What does the merger of an interactive advertising agency mean for customers in China?

Today's advertising industry has entered another acquisition period, not only in China but also around the world. In the United States and Europe have a large number of mergers and acquisitions in progress, many of them for the first time to their tentacles in Europe and Asia.

Many acquisitions are happening around the country, and large groups have been buying small and medium-sized companies in Asia and China. In the last few months, WPP has acquired the influential Blue Interactive and agenda in China. Publicis has acquired Communication Group (CCG) and we expect more acquisitions to take place. (Omnicom, where are you?) ）

With this kind of mergers and acquisitions, the only question that arises in my mind is "how and when will it benefit the client?" "This is a sharp question, but for us this is the core problem."

Did we say the merger?

Can we refer to what is happening as a merger? To get a new client, as a simple outward expansion strategy, a big advertising firm buys another company that is completely different from what is happening in our industry today.

What really happened (do we have to say it again!) Are those companies that acquired a skill to get involved in other areas of the industry, which they did not want to do ten years ago. Don't forget that these major acquisitions have used the same strategy, once again, to compete in emerging industries by acquiring companies and talent.

For me, it's strange how they can quickly create or manage synergies between companies that have nothing in common. Let's take for example an advertising firm that buys a Chinese interactive company that is a major customer of Unilever, and the advertising agency serves the world's Procter and Gamble. What kind of strategy is hidden behind this? Worried about falling behind in the industry? Or is it just a number game? And what benefits can customers get from such acquisitions? Most of the world's major interactive companies, are starting from small independent enterprises, these enterprises not only have a unique vision, but also has the desire to dedicate their full talent to the passionate staff team. And in most cases, customers will choose to work with them for a long time.

Almost 10 years ago, we created the Interactive, and in the next two years there was an upsurge in corporate takeovers, both in size and in form of Internet agents that were either acquired or invested. We have resolutely chosen to exist as an independent company. Now, almost all of those companies have ceased to exist, and even if they do, their scope of business and the types of customers have changed radically. You can certainly interpret this as the bursting of the dotcom bubble, but we firmly believe that it is the wrong way for them to enter the Chinese interactive marketing industry.

Now, it looks like it's going to happen again, so maybe people have to ask, "Don't worry about companies like Nurun China?" "We'll answer clearly and simply," No! "Why?" Two reasons: cultural conflicts as well as cultural shocks.

Cultural conflict

Advertising companies operate in what I call "safe" advertising mode. Of course, part of this is due to customer demand, but the culture of this "safe" advertising program has become a real trick. This kind of "safe" approach does meet the customer's most basic requirements, which may be why they don't include the internet in their programs. Well, no one can blame them for beautiful financial statements and project benefits! What we are seeing now, however, is that these same "safe-mode" advertising companies are acquiring some interactive agents that love adventure and innovation, and that's where the cultural conflict begins.

New "Family" members are "integrated" into traditional advertising companies, often affiliated to the offline (BTL) sector. We have seen the creative director or executive creative director of traditional advertising take over the interactive creative department, and we disagree. In many of today's examples, the activities of the online segment and the executive strategy lead these innovative interactive agents, rather than the traditional "safe-mode" advertising companies. and interactive agents are being asked to grow at a faster rate than previously, and these pressures and demands will only add to the company's instability and lead to a prolonged internal debate. Not only is the pressure of the existing team increasing, but also the project quotation is increasing faster!

In the year after some of these companies were acquired, we often found that not only did the founders or management teams of the company leave, but even the customers turned to other agents. It may be easy to understand, of course, that the founders of the company may want to enjoy the money they have earned right away, or that the client is not actually making any long-term commitment. We see that most of our competitors are experiencing a huge flow of people, either from acquisitions or attempts to integrate the interactive sector into the adjustment of traditional advertising companies. This is the traditional advertising culture trying to impose their "old" mode on the future of the communication mode of the inevitable results. Those strategic leaders remain at the stage of traditional thinking patterns.

Two years ago, we were China Interactive, we have realized the importance of alliance with international companies, and at that time consciously with a pure interactive company--nurun, now as Nurun Chinese we do not lose a customer, we 80% Middle-and senior-level executives have not left, and they are still employed. And since then we've had two major customers and maintained a 50% annual growth rate, which is just a little bit faster than we've ever been before. This means that our customers are barely aware of our seamless integration with Nurun. In fact, we have grown into more strategic agents, from spending our time constantly urging customers to spend their time thinking about new ideas and new strategies. So we sleep more soundly than before! Most of our customer relationships in China have been around for more than four years, and that's what we really deserve to be proud of.

Culture shock

Another important point is that none of these traditional advertising companies or international interaction agents used to collaborate with clients that are similar to what they now encounter in China, and these customers have begun to become more interactive. When they come to China, there will be no safe solution. Let us not forget that China's first search engine is not Google, the first auction site is not bay, the first social network is not Facebook. This requires an entrepreneurial mindset and an open attitude to truly understand all this.

I firmly believe that in order to achieve the success of interactive marketing in China, we must leave behind almost everything that has been heard from Western markets or what is happening there, and you only have one thing to consider: the Internet is becoming the first choice for Chinese media audiences. And in industries such as automobiles and tourism, the Internet is indeed the preferred channel for information for some of China's population (young people).

So why is that so? The way Chinese audiences interact with brands is completely different from the rest of the world. The internet has not only changed their lives, though not most of them, but the internet has also opened up new lifestyles that they had not previously had, and improved their quality of life and made their lives more personal. It's like when they click on the "Open" button on their computer screen, they enter a whole new world-a traditional Chinese society that is completely different from what they have been living in. The new world almost immediately became the focus of their eagerness, and computers and mobile phones became the primary electronic devices for them to connect to the world at once. Only when you understand this will you be able to make full use of the power of interactivity in China's audience.

let's go back to the question we raised earlier: "How will these major mergers and acquisitions benefit customers in China?" "Until these new competitors are fully aware of cultural conflicts and cultural shocks, it will be possible, even if the process of understanding is difficult." One has been focusing on the interests of customers, companies that have been trying to stay ahead of the ever-changing new media and audiences and have been driven by real ideas and project quality suddenly focus solely on financial statements and internal struggles, which would radically change the way the interactive marketing industry works, We believe that this will be very dangerous for both customers and agents. Customers must be pulled back to the center of attention.