Good question: why 4A Big Advertising Agencies Are Dying in China? China is the 2nd Advertising Market in the world, but in this Market, 4A Big Advertising Agencies cannot perform well ?
Is there a space for the 4A’s Ad Agencies)? This is a big debate in China,
First, watch this video… Really interesting.
What is 4A : the definition is the American Association of Advertising Agencies (the 4A’s or AAAA) was founded in 1917, and has since been recognized as the national trade association representing the Ads agency business in the US.” – source Jeff Bausch wikipedia
The 4A’s are the major Firm in the US, they account for 80 percent of the advertising produced in America.
The Chinese Deciders are extremely different in the way of thinking.
- They do not respect Agencies
- They ask Agencies to pitch for Free
- They try to copy and DO inhouse
- They Will searching cheaper Agencies
in China, the Cheaper and smaller specialized Agencies are kicking the 4A Agencies.
All local Chinese Agencies are 4A Agencies.
Nobody care, nobody check and everybody is 4A Ads Agencies.
Source FT It is a Global trends Ad agency fight for their Future.
80% of the Advertising is Digital Now: Traditional Ads is Dying
Seems obvious for you guys, not for some Ads that still keep living with big tradition TV budget and Metro Billboard advertising.
Brands are Searching for Performance in China
Brands in China, are searching for performance. Chinese Marketers are pragmatics and do not accept to pay for something that is not measurable.
Focus on ROI (Return on Investment)
It is difficult for 4A big Agency to be ROI oriented, too big structure is difficult to compete with local Ads agency, more flexible.
“ROI pitch” make send for Smart Marketers, and the opportunity to adjust campaign and track results seduce more and more Marketing directors.
Talents do not Stay in 4A Ads agencies: they Create their own Agency
In China, HR is a BIG BIG problem and all talents in 4A Agencies create their own agencies and leave with Clients. Chinese are here to get experience, and to collect enough client to create their own Agency that will compete with the 4A.
They get the credibility with experience and offer 50% of the price.
To attract the brightest younger talent many companies are boosting their broader offerings.
At Deloitte China millennials comprise 85% of the workforce. Wong says the firm has focused on providing flexible working opportunities, and has taken special care over the design of the offices, including plenty of natural light, collaborative spaces and agile working locations. Deloitte also offers employees job rotation, development training, preferential promotions for existing staff, and extra training for managers.
As in other markets, employer brand is a useful retention tool. Where state-run companies were once go-to employers to secure an ‘iron rice bowl’ (a Chinese term similar to Western phrase ‘job for life’), international companies that often offer better work benefits, international travel, and promotions can be more appealing.
“New companies coming to China need to use all their leverage and channels to build awareness and branding in China, to describe their culture and attract talent,” says Spirit Wen, senior talent acquisition partner at GE China. “Companies have to show they have a commitment to China – people want to know there are opportunities for development.
“The younger generation also care more about the benefits they can get from the company, rather than just salary. They have a very different outlook even from those born 10 years earlier.”
For ambitious Chinese younger employees, career planning is important, along with introcing lot of opportunities for learning. Job titles are important in China, and business trips and training classes are usually received with enthusiasm.
However, according to expert, graduates are often apprehensive about their chance of progress in an international environement, increasingly preferring to join new local technology giant like tencent, Baidu or Alibaba.
Local Advertising Ads Agencies Improve a lot
Today, local Chinese advertising improve a lot and the difference of quality and creativity between top 4A and some local one are almost the same.
Native advertising is new technics done by tech Agencies.
This video is done by a local Agency.
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4A Advertising agencies outsource their Project to small agencies like us. And Clients always prefer to go to the source
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