In this episode of The Negotiation, we talk with Mathias Chaillou, a man with 2 decades of experience working for large multinational advertising groups like Carat, much of which was in China, and is now Global Head of Strategic Operations for Zenith, a Publicis company. On today’s show we discuss how China’s video platforms like Youku, QQ Video and iQIYI not only differ from YouTube and Netflix but also surprisingly dwarf them in viewership, the formula for successfully securing business in China as an agency, the risk tolerance of Chinese brands and how it’s changed over the years, and how the agency model is changing in China.
Show Notes
Today on The Negotiation, we talk with Mathias Chaillou, Global Head of Strategic Operations at Zenith. He relates his decade-long traditional marketing and, eventually, eCommerce career in China. In the days when TV was the medium of choice in the advertising industry, everything was about the cost-per-rating point around roughly a thousand TV channels, along with continuous negotiations with around 26 provinces.
Some provinces were more traditionally-minded than others when it comes to marketing communications. Because of varying points-of-view within different regions, Mathias likes to think of the whole of China as a “continent”, and each province as a “country”.
Two factors accelerated China’s move to digital marketing. The first, according to Mathias, is Weibo, which is regarded as China’s Twitter. The second is Youku, which functions similarly to YouTube. A lot of money began to flow through social media and online TV at a much faster rate than in the West. In fact, alongside Youku, Baidu and Tencent (and their subsidiaries) together are much bigger than YouTube.
There is a lot of pitching involved, particularly with agencies, to obtain contracts. However, agency-client relationships tend to be much shorter than they are in the West (usually under two years). Turnaround times are also relatively quick (around three weeks in China as compared to three months in the West for the same project). The reason for this urgency is the fact that China had to catch up to the West in many ways when digital marketing rose to prominence. This level of speed is part of what defines the business culture in China today. In short, “Don’t look back; just move fast and move quickly,” says Mathias.
To succeed as a foreign company in China, you need to be ready to bring something to the market that sets you apart from the big local players. This could be a unique strategy or new technology. Without this “Unique Selling Proposition”, local brands will beat the average multinational on cost and cultural understanding. Aside from that—and just as importantly—you must build a very tight relationship with your local partners, which starts even before the first formal meeting begins. The company that understands and appreciates nuance will thrive.
Above all, adaptation is key.
What is The Negotiation?
Despite being the world’s most potent economic area, Asia can be one of the most challenging regions to navigate and manage well for foreign brands. However, plenty of positive stories exist and more are emerging every day as brands start to see success in engaging and deploying appropriate market growth strategies – with the help of specialists.
The Negotiation is an interview show that showcases those hard-to-find success stories and chats with the incredible leaders behind them, teasing out the nuances and digging into the details that can make market growth in APAC a winning proposition.