Head of production at MPC Shanghai Jamie Loudon discusses the rapid rise of the Chinese advertising market and how it's set to dominate in 2021 and beyond
I’ve been involved in the cut and thrust world of VFX for almost 15 years. In that time - almost exclusively at MPC - I’ve been fortunate to get a taste of how different global advertising markets operate. I began in London, then feet first into the frenzied pace of Mexico City, followed by the excitement, big brands and A-list directors of Los Angeles before finding myself in Shanghai, where I’ve spent the last two years.
I can honestly say the China market and Asia in general is a different beast. A non-stop, frantic, behemoth. China’s advertising industry, like the Chinese economy, especially here in Shanghai, has grown exponentially over the past decade.
I can sense that rapid change continuing unabated, regardless of the Covid-19 global slow-down. The market here is maturing, evolving, developing before our eyes – almost, you might say, faster than it can keep up.
Let’s delve deeper into some numbers. In terms of advertising spend the Chinese industry is second only to the United States. A distant second for sure, with $87.53b spent in 2019 compared to $243b in the US, but second none-the less. And almost double that of third-place Japan. But with Covid-19 still hitting the US you would expect the 2020 figures to drift closer.
The way brands now target consumers has transformed dramatically over the last few years linked strongly to the power and usage of mobile internet. China is the largest telecom market in the world. In 2019 mobile subscribers with telecommunication companies in China reached 1.5b. Home broadband speed has also risen substantially. In December 2017 only 38% of Chinese households had internet speed in excess of 100mbps. Now that number is close to 90%.
A quick glance at China’s fastest growing industries reveals a close link to the possibilities of digital advertising. Internet services, e-commerce and online gaming are projected to be amongst the top sectors in terms of growth for 2021. And looking further ahead, China is spearheading the rise of 5G capabilities. By 2025 it is expected to be the world’s largest and leading 5G market. These developments have created an industry of vast potential. Chinese tech giants have created platforms that allow brands to penetrate the consumer market in ways that until recently were not possible.
To western eyes you can argue that the Chinese industry is still developing in terms of what we perceive as creatively-led campaigns and the origination of strong, bold ideas. You only have to keep abreast of the local industry events and festivals to see that China is underrepresented when it comes to creative recognition. The region’s creative festivals are dominated by Australia and New Zealand, with Japan, Thailand and Vietnam also showcasing strong work.
But it’s important to note that both Chinese clients and agencies judge a campaign’s success based on ROI, not awards on a shelf. In that sense it is still a very traditional advertising landscape – and based on delivering sales and clear consumer growth, a successful one.
Due to its traditional outlook, there is a lack of forums for engagement and discussion of creative work, places where likeminded industry members can view, engage in and promote their work. This is an area of the industry that is developing slowly and I’m confident will expand over the next few years.
China’s advertising industry has thrown itself into the digital revolution. It’s growth in terms of technology and potential outreach will send seismic shocks throughout the global industry in years to come.
At MPC Shanghai, it’s been a thrill to be part of such a fascinating and growing industry. It has been a privilege to gain a first-hand sense of China’s growing importance and prominence in global advertising. Eyes are moving Eastward to tap into this massive potential.
As a creative company, we hold a certain responsibility to help guide and support our partners, whether they be agencies, directors or brands, to ensure the end product is as good as it can be when viewed on whatever screen people choose to view it on. We have grown from what used to be seen as a ‘post-vendor’ to a creative partner. Clients look to us to be part of the creative process and offer insight and solutions. To be creators.
One of the impacts of Covid-19 is a greater onus on companies like MPC to play a bigger role in creative guidance and leadership. With Covid-19 curtailing international travel, greater opportunity has arisen for talent within China to showcase what it can do. We have felt this at MPC Shanghai with a significant increase in demand for our in-house directing talent. But local directing talent within China has also benefited and some memorable work has been produced this year. In different circumstances that work would undoubtedly have gone to international directors.
China’s unparalleled scale and technological growth, coupled with far greater accessibility and potential outreach, has placed the industry amongst the world leaders. But how it harnesses that power, and how it develops the creative content that is produced, is sure to make it a market to keep your eye on.
Professionally, there’s no place I’d rather be.
- Jamie Loudon, head of production, MPC Shanghai