The key global benchmark of PR agency rankings, industry size and global comms trends.
The most creatively awarded PR campaigns and agencies in the world.
The Holmes Report profiles marketing and communications innovators from across North America and EMEA.
In-depth annual research into the PR industry's efforts to raise creative standards.
Coverage of the Cannes Lions from the Holmes Report in association with H+K Strategies.
Creative work, trends and views from the global public relations industry.
Dedicated to exploring the new frontiers of PR as it dives deeper into social media, content and analytics.
Our coverage of key technology PR trends and challenges around the world.
From brand marketing to conscious consumerism, coverage of key marketing and PR trends worldwide.
Coverage of healthcare PR and marketing.
Financial communications, sector news and mergers and acquisitions.
Coverage of global corporate reputation and communications news and trends.
The world's biggest PR awards programme, dedicated to benchmarking the best PR work from across the globe.
A high-level forum designed for senior practitioners to address the critical issues facing the profession.
Exploring the innovation and disruption that is redefining influence and engagement.
The Holmes Report's annual selections for PR Agencies of the Year, across all of the world's major markets.
Bringing together in-house comms leaders with PR firms to discuss critical global issues.
For all of China’s explosive PR growth, most international firms are powered by MNC accounts. Are they ready to crack Chinese client budgets?
Arun Sudhaman 03 Dec 2012 // 12:00AM GMT
By all accounts, China’s public relations market is booming. The country’s PR trade body estimates that it is worth $4.4bn, fuelled by growth of 20 percent per year. Digital communications becomes ever more sophisticated, thanks to the rapid rise of QQ and Weibo, and the best of the country’s PR work - illustrated by the award-winning IBM Mr Bao campaign - is as engrossing as anything the world has to offer.
Why, then, is Johan Bjorksten, founder of one of the country’s most successful PR firms, unsatisfied? The Swede, once a star on Chinese TV, is simply not keen on working with local Chinese companies. It seems remarkable, given his agency’s growth, and the rise of Chinese companies like Lenovo and Huawei on the global stage.
“Why bother?” asks Bjorksten. “They are slow to pay and they have ridiculous processes. And they often have unethical demands.”
This is not idle chatter. Bjorksten founded Eastwei in 1994, turning the agency into one of the country’s fastest-growing local players before selling out to MSL in 2010. His agency continues to prosper, growing at upwards of 20 percent per year, and Bjorksten, with partner Par Uhlin, now oversees a formidable MSLGroup offering in China.
Most agency heads in those circumstances or, indeed, in circumstances much worse, would be unrelentingly ebullient. Instead, Bjorksten cuts a more pensive figure. Canvass other international firms and it appears Bjorksten’s concerns are not confined to him alone. For all of China’s explosive PR growth, most international firms are powered by MNC accounts. Chinese companies, by and large, prefer the counsel of local firms such as BlueFocus and D&S Consulting.
CIPR secretary-general Dali Zhao describes it as an “interesting” trend. “MNCs would prefer to work with MNC firms, whereas local companies prefer local agencies,” he explains. “Maybe there is a cultural gap.”
“I do think there are communication and trust issues between Chinese companies and their PR partners. Chinese companies would prefer to use PR companies with a similar culture and corporate structure.”
D&S VP Bill Shan
Is money the issue? Not according to D&S Consulting VP Bill Shan, who says that domestic PR budgets are rising fast. Instead, like Zhao, Shan puts it down to a cultural mismatch.
“Their working processes and thinking are really different compared to international clients,” says Shan. “If international firms want to serve local clients, then need to overcome some barriers.”
For example, says Shan, Chinese companies are usually unwilling to pay by the hour, preferring a project fee once results meet their expectations. Often, furthermore, PR is relegated to a junior role within the organization, sometimes reporting into sales and marketing, without any clear influence over a company’s policies. And, of course, ethical issues hover over the entire equation, in a market where media corruption is rife.
For Bjorksten at least, it is simply not worth the hassle. “We’re still growing at 20-plus percent just from MNCs.”
Not everyone is as dismissive. Many international firms are focusing plenty of effort on building business with local companies, despite the challenges that exist.
“The reality is Chinese companies are becoming world beaters but need to raise their game in the communications stakes,” says Weber Shandwick Shanghai MD Darren Burns. “Why would you abandon this exciting opportunity? We are in China to serve all companies.”
For Bjorksten, there is no point in pursuing local Chinese companies unless his firm can become a genuine trusted advisor. To do that, he adds, requires a direct relationship with the chairman or CEO.
“You have to deal with senior executives who genuinely want to build their reputations,” agrees Burns. “They have to know they need help and be willing to invest and stay the course.”
Companies that understand this, says Bjorksten, are often those that are expanding internationally. Numerous Chinese brands now work with international PR firms outside China, including Huawei (Fleishman-Hillard and Burson-Marsteller); Lenovo (Text 100 and Ogilvy PR); Li Ning (Fleishman-Hillard); and Haier (MSLGroup, via local acquisition Genedigi).
Another example is Suntech Power, which last year hired Weber Shandwick to handle its communications both inside and outside China. The energy company’s director of investor relations, Rory Macpherson believes that the advantages local firms may have once had are narrowing.
“Chinese PR firms may have short-term advantages of having stronger connections with local media and media influencers, due to a longer operating history, and potentially better understanding of local media practices,” says Macpherson. “Though, in theory, these could largely be overcome as many international PR firms tend to shift to a high degree of localization by hiring the best local talent.”
For a company like Suntech, the benefits of an international firm are clear, particularly when it comes to their ability to understand different markets. Yet, within China, the situation is much less simple. “Maybe international firms can handle strategic consulting,” says Shan. “But for implementation, relationships and execution, they are not very strong.”
“Some Chinese companies expect miracles in a short space of time,” admits Burns. “They need to know that building a reputation is a process, not a one-off event.”
The CIPR’s Zhao notes that, for Chinese companies, the very concept of public relations is new. “The concept of PR entered into China with the entry of MNC companies,” notes Zhao. “So the Chinese PR industry has been evolving.”
CIPR's Dali Zhao
However, Zhao believes that the emergence of Chinese companies will ultimately benefit international firms, pointing to the Chinese government’s decision to hire Hill & Knowlton for the Beijing Olympics assignment as a seminal event.
The irony, perhaps, is that China’s local agencies have little trouble attracting international business. Indeed both D&S and BlueFocus count at least half of their business from foreign companies. And BlueFocus COO Peter Mao, for one, appears unconcerned about international firms eroding his domestic client base.
“It might be that international agencies don’t understand the operation in Chinese terms,” says Mao. “But we don’t see any gap between international and local clients.”
The SABRE Awards is the world's largest PR awards program, running across six continents.
Innovative public relations work from around the world.
We feel that the views of the reader are as important as the views of the writer. Please contact us at [email protected]Signup For Our Newsletter Media Kits/Editorial Calendar Jobs Postings Sitemap
© The Holmes Report 2014