Adland

by Mark Tungate

  In terms of creativity, however, Thailand still outshines the whole of Asia. The country scores extremely well at Cannes – and Neil French thinks he knows why: ‘What appeals to the better judges also appeals to real people: humour and the ability to put on screen what those same real people are thinking, in an engaging way.’

  Thailand needs to look in the rear view mirror, however, because another Asian market is making creative inroads at Cannes. It’s still early days, but industry leaders have little doubt about where the future lies.

  And so to China

  In 1918, an American former journalist and pioneering adman put his name on the door of Carl Crow Inc, ‘the largest organization in the Far East devoted exclusively to advertising’. The story of Crow’s Shanghai outpost is colourfully told in Paul French’s excellent book Carl Crow – A Tough Old China Hand.

  As French recounts, Shanghai after the First World War was booming as trade picked up. ‘Europe needed just about everything China could produce – rubber, coal, soybean oil, cotton and silk, as well as other goods such as cigarettes…’ Well-heeled Western visitors mingled with an emerging Chinese nouveau riche. The Bund became a showcase for corporate architecture; fine department stores sprang up and Nanking Road was nicknamed ‘the Oxford Street of the Orient’. Foreign brands ‘were attracted by low import tariffs as much as the dream of a seemingly limitless consumer market’. Indeed, Crow’s adventures in advertising later formed the basis of his own bestselling book, Four Hundred Million Customers, published in the 1930s.

  Overseas brands and local merchants clearly needed to advertise, and Crow was in the perfect position to help them do so. Having already worked in China for many years, he could do business with both domestic clients and newcomers from Europe and the United States. As described by French, the Crow operation sounds conspicuously modern. He bought space in newspapers and magazines all over China, and compiled the first guide to the country’s publications. He engaged in market research, studying consumer behaviour and spending habits and providing intelligence on competing clients. He employed teams of billposters in 60 cities. When the authorities cracked down on fly-posting, he leased official poster sites across the country – ‘at one point he had 15,000 of these locations’.

  Carl Crow Inc was in the creative avant-garde, too. Crow commissioned some of Shanghai’s leading cartoonists and illustrators. The most important of these was TK Zia, also known as Xie Zhiguang, whose illustrations of spirited, seductive, yet distinctly Chinese young women contributed to the mythology of wicked Shanghai. ‘Xie’s sexual messages became… explicit and his models wore ruby red lipstick and transparent qipaos [mandarin-collared sheath dresses] with high slits up the legs, and had the artist’s trademark penetrating eyes that drew the consumer’s attention.’ An ad for Pond’s Vanishing Cream in the Shenbao newspaper in March 1920 is believed to have ‘heralded the modern girl image in Shanghai advertising that was to become ubiquitous throughout the 1920s and 1930s’, writes French. Other sources suggest that Xie’s advertising images revolutionized women’s dress styles in China, encouraging them out of trousers and into skirts.

  But Crow had more than sex to sell. He believed that the Chinese consumer was distrustful of advertising, so he insisted that his illustrations of cigarette packs and soap bars should be as accurate as possible.

  Nor was his the only international advertising agency in Shanghai. Advertising and the media in China were largely the creation of Westerners: the first modern newspapers and magazines had been established by expatriates in the 19th century. In 1921, a British agency called Millington Ltd was founded. Advertising continued to grow until the Sino-Japanese War in 1937, when the overseas shops pulled out. Local agencies continued operating until the 1960s, but after being brought into state ownership they eventually became a casualty of the Cultural Revolution (1966–76).

  Overseas agencies returned with China’s ‘Open Door’ policy of the late 1970s. Dentsu was first into the market, in 1979, followed by McCann-Erickson, which was able to establish a representative office thanks to its joint venture with Jardine Matheson, the famous Hong Kong trading company. Having been rendered irrelevant by the Cultural Revolution, advertising was politically correct again. In 1987, then-premier Wan Li stated: ‘Advertising links production and consumption. It is an important part of the economic activities of modern society. It has become an indispensable element in the promotion of economic prosperity’ (‘400 million to more than 1 billion consumers: a brief history of the foreign advertising industry in China’, International Journal of Advertising, vol 16, no 4, 1997).

  This vast market was once again open for business.

  The parallels between Carl Crow’s Shanghai and the booming China of today are striking. China is now the world’s third largest advertising market, according to ZenithOptimedia, which means that Asia-Pacific is poised to overtake North America as the world’s biggest advertising spender in the very near future – if it hasn’t done so by the time you pick up this book. The region’s advertising expenditure currently stands at more than US $140 billion.

  Sir Martin Sorrell is well aware of the importance of China. And he suggests that it would be foolish to underestimate Chinese creative talent. With their vast heritage in the fields of luxury craftsmanship and the arts, these people have creativity in their genes. ‘The future is probably being invented by a bunch of young graduates in a shed in Beijing or Shanghai,’ Sorrell says. Kevin Roberts, the worldwide boss of Saatchi & Saatchi, states: ‘The most important market for advertising over the next 10 years is going to be China. And after that, it will still be China.’

  One man who knows China well is Arto Hampartsoumian, who has headed the BBH office in Shanghai since it opened there in November 2006. Changes to World Trade Organization rules the previous year allowed foreign agencies to enter the market without having to form a joint venture with a local partner. BBH got off the ground with an 18-strong operation, handling clients such as Johnnie Walker, Bailey’s, Bose audio equipment and the World Gold Council.

  ‘The most extraordinary thing you feel here is the enormous sense of optimism,’ Hampartsoumian says. ‘While in the West there is an underlying anxiety about the future, here there is a conviction, particularly among the young, that things are going to get better and better. And let’s face it – if you were born in China in the early eighties, you’ve witnessed unprecedented growth in wealth and opportunities. India is a far more mature market in comparison, and its relationship with Western brands goes back much longer.’

  China’s questionable human rights record is certainly not perceived as a barrier to entry by foreign brands. As they have demonstrated in the past, they are insensible to local politics if the economic conditions are favourable and the media accessible. Hampartsoumian accepts, ‘This is still the Wild East – it’s the last frontier. I realize that living in Shanghai is not living in China. There’s no doubt that the disparity between rich and poor will continue to be a problem, and the social implications of the speed of development here are enormous. But this generation is very different and far harder to control. I believe that for China, there is no going back.’

  20

  The agency of the future

  ‘Brands can no longer force themselves on an unwilling public’

  For almost 30 years, the advertising landscape evolved remarkably slowly. Anybody who had worked with Bill Bernbach in the early 1950s would not have felt out of place at an agency in the late 1970s. About the only technological innovation of any note had been the adoption of FM radio by rock stations. Only when cable and satellite emerged in the 1980s did tectonic shifts in media consumption habits begin to occur. By the early 1990s, it was clear that fragmenting TV audiences and the rise of the internet were going to change everything. It seemed likely that, at some point in the near future, computers and television sets would merge. ‘Convergence’ became the new buzzword.

  In May 1994, Edwin L Artzt, chairman and CEO
of Procter & Gamble, told the American Association of Advertising Agencies: ‘The advertising business may be heading for trouble – or it may be heading for a new age of glory. Believe it or not, the direction… is in our hands. The reason: our most important advertising medium – television – is about to change big-time… From where we stand today, we can’t be sure that ad-supported TV programming will have a future in the world being created – a world of video-on-demand, pay-per-view and subscription television. Within the next few years… consumers will be choosing among hundreds of shows and pay-per-view movies. They’ll have dozens of home shopping channels. They’ll play hours of interactive videogames. And for many of these [there will be] no advertising at all. If that happens, if advertising is no longer needed to pay most of the cost of home entertainment, then advertisers like us will have a hard time achieving the reach and frequency we need to support our brands’ (‘P&G’s Artzt: TV advertising is in danger’, Advertising Age, 23 May 1994).

  The advertising agencies agreed that he was probably right, scurried off to write white papers on the issue, and did relatively little. This was not the first time they had been warned. Way back in the early 1960s, a West Coast adman named Howard Gossage had pinpointed everything that could go wrong with advertising. Known as The Socrates of San Francisco, he was uncommonly lucid about his own trade. Advertising, he considered, was ‘thoughtless, boring and there is simply too much of it’. He was opposed to repetition, suggesting that it took only one direct hit to kill an elephant. Although he was not lacking in cynicism regarding consumers, he at least argued for the involvement of audiences in advertising, citing the old proverb that when you bait a trap, you should always leave room for the mouse. He believed that an ad ‘should be like one end of an interesting conversation’.

  But it is the following quote that is often highlighted by Gossage fans for its relevance today: ‘Advertising may seem like shooting fish in a barrel, but there is some evidence that the fish don’t hold still as well as they used to and they are developing armour plate. They have control over what type of ammo you have, when the trigger gets pulled, and how fast your shot moves. Oh, and they’re not all in the same barrel anymore’ (‘Rich media, online ads and Howard Gossage’, Clickz.com, 8 November 2004).

  The arrival of the digital video recorder in 1999 chilled agencies to the marrow. Allowing the viewer to ‘time shift’ viewing and skip commercial breaks, it represented the slow death of scheduled television and, potentially, the 30-second advertising spot. And then there were all the other distractions available to audiences: video games, blogs, social networks, phones that were becoming entertainment centres… suddenly, the agencies didn’t know which way was up. The advertising industry resembled one of those cartoon characters frantically plugging leaks in a rowboat, only to find more fountains of water springing up around them.

  Even Kevin Roberts, the worldwide CEO of Saatchi & Saatchi, suggests that consumers are, on average, less confused than advertisers. ‘Consumers know exactly what they want,’ he says. ‘They want it all. They want to read their news in the newspaper. They want a weekly magazine to give them a bit of perspective. They want updates on their mobile phones. They want to check stuff out on the internet. They want to listen to the radio in their cars. They want big pictures on their TVs in the evening. They’re not remotely confused.’

  For Roberts, this is a bonanza for brands. In the future there will be more screens, not fewer. In our homes, at work, in supermarkets, on mobile phones… all the world’s a screen. ‘Our job is to create emotional connections with people, wherever they may be,’ he says.

  An early, courageous attempt to create a new model for this environment was the London-based agency Naked Communications, founded in 2000. Naked did not have a creative department. Or a media department, or planners, or account handlers. It didn’t believe in traditional media, or alternative media. It believed in looking at its clients’ needs and coming up with innovative solutions – which may or may not have anything to do with conventional advertising.

  The three founders of the agency – Will Collin, Jon Wilkins and John Harlow – met at London media specialist PHD. Their backgrounds were in strategic planning, research and media planning. Collin told me at the time that, for him, one of the drivers behind the creation of Naked was disillusionment with the existing industry model. ‘While I was at PHD we pitched for a number of big, centralized media [planning and buying] accounts. But I quickly realized that what these big clients wanted was to get the cheapest possible price for the media, with the agency fee ratcheted down to the lowest possible level. It was depressing enough that we couldn’t compete on those terms – but what was worse was that, in that context, our strategy, ideas and thinking didn’t seem to matter. When push came to shove, what the client really wanted was cheap media. In other words, you had to buy lots and lots of telly so you could get a big discount.’

  Collin, Wilkins and Harlow inferred that the thing they were really passionate about – finding creative ways of connecting with consumers – wasn’t what clients primarily went to media agencies for. ‘Although some clients seemed highly motivated and engaged by what we were telling them, we had the impression we were telling them in the wrong place. Trading sits at the heart of the media planning and buying agency.’

  The trio decided to take away the creative thinking element and sell it by itself. They would unhook strategy from execution and implementation and sell raw ideas – hence the name of the agency. ‘It comes back to the old aphorism that you only respect what you pay for. What traditional agencies actually charge for is execution: making commercials, building websites, sending out mail shots… they give the strategy away for free.’

  Being an ideas merchant would give Naked absolute freedom when it comes to solving marketing problems. Traditional advertising agencies with large creative teams are inevitably going to argue for advertising as the ideal solution to a client’s problem. Digital agencies are similarly biased. ‘We’ve always said that we don’t want to own the means of production. One of our favourite quotes is, “You wouldn’t ask a fish monger what to have for dinner,” which goes to the heart of what we’re trying to do.’

  Eschewing the term ‘media neutral’, Naked preferred to describe itself as ‘communications agnostic’. ‘After all, if you are a retailer, your most important means of communication is your store. If you are an automotive manufacturer, actually having your cars on the streets probably does more for your brand than advertising. But we’re not discounting advertising as a potential solution. We don’t exist merely because the power of television is being eroded. We exist because the industry is built to 1950s specifications.’

  Naked has since expanded worldwide, with 16 branches at the time of writing. When the agency made its debut in New York, there were sceptical mutterings from some corners of Madison Avenue. But the futuristic agencies kept coming. Take Anomaly, for example. The agency opened in 2004 – four years later Fast Company included it in a list of the world’s most innovative companies, along with the likes of Google, Apple and Facebook. Anomaly sells ideas, which could just as easily be products as advertising campaigns. Or it might create the product and the packaging and the launch campaign as well. It creates intellectual property that it then licenses to clients in return for a share of revenue. As partner Carl Johnson said, ‘We would rather invent the next VitaminWater than do the ads for VitaminWater.’

  One thing it did create was a line of luggage for Virgin America. ‘Richard Branson’s new airline hired the team in 2005 to feed ideas into every part of its operations. Anomaly realized it could use the crew’s luggage as a branding medium and brought in snowboard company Burton to help craft an edgy black suitcase with skateboard wheels and a removable cosmetics pouch. Sales from the luggage… will be shared three ways among the companies’ (‘The world’s most innovative companies’, 1 March 2008).

  Around the same time, Australian creative director Dave Droga expres
sed similar ambitions for his new agency, Droga5, which he founded as an idea generator. ‘I want clients to give us the freedom to come back with a myriad of communications solutions,’ Droga told Campaign. ‘That may involve entertainment, architecture, community and online… I haven’t reinvented the wheel; I just want to take that wheel off-road and everywhere’ (‘Why Droga enjoys being in control of his destiny’, 4 August 2006).

  Droga’s viral internet campaign for the clothing designer Marc Ecko won the Cyber Grand Prix at Cannes that year. It showed grainy footage of a graffiti artist apparently tagging Air Force One with the words ‘Still free’. Such films – which can be diffused via the internet to a few and circulated by many – have become common. Even conventional spots, instead of beginning and ending their lives on television, now enjoy a parallel existence on YouTube. Ads also make perfect mobile snacks.

  French creative director Rémi Babinet of the agency BETC says: ‘Advertising agencies are the specialists of the short film. With the multiplication of screens, our expertise is likely to become even more relevant. Mobile media offer a particular opportunity, because the smaller the screens are, the more attractive short films become.’

  The challenge is that successful viral spots are self-selecting: if they’re not entertaining enough, nobody passes them on. This means that brands are often forced to disguise the ‘selling’ aspect of their advertising. But they stand to gain in the long term, because once they’ve established their credentials as entertainers, consumers will be keener to hear from them in the future.

  Content providers and inventors

  Branded entertainment is the talk of Cannes these days. There is some debate about what it actually is, but Richard Armstrong, a partner at Kameleon, an agency specializing in the field, told me in an interview for Stylus.com: ‘It’s about creating ideas people want to spend time with.’ In a world of unlimited choices, this is essential. ‘Branded entertainment encourages consumers to seek you out, rather than requiring you to interrupt them.’