Ad Industry Finally Gaining Some Respect in China

Spirits Up at Conference Amid Signs Government Now Values Importance of Advertising as a Business

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NANCHANG, China ( -- With ad spending growth still in the double digits, ad agency executives in China are in buoyant spirits, but the mood at this year's China International Advertising Festival in Nanchang is especially positive, thanks to recent signs the government is looking to invest in and recognize the importance of advertising as a business.

Government officials and agency leaders are buzzing about a speech given last weekend in Chengdu by Liu Fan, vice minister of the State Administration of Industry and Commerce (SAIC), which regulates China's ad market.

Advertising is "fundamental to economic development and sustaining a harmonious society," he said in Chengdu, and so the SAIC will incorporate that industry as a "pillar" of China's economy in an important five-year plan that goes into effect in January 2011.

Until now, China's government has largely regarded advertising -- as well as entertainment and media -- as a tool for propaganda, a way for the government to share state-sanctioned news at home while selling China through soft-power communication overseas.

Mr. Liu's speech suggested the government's attitude is changing because it now sees the ad business as, well, a business. "China now recognizes advertising as a commercial activity," said Alan Rutherford, the International Advertising Association's London-based chairman-world president, while sipping jasmine tea in a smoky hotel lobby in Nanchang. "There will be a lot more focus on creative development and that will help China build global brands and grow creative talent."

Mr. Liu also announced some changes in authority for advertising standards and practices. Whereas this role used to be entirely the responsibility of national bodies such as the State Administration of Radio, Film and Television (SARFT), it will now be shared between national and local regulators.

"Call me a cockeyed optimist, but this news sounds mighty good to me," said Tim Love, Omnicom's CEO for Asia/Pacific, the Middle East and Africa in Singapore, in an email to Ad Age.

China has 31 provinces, many with completely different dialects and cultures. A pluralistic overview of advertising standards and practices will better reflect the differences in China. It could also pave the way for local officials to increase -- or decrease -- the amount of airtime on TV and outdoor space that can be dedicated to advertising. An increase would be heartily welcomed by advertisers, who find media time increasingly expensive in this fast-growing market.

The SAIC will also take a stronger hand in dealing with deceptive advertising, which are a particular concern in the real estate industry.

The festival, an annual event held in a different city each fall, only attracted local agency representatives a decade ago. Today, major global names turn up.

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