Over the past year, General Foods has struck up ventures with three Chinese companies. The food giant is trying to introduce some of its brands to a nation of more than 1 billion. And it is beginning to advertise Maxwell House on Chinese television--which only has one national channel. “You don’t just import ads from New York,” said James C. Tappan, group vice president at General Foods. “You have to develop ads specifically for the market.”
As a result, General Foods has turned to the Hong Kong office of its New York ad agency--Ogilvy & Mather Worldwide--for its Maxwell House campaign.
But General Foods is not alone. Some of America’s biggest companies--including International Business Machines, American Telephone & Telegraph and Pepsi-Cola--have long recognized that China is crucial to future growth, but only in the past handful of years have many restrictions on their advertising efforts in China been lifted. After an ad ban that stretched more than three decades, the government lifted the restrictions in 1978.
Now, the Chinese government is actually making a move to encourage foreign advertising.
Two months from now, the Chinese government--with the blessing of Premier Zhao Ziyang--will play host to a mass gathering of more than 1,000 advertising and marketing executives at a conference in Beijing. As one signal of the government’s new interest in foreign advertising, the conference has been scheduled in the Great Hall of the People. That is the rough equivalent of a computer conference taking place in the U.S. Senate chamber.
As the Chinese look to increase two-way trade with the West, advertising in China has grown at a rate of 50% per year since 1979. An estimated $200 million was spent on advertising in China last year--but only 10% of that was ads for foreign products. Some of Madison Avenue’s biggest ad agencies are just now trying to figure out how to appeal to this mostly untapped market.
Still, many government restrictions on advertising are yet in force. For example, tobacco and alcohol ads are taboo. And comparative advertising is not allowed.
“Advertising is a very, very young industry to the Chinese,” said Caroline Nicholson, manager of the upcoming conference, “Beijing ’87.” The conference is co-sponsored by South, a London-based magazine directed at corporations that do business with developing nations. “Nobody can just come to China and start selling a product,” Nicholson said. Above all, the product’s name must become very familiar--and trusted “almost like a friend,” she said.
Among the first to recognize this were the Japanese. Toyota and Sony, for example, both began to advertise in China years before the products were even available there. That’s because the Chinese are “very brand-conscious,” said Alexander Brody, president and chief executive of Dentsu/Young & Rubicam, a joint venture of the Japanese and American ad giants. “Unfamiliar brands are deeply distrusted,” he said.
That is why much of the foreign advertising in China is directed more toward industry than consumers. Early acceptance in the workplace is considered crucial to the success of many new products.
For example, AT&T; makes itself known through ads in technical journals and by appearances at trade shows. “We’re not trying to reach every single household,” explained Jean Chang, AT&T;’s international sales manager for China. And IBM’s advertising in China--mostly print--is also geared to industry. “The look, language and wording may be different from our U.S. ads,” said a company spokesman, “but we’re still trying to convey the same message.”
Both Coca-Cola and Pepsi-Cola have tried to slowly build brand images in China. “We’re really just a guest here,” said John Georgas, executive vice president at Coca-Cola Co. “So we’re trying to act that way.”
Coke does very little TV advertising in China--and Pepsi ads do not appear on Chinese TV at all. Coke and Pepsi billboards are rare. And most of Coke’s advertising is limited to signs at the stores where it is sold. In part, that’s because Coke still has very limited availability in China. “If the availability isn’t there yet,” posed Georgas, “why raise expectations?”
Ad Spending Due to Snap Back, Expert Says
Ad spending may snap back in a big way within a year.
So says the man whose job is to study advertising economics, Robert Coen, senior vice president at the New York ad agency McCann-Erickson Worldwide. Although U.S. ad spending of an estimated $110 billion for 1987 will only rise about 7.6% over 1986 spending, Coen’s outlook for ad spending brightens considerably for the rest of the decade.
In fact, Coen said in an interview, improved corporate profits will result in “double-digit increases” in U.S. ad spending in 1988. The lower corporate ad budgets over the past two years are only temporary, he said. “I see our economy growing at a 7% to 9% rate for several years,” he said, “and advertising will take on a larger share each year.”
New Dole Campaign Rides Range of Boss
It isn’t often that the boss gets to show off his ranch in a commercial.
But a new Dole Food campaign that breaks Wednesday was all filmed on location at the chairman’s 1,300-acre ranch in Hidden Hills, in the western San Fernando Valley. Although David H. Murdock, chairman of the Los Angeles-based maker of Dole products, Castle & Cooke Inc., does not appear in the commercials, his estate--and some of his Arabian horses--do.
Riding the horses are Kenny Rogers and family--who recently signed a multiyear, $17-million contract to promote Dole products. The ads, created by the New York ad agency Ted Bates Worldwide, cost $600,000. And by shooting the commercials at the boss’ ranch, the company saved about $10,000 in location fees, said Linda Simmons, who heads advertising at Castle & Cooke. “Of course,” she said, “that’s not the primary reason we shot there.”
New York Ads Warn Cheaters on City Tax
“The tax man can put you into beachfront property.”
That is the headline for an ad showing a picture of Riker’s Island, a New York City prison located on the East River near New York’s La Guardia Airport. The ad, created by the Santa Clara, Calif., ad firm Winkler McManus, is an attempt by the city of New York to crack down on tax cheats who fail to pay an estimated $1 billion a year in city taxes. The ad has been placed mostly in subways and bus shelters. “This year,” the ad says, “the dodgers lose.” That’s tax dodgers, not baseball Dodgers.
