The way China's economy has roared along, it's been easy for multinational marketers to forget that the country is run by a Communist Party with a firm grip on, well, most everything. They are getting a stark reminder in Beijing this summer.
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The government is trying to protect sponsors from ambush marketing and guerrilla tactics by non-Olympic sponsors, a common problem at past Olympics. "It's all part of an anti-ambush effort," said David Wolf, a Beijing marketing consultant.
When making its bid to become an Olympics host city, Beijing's government promised the International Olympic Committee it would protect the legal rights of sponsors, and it's working hard to keep that promise. The government "really wants to protect sponsors in any media as much as it can," said Jim Liu, Shanghai-based managing partner, China, at Group M's outdoor-media division, Kinetic.
'One step too far'
But even Olympics sponsors are having a hard time navigating the changes in China's outdoor-media terrain, as access to coveted outdoor sites is being cut at a time when desire for space is sky high.
"I'm quite surprised by the amount of control they are able to do," said George Gallate, Euro RSCG's Shanghai-based CEO, Asia/Pacific. "But this degree of control is one step too far in one of the most important aspects of an open economy, the right to advertise."
Throughout 2007, Beijing's government methodically dismantled billboards and poster sites erected by unofficial media vendors, leaving only the sites that could be easily controlled. "There used to be massive super sites on the freeway to [Beijing's] airport, but they've all been torn down. They're really into controlling the visual pollution," Mr. Gallate said .
In mid-May, the government invalidated existing media contracts for outdoor media such as posters, bus shelters and subway advertising in Beijing as well as at the city's international airport, forcing Olympic sponsors to renegotiate ad space for those venues in bundled packages.
But rather than helping, the government's actions have frustrated advertisers, who are having a tough time getting new placements in outdoor media. "Even the biggest guys can't get what they want. Some very big clients have just gotten a few light boxes," said one media executive in Shanghai who did not want to identified. "There seem to be a lot of underhand deals going on, some relating to money and some simply who you know. [The frustration] really comes down to [the fact that] they don't have choice. They just have to take what they get."
The regulations for outdoor media don't apply to TV and print media or to poster ads in taxis. But traditional media vendors have also been strictly cautioned by the Olympics organizing committee to carry advertising only for Olympics sponsors or partners during the games.
The government's worries go beyond Olympics sponsors. Censors have banned distribution of the English-language version of Time Out, a popular monthly guide for foreign residents and visitors to where to find the hippest restaurants, shops and nightlife. Time Out hasn't published anything racy or politically sensitive enough to warrant censorship, but the potential for trouble was enough to put the magazine out of commission until after the games are over.
And China's government is showing its power in other ways. It has ordered China Telecom, which controls fixed-line telecom services; China Mobile, the world's-largest mobile-phone service provider; and internet provider China Netcom Corp. to stop adding new customers in August. The official reason is that it wants service providers to focus on providing good service during the Olympics, but it's also a move to block anyone who might take advantage of the games to protest by stopping people from adding new ph