Page 380 - 2018 White Paper on the Business Environment in China
P. 380
8 White Paper on the Business Environment in China
2.13 Professional Services
Background began to outrank that of desktop for the first time at
approximately $23 billion to $21 billion. The mobile/
China’s regulation system for foreign desktop split is predicted to be $35/$20 billion in 2017,
commercial activities is often and $71/$17 billion by 2020 (Digital Crew). Companies
difficult to navigate and clear as a glass of milk. are allocating more money to digital advertising in
Companies often seek professional services from those response to rising TV advertising prices and declining
who have backgrounds in such things as commercial readership of print media. The rapid development of
transaction and regulation compliance. Establishing digital and mobile advertising has seriously challenged
a representative office, joint-venture company or a traditional advertisers. For example, Baidu—on online
wholly foreign owned subsidiary requires compliance portal–has already surpassed CCTV to become the
with complicated contract approval requirements, largest advertiser in China, forcing CCTV to collaborate
business registration requirements, taxation with new players. Digital advertising focuses more on
regulations and statutes, and labor regulations. Many consumer participation, branded entertainment, and
U.S. banks, accountants, attorneys, and consultants fan-centered advertising strategies. The pervasive use
have established offices in China and are familiar with of digital advertising also means that it is becoming
Chinese requirements. Some Chinese professional more difficult for Chinese regulators to administer
service providers also have substantial experience advertising, thus leading to an increasing number
serving foreign clients. of illegal, offensive, and controversial ads in China.
Controversial advertising not only includes problematic
Advertising products, but also the problematic use of questionable
symbols, images, and words (Li).
Expenditure on advertising in China is predicted to
reach more than $86 billion – an increase of 7.8 percent Initially, Chinese professionals were more interested
on 2016. GroupM states that the growth level has been in working at foreign advertising agencies since they
supported by a combination of consumer confidence provided better salaries, benefits, and training. Chinese
and increasing urbanization of China’s populace. advertising agencies were generally viewed as having
However, digital advertising spend is expected to fall a lower status. In the last decade, foreign and Chinese
slightly – from 29.5 percent in 2016 to 21.5 percent in advertising practices have converged, largely because
2017. Despite a slight fall in spending, strong growth is of the constant exchange of advertising personnel,
anticipated in the digital advertising sphere. According ideas, and practices. While Chinese advertising agencies
to market research company Statista, the size of the in the past offered lower pay to employees, starting in
digital advertising revenue market in China will be the mid-2000s Chinese ad agencies offered even higher
nearly $44 billion in 2017, the biggest segment of which salaries to professionals who already had experience in
is online search at more than $30 billion. This trend is foreign advertising practices. Now ads in the Chinese
expected to continue well into the future, with search market featuring foreign and Chinese brands look very
advertising remaining substantially larger than other similar. Both types of ads stress affective connections
segments such as video and banner ads, social media with consumers in order to generate demand. A
advertising, and classifieds. Since China joined the prominent theme in Chinese advertising is the selling
World Trade Organization, Chinese advertising has of nationalism and cosmopolitanism. Both foreign
not only been shaped by loosening regulations, but and Chinese brands resort to the promotion of these
also by digital technologies. Data collected by Statista concepts in their ads. However, there are some subtle
during 2016 indicated that mobile ad revenue in China differences given their different origins, perceptions, and
380
2.13 Professional Services
Background began to outrank that of desktop for the first time at
approximately $23 billion to $21 billion. The mobile/
China’s regulation system for foreign desktop split is predicted to be $35/$20 billion in 2017,
commercial activities is often and $71/$17 billion by 2020 (Digital Crew). Companies
difficult to navigate and clear as a glass of milk. are allocating more money to digital advertising in
Companies often seek professional services from those response to rising TV advertising prices and declining
who have backgrounds in such things as commercial readership of print media. The rapid development of
transaction and regulation compliance. Establishing digital and mobile advertising has seriously challenged
a representative office, joint-venture company or a traditional advertisers. For example, Baidu—on online
wholly foreign owned subsidiary requires compliance portal–has already surpassed CCTV to become the
with complicated contract approval requirements, largest advertiser in China, forcing CCTV to collaborate
business registration requirements, taxation with new players. Digital advertising focuses more on
regulations and statutes, and labor regulations. Many consumer participation, branded entertainment, and
U.S. banks, accountants, attorneys, and consultants fan-centered advertising strategies. The pervasive use
have established offices in China and are familiar with of digital advertising also means that it is becoming
Chinese requirements. Some Chinese professional more difficult for Chinese regulators to administer
service providers also have substantial experience advertising, thus leading to an increasing number
serving foreign clients. of illegal, offensive, and controversial ads in China.
Controversial advertising not only includes problematic
Advertising products, but also the problematic use of questionable
symbols, images, and words (Li).
Expenditure on advertising in China is predicted to
reach more than $86 billion – an increase of 7.8 percent Initially, Chinese professionals were more interested
on 2016. GroupM states that the growth level has been in working at foreign advertising agencies since they
supported by a combination of consumer confidence provided better salaries, benefits, and training. Chinese
and increasing urbanization of China’s populace. advertising agencies were generally viewed as having
However, digital advertising spend is expected to fall a lower status. In the last decade, foreign and Chinese
slightly – from 29.5 percent in 2016 to 21.5 percent in advertising practices have converged, largely because
2017. Despite a slight fall in spending, strong growth is of the constant exchange of advertising personnel,
anticipated in the digital advertising sphere. According ideas, and practices. While Chinese advertising agencies
to market research company Statista, the size of the in the past offered lower pay to employees, starting in
digital advertising revenue market in China will be the mid-2000s Chinese ad agencies offered even higher
nearly $44 billion in 2017, the biggest segment of which salaries to professionals who already had experience in
is online search at more than $30 billion. This trend is foreign advertising practices. Now ads in the Chinese
expected to continue well into the future, with search market featuring foreign and Chinese brands look very
advertising remaining substantially larger than other similar. Both types of ads stress affective connections
segments such as video and banner ads, social media with consumers in order to generate demand. A
advertising, and classifieds. Since China joined the prominent theme in Chinese advertising is the selling
World Trade Organization, Chinese advertising has of nationalism and cosmopolitanism. Both foreign
not only been shaped by loosening regulations, but and Chinese brands resort to the promotion of these
also by digital technologies. Data collected by Statista concepts in their ads. However, there are some subtle
during 2016 indicated that mobile ad revenue in China differences given their different origins, perceptions, and
380
