Western Olympic Ads Cheerlead for China





By DAVID BARBOZA
Published: July 20, 2008

BEIJING — It is becoming increasingly clear which nation global corporations will be rooting for at this summer’s Olympics: China.

Or at least that’s what it looks like from advertisements here. McDonald’s is running a “Cheer for China” television ad. Nike ads feature China’s star hurdler, Liu Xiang, and other Chinese athletes besting foreign competitors. Earlier this year, Pepsi even painted its familiar blue cans red for a limited edition “Go Red for China” promotion.

The campaigns for Western companies are part of an advertising blitz the likes of which this ostensibly communist nation has never seen. Ads are papered over bus shelters, projected on giant outdoor television screens and plastered on billboards. Commercials even flicker at commuters as they zoom through subway tunnels.

China, already the world’s second-largest advertising market, after the United States, is a dream for consumer product companies. “For most international brands here, China is the growth market for the next 10 years,” said Jonathan Chajet, strategic director at Interbrand, which consults on brands.

A record 63 companies have become sponsors or partners of the Beijing Olympics. Olympic-related advertising in China could reach $4 billion to $6 billion this year, according to CSM, a Beijing marketing research firm.

“You’ve never seen the Olympics in a market that has such domestic, commercial scale,” says Michael Wood, the chief executive for greater China at Leo Burnett, the global advertising agency. “When the Olympics were in Los Angeles and Atlanta, the U.S. market was already fully developed.”

The promise of selling a billion bottles of Coke to China’s 1.3 billion people is no longer a pipe dream; last year, 24 billion bottles of Coca-Cola were sold in China. KFC, a unit of Yum Brands, has more than 2,000 stores here. McDonald’s and Starbucks are ubiquitous. And Nokia, the cellphone maker, sold about 70 million phones to Chinese consumers in 2007, racking up sales of $10 billion.

Now those global brands are trying to extend their reach beyond China’s wealthiest cities. But China’s growing economic clout and increasing nationalism among its youth — as well as the newfound strength of its homegrown brands — pose challenges for foreign companies trying to woo its growing middle class.

“For most international brands, this is a double-edged sword,” said Mr. Chajet of Interbrand. “They’re premium, high-tech and status brands. But there’s rising nationalism, and the Olympics is a rallying cry for the Chinese, who are looking for a reason not to buy foreign.”

More at: The New York Times