Shanghai Surprise

Shanghai Surprise

A View from DDB in Shanghai

Today's China and the hyperconnected Chinese marketplace are concepts so big it can be hard to wrap your intellectual arms around them. It helps to focus on only a few impressive facts at a time.

One, China is rapidly turning urban and middle class. About 90 cities in China have a middle-class population of at least 250,000; the U.S. and Canada together have fewer than 70.

Two, the country's economy is becoming consumer driven. China already ranks as the number one or two market in the world for consumer electronics, shoes and jewelry, says the Boston Consulting Group.

Three, China is adopting new technologies faster than nearly every other developing country. Mobile telephones are ubiquitous in cities. The country has more than 400 million Internet users, most with broadband access. Most importantly, China is at the forefront of social media and digital connectivity, because in China social media is the mainstream media - more trusted and commonly used than state-controlled public media. Experts at Boston Consulting warn that Western companies, including Facebook and Twitter, will soon be fighting Chinese competitors on U.S. turf. For instance, the Chinese version of Twitter, Sina Weibo (pronounced "way-bore"), plans to release an English version this year. Tom Cruise, Bill Gates and other celebs have been Weibo-ing since last June. So far, Sina Weibo has about 140 million users.

For all these reasons, we sought the in-the-trenches perspective of Dick van Motman, CEO of DDB Greater China Group, which includes digital agency Tribal DDB. He is mainly Dutch and Indonesian and left Holland for Asia when he was 29. We met him in the largest office of DDB's Chinese network, located in booming Shanghai - the hotspot for China's new digital marketing scene. In a business park inhabited by digital ad and PR shops such as AKQA, van Motman works from an orderly, glass-walled work space for clients including McDonald's, Philips, Unilever, Volkswagen and Pepsi. Across town, corporate skyscrapers house rival agencies Ogilvy and JWT. 

The ddb office's calm is an illusion: last year the shop crafted a cross-platform campaign for McDonald's that was so disruptive the Chinese government shut it down. McDonald's used the Web to invite people to bring their discount coupons from rival restaurants to mcd outlets. Word got around and McDonald's restaurants got so crowded it upset the industry's competitive balance, according to government officials. Hence the shutdown.

Van Motman says that using digital connections for marketing is a matter of survival in China. Digital communication is what unites the sprawling, rapidly changing country. "China's sheer size means it has to depend on digital media to simply get things done," van Motman says. It helps that there are no legacy systems sucking up resources and consumer attention. "Here it is easier to leapfrog over platforms," he notes. He points to the penetration of smartphones, which is greater in China than in the West. "Long before iPhones, China had Nokia smartphones," van Motman says. Online instant messaging is also well established. im service QQ has 600 million users in China alone, compared with 200 million Twitter members worldwide. 

Indeed, social media and mobile have become the glue that holds together hyperconnected Chinese consumers and their favored brands. In a country of "only" children, due to the government's one-child-per-family policy, social media offers the younger generation a chance to connect with the "brothers and sisters" that they don't have at home, agency insiders say. Natalie Lam, former executive creative director at the Shanghai office of WPP's OgilvyOne, says, "Social media is second nature," an essential part of the lives of young consumers in China. In van Motman's words: "Forget the quiet, submissive, passive image of Chinese. This generation is passionate about expressing their opinion online." He explains that, as a result, the county's social sites, which started out as copies of U.S. services, now have far more features than what we find on Facebook, Twitter, LinkedIn and others.  For example, AKQA Shanghai used social media and mobile to entice a whopping 103 million people to send branded online New Year's video greetings to one another in a campaign for Lipton Tea last year. 

To harness the Chinese version of mobile and social connectivity, the DDB Group in Shanghai is broken into three divisions. Working in an open floor plan are digital shop Tribal ddb, direct marketing specialist Rapp and ad agency ddb. But the divisions are mainly for show, to communicate "expertise and credibility" to clients, says van Motman. "In reality, the entire staff strives to be both digitally oriented and brand-savvy. The divisions share a single p&l, Tribal and DDB creatives work side-by-side and incentives are handed out to groups," not individuals, van Motman says.

Hires are decided by the candidates' "ability to play together." Executive coaches are brought in to teach managers how to see the big picture and collaborate better.

To help clients such as Johnson & Johnson keep up with the digital changes in China, DDB Shanghai hosts them for training sessions called "digital days," says van Motman. More than 30 people from the client company spend the day at the agency studying key topics, such as how to build brands through social creativity and improve digital roi, according to Daryl Ho, Tribal business director.

Van Motman himself seems like a harried ringleader, working to keep control in a cross-platform, interconnected marketplace that is changing under his feet. His territory is a consumer base that went from no choice to endless choices overnight, and where new high-rises - especially in Shanghai - have risen in the time it takes a U.S. city to approve a new street sign.

Van Motman's office area is dominated by huge written slogans from ddb founder Bill Bernbach about the value of  "creativity." But ironically the word never pops up in our conversation. Motman finally notices and takes a moment to explain. In China the relevant word isn't creativity, but "innovation," he says, because it takes into account the importance of technology, change and speed. And, of course, connections.

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