Despite China's size, it is unclear if both will succeed at setting up research systems.
Sofres is to release its first data next month if a planned joint venture with China's national broadcaster, CCTV, gets off the ground. Nielsen, operating as Survey Research Group in Asia, started releasing diary results in China in March and will expand into people meters this fall.
Nielsen's SRG has enjoyed a near-monopoly in most of Asia, but Sofres' purchase last year of Australian market researcher Frank Small & Associates gave Sofres a presence in 11 countries in Asia. Japan was added last month, in a joint-venture with Japan Statistics & Research.
The shortage of research in China that meets international standards has long been a major frustration to multinational marketers and their agencies.
RIVAL PLANS ATTRACT SPONSORS
Grey Advertising, whose international client Procter & Gamble Co. is a major advertiser in China, is sponsoring the SRG research.
The Hong Kong-based Association of Accredited Advertising Agents, which includes P&G's other three international agencies ( Leo Burnett Co., D'Arcy Masius Benton & Bowles and Saatchi & Saatchi Advertising), is lining up with Sofres out of a need for a "common currency" for national TV audience measurement, said Andrew Green, a former SRG media director and now media research director of Saatchi & Saatchi, Hong Kong. In 1995 alone, 107 studies were done by TV stations and multinational agencies.
Sofres has the big advantage of plugging into existing CCTV research. CCTV's research arm, Central Viewers Survey & Consulting Center (CVSC), has for eight years compiled weekly diary studies in 12,000 homes in 54 cities in cooperation with 150 local broadcasters. Sofres will add sophisticated software and the reliability Western marketers expect.
The Sofres system will produce "a cartload of data," said Grey's regional media director for Asia Pacific, Guy Forrestier-Walker. "Who will have time to go through it?"
In March, rival SRG released the first results from a two-week diary study in 14 cities. SRG covers the centers that attract 80% of China's $3 billion in ad spending.
KEY ROLE FOR LOCAL CHANNELS
Two main issues are funding and support by local channels.
Sofres promises six months of weekly data for $117,000 per agency. Additional funding must come from CCTV's local TV channels. SRG said it can offer three-city people-meter data for $400,000 a year per agency-if 10 agencies sign up, which seems unlikely.
The economics of Sofres' plan are questionable, insisted Andrew Floyd, managing director, SRG Research Services. "SRG's China costs are not out of line with those of other Hong Kong-based research companies," he said.
Whether Sofres can deliver international standard data for its quoted price will depend on its ability to apply stringent quality control over its dispersed mainland Chinese market researchers-"a valid concern," admitted Michael Jones, Dentsu Young & Rubicam's executive media director for Hong Kong and China.
It also depends on getting funding from local TV. At present, CCTV subcontracts much of the data collection to provincial stations. Under the Sofres joint-venture, local channels must not only buy back data they helped collect but also make sure research standards are met. Costs could be higher and ratings lower.
"If you are station X currently getting 25% of prime-time viewing, are you going to want to contribute to a survey that shows your prime-time rating has dropped to 10% with the different methodology?" asked DMB&B Regional Media Director Kevin Malloy.
Despite doubts over financing and standards, CVSC's relationship with the local Chinese TV channels gives Sofres a major advantage over SRG.
Gary Brown, Leo Burnett's regional media director, said Nielsen needs to get support from the Chinese TV stations because the ad industry cannot carry the burden of funding the research.
"Any approach which does not have at least the prospect of support from the local stations and CCTV is doomed to failure," he said. "Either the powers that be in China will simply undermine and kill it ... or, long-term, there will be a colossal and unsustainable cost to agencies."