The capital of China will be in the global spotlight next year as host city for the 2008 Olympic games. Adrian Pennington discovers a city playing by the rules.
  
In 2008 all eyes will be on Beijing. As the host for the 29th Olympiad it will be welcoming athletes, fans, journalists and brands from all over the world.
 
And while China is often viewed as a distinct market within Asia, Beijing too has special characteristics that also set it apart from rival metropolitan areas such as Shanghai and Guangzhou. 
 
The government has extensively remodelled the whole city. In addition to spectacular new facilities, existing venues have been renovated, the road network overhauled, the subway system extended and the centre of town tidied up. 
 
For media planners that means the billboard free-for-all that characterises other Chinese cities has been stripped away and tight new regulations are reducing availability and inflating prices. 
Outdoor spend is poorly monitored but standardisation of shape, size and content has been deemed necessary to prevent ambush marketing around the summer Games. The impact is unknown, making out-of-home incredibly unpredictable. 
 
There’s also a tight market in public space. According to Ian Gee, brand planning director at Initiative Asia, many prime sites for brand experiences have been snapped up: “Even shopping malls are taking early reservations on their interior space for the period leading up to the Games.”


Cultural challenges 
Earlier this year Beijing’s mayor expressed disapproval of outdoor ads that promote luxury and indulgence, saying they undermine the goal of maintaining harmony between rich and poor. But his reaction does not reflect government policy. All advertising is censored – and nowhere is more heavily policed than Beijing – but the creative environment is hardly draconian. “It’s just very difficult to judge what you can and can’t do,” says Michelle Lau, managing director, Carat China. “Some cities don’t strictly follow advertising laws and get away with it.” 
 
For the 2007 Chinese New Year, CCTV, the state-run national TV station headquartered in the capital, banned the use of ‘Golden Pig’ imagery in advertising. Most Chinese TV markets ignored this directive but not Beijing. 
 
“It not only makes the rules, but is also the city most likely to abide by them,” says Gee. “Beijing media carry a lot of advertising designed to influence not just average consumers, but also those who regulate consumer markets and determine the rules by which markets – and marketers – operate.” 
 
The government may control the media but it equally wants to extract as much revenue as possible from a national advertising market expected to rank second only to the US by the time the Olympics arrive. This incubates fierce competition and a drive for innovation.

“If something doesn’t work or you’re prevented from doing something for whatever reason, you don’t stick to it, you just move on. Chinese brands are very aggressive. They are much more likely to go from zero to 30% of spend on digital overnight rather than gradually shift,” says OgilvyOne president Chris Reitermann. 

Multinationals may use the Olympics as a springboard, but aside from select brands like computer giant Lenovo, domestic firms will use the Games not to announce themselves internationally but to reach out to the Chinese hinterland. 
 
Rob Hughes, managing partner for north and west China at MindShare, detects a vibrant subculture for art and music. Young people looking for music in China rely on the internet as it is filtered less by the government than radio. 
 
MindShare used that information to promote Motorola’s MotoMusic site by signing radio DJs to alert listeners to a new track from Taiwanese star Jay Chou for exclusive download, attracting 250 million visitors to the website in a month. 
 
 High ad demand across the whole of China will be further stimulated by the 2010 World Expo in Shanghai, a more metropolitan city, which is the traditional advertising and commercial hub. But while Shanghai is seen as the country’s economic powerhouse, Beijing has a growing reputation for start-ups, notably in computing and telecommunications. 
 
These differences don’t, however, translate into different campaigns. “We’d very rarely just do a campaign for Beijing,” notes Reitermann. “Most brands focus 80-85% of budgets on Beijing, Shanghai and Guangzhou.” Cost, however, means many brands opt to test the market in smaller cities like Xian. 
 
There’s been some shift in ad spend to the north and reappraisal by agencies of Beijing’s role. “Beijing was viewed as a branch office by international agencies,” says Greg Paull, principal of consultancy R3. “You’d only open if a client needed you to be there. Now there’s enough business based in Beijing to require a fully capable office.” 
 
A multiplicity of media owners, local agencies and brokers exist all over China making “local relationships imperative” says Carat’s Lau. In particular, it makes buying airtime – TV takes a 44% share of ad spend – a complex proposition. 


Media fragmentation 
Beijing’s entrepreneurial culture seems to have exacerbated that situation. A typical Beijing resident has access to 15 CCTV channels and 10 BJTV channels, as well as 30-40 regional satellite or local cable stations. 
 
“TV stations use brokers here more than any other city so the challenge is to work through all the vendors to get airtime,” says Paull. 
 
There is a 15% ceiling on commercial airtime in peak, which has restricted supply. Tough profit targets and high demand have also led to significant inflation. “Brokers buy slots ahead of time and re-package them to agencies, but since programme schedules aren’t released until the last minute buying space can be something of a lottery,” notes Hughes. 
 
Although CCTV is a must for any national campaign it is also open to creative media suggestions. Insurance firm PICC is currently sponsoring a nationwide televised talent contest to find a cox to compete alongside the Chinese rowing team. 
 
“It’s the prerogative of media planners, creatives and clients to go to media owners with ideas,” says Hughes. “The market only opened 20 years ago so there’s little brand heritage to build on, distribution is weak and independent research is poor.” 
 
A key medium for many brands in China has been field marketing and, as ever, Nike counts among the most innovative in this regard. In May, it staged a basketball tournament around the nine gates of the old city of Beijing. Billed as “pop culture meets ancient turf wars”, DMG created a range of experiential executions to dramatise the theme, including a seven-metre high gate that players had to pass through to enter each basketball court. 
 
Previous hosts have failed to sustain the Olympic boost after the closing ceremony. That is unlikely in Beijing. “For the first time China has a polarising event in which every brand is doing something,” says Reitermann. “The influx of talent will help the industry mature. That will be its lasting impact.”