China's Madison Avenue

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Hong Kong was once the marketing capital of Greater China, but the territory has become Chicago to Shanghai’s New York.

Many marketers have relocated their headquarters for the region to mainland China, knowing they have to be on the ground to have any chance of getting that vast market right. With more than 1 billion consumers, they can’t afford to get it wrong.

While many government-related businesses in the technology and telecom sector headed to Beijing, China’s capital, many consumer goods marketers like Unilever, McDonald’s Corp., Coca-Cola Co., Siemens, Heineken and General Motors Corp. opted for Shanghai.

Given the city’s jet-set "Paris of the East" image in the 1920s and 1930s, its rapid transformation into a marketing hub is no surprise. The city is home to some of the most Westernized, brand-friendly, trendy consumers in China.

Shanghai has also become China’s Madison Avenue, with significant offices for just about every major multinational agency network, including WPP Group’s JWT and Publicis Groupe’s Leo Burnett. It is also the first stop for smaller shops that want an office in China, such as Omnicom Group’s TBWA Worldwide, M&C Saatchi, Wieden+Kennedy and Havas-owned Arnold Worldwide.

“The center of creativity has shifted from Hong Kong to Shanghai,” said Tom Doctoroff, JWT’s area director, Northeast Asia & CEO, China, who relocated to Shanghai from Hong Kong seven years ago. “I don't know whether this is a result of increasing skills among local advertising execs or a massive talent shift [moving from Hong Kong] north of the border. I suspect it's a 50-50 combination.”

A walk down this colorful, cosmopolitan city’s major arteries supplies ample reasons why foreigners, whether from London or Hong Kong, choose to live in this lively city.

The riverside strip called the Bund is home to some of the best restaurants and nightclubs in the world, such as Jean-Georges, M on the Bund, Laris and Bar Rouge, as well as a multi-level Armani flagship store. Business and shopping districts like Nanjing Rd. West and Xintiandi also are packed with tempting restaurants and luxury retail shops, like the three-story “Sony Gallery” that opened last year in Huaihai Road, the first such Sony lifestyle outlet in Asia outside Japan.

Fast Facts: Shanghai

Population: 13.52 million
GDP (2004): $89.76 billion
TV households (2004 est): 3,449,000
Adspend (2004): $2.39 billion*
Adspend (2003): $1.67 billion*
Year-on-year increase: 42.5%*
Adspend as a percentage of GDP (2004): 2.7%
Avg. min. viewed per day per viewer of all channels (aged 4+): 166.8
Basic cable subscription cost (per month): $1.57
*based on published rate card

Average cost of 30”spot during prime time on Shanghai TV - News & Variety, the city’s most-watched local channel (based on published rate card)

18:45-19:10 - $8,434
19:10-19:55 - $6,024
20:00-21:00 - $3,886
21:00-21:40 - $2,610

Top 10 brands by adspend on TV (2004):
1. Oil of Olay (Procter & Gamble)
2. KFC ( Yum! Brands)
3. McDonald’s (McDonald’s Corp.)
4. Rejoice (Procter & Gamble)
5. Nestle - coffee, tea and powdered dairy (Nestle)
6. SK&F - OTC pharmaceutical (SK&F)
7. Danone (Danone)
8. Colgate (Colgate-Palmolive)
9. Huangjindadang - tonic/vitamin
10. Pantene (Procter & Gamble)
(Local channels only, based on rate card.)

Top 10 advertising categories on TV (2004):
1. Skin care
2. Tonics & vitamins
3. Hair care
4. Fast food
5. Passenger vehicles
6. Toilet & liquid soap
7. Entertainment & cultural exhibitions
8. Toothpaste & oral hygiene
9. Skin cleansers
10. Communication equipment & services
(Local channels only, based on rate card.)

Top 5 local channels by ad revenue:
1. Dragon TV
2. East Movie Channel
3. Shanghai TV - News & Variety
4. Shanghai TV - Movie & Drama
5. Shanghai TV - Sports

Sources: Nielsen Media Research & AGB Nielsen Media Research, China

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