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.”
To win over Chinese consumers, Adidas, which already has more than 4,000 stores in China, has new television and print ads showing legions of everyday Chinese guiding the country’s top athletes to gold medal performances. The campaign won a top award at the Cannes Lions advertising festival in June.
Erica Kerner, director of Adidas’s Beijing Olympic Games program, said, “This is about rallying the nation.”
Gatorade, which is owned by Pepsico, has a television ad featuring Chinese athletes counting down to the year 2008. It concludes with a group of children, around age 7, at what looks like an Olympic training center, hitting table tennis balls in unison and counting down to 2012 and 2016.
A Volkswagen campaign encourages people to “honk for China”; McDonald’s ads say “I’m Lovin’ It When China Wins”; and Nike, though not an Olympic sponsor, is the official outfitter of more than 20 of China’s teams.
But these advertising ventures are not going unchallenged. The Chinese government is pushing its companies to amplify their ad messages to compete with foreign brands. Many are promoting their home-court advantage.
For example, a print advertising campaign by Anta, one of China’s biggest sportswear companies, shows a crowd of flag-waving youths gesturing like wild revolutionaries in a state of Olympic euphoria. Many of Anta’s television ads include the song lyrics “I love you, China.”
Ads by the dairy producer Yili feature young people and the tag line, “I Make China Strong!”
More than a dozen Chinese companies have paid millions each to become Olympic sponsors, including the computer maker Lenovo (the sole Chinese company among the Games’ “global sponsors”). And some companies are hinting that, like the country’s top athletes, they can go head-to-head with the best in the West.
Marketing experts say one downside to the advertising frenzy is the clutter.
In the sea of ads featuring Chinese athletes pitching products as varied as Cadillacs and traditional Chinese medicine — with endless images of the Olympic stadium — is a simple question: Whose ad was that anyway? In fact, Mr. Liu, the hurdler, is in ads for at least 16 companies, including Nike and Coke.
“The sameness of the ads is the frightening thing,” said Terry Rhoads, managing director at Zou Marketing, a sports consultancy in Shanghai. “You have to wonder about the ad agencies.”
The avalanche of Olympic television advertising is compounded by so-called ambush marketing, in which nonsponsors — often rivals of official sponsors — try to grab some Olympic glory without paying the high sponsorship fees. The proliferation of such ads is not going unchecked; China is scrutinizing the ads of nonsponsors, trying to give prime billboard space to the official sponsors.
Pepsico, for instance, is not an Olympic sponsor, but its Gatorade brand sponsors some Chinese athletes. Nike is also not a sponsor of the Games, but it has created some of the most striking television ads, encouraging Chinese athletes to “Just Do It.”
Further blurring the line between official and unofficial, some competing companies have been allowed as sponsors: three beer makers — Budweiser, Tsingtao and Yanjing — will be Olympic sponsors, authorized not by the IOC but by the Beijing Olympic committee.
With so many companies eager to market to China’s increasingly wealthy consumers, advertising agencies and China’s sports industry — which controls Olympic athletes and shares in their sponsorship dollars — have already captured lots of gold.
“There’s never been an Olympics with such a big home market,” says Dick van Motman, the chief executive of the Chinese division of DDB Worldwide, the advertising agency. For global brands to succeed, he said, that means “reinforcing your image; aligning yourself with the China dream; and aligning yourself with China entering the world stage. That’s the real game.”