Raymond So (蘇雄) is chairman. Greater China region, for J. Walter Thompson, one of the world’s leading advertising firms. So established the firm’s Taiwan office in 1988, and its Mainland China operation in 1986. In September, the Free China Review spoke with him about the development and competitiveness of Taiwan’s advertising industry. Excerpts follow.
FCR: What is your assessment of the local industry?
Raymond So: Over the past eight years, Taiwan has developed a very high quality advertising industry. Ad production is especially good. Taiwan has also developed a unique, culturally relevant style of advertising that reflects the culture of the market. Some companies even produce commercials in Taiwan for use in Hong Kong and Mainland China. Many Taiwan agencies are producing world class work.
What was it like when foreign agencies first entered the market?
We didn’t have the resources to chase every piece of business in the market. First, we had to set up the foundations of our business and train our people. And as a multinational agency, we had a much more difficult time in meeting our needs and standards in terms of equipment and talent. There was an extreme shortage of quality production houses, and bilingual, skilled, professional staff. Given the growth of the market and the industry, there just weren’t enough professionals to go around.
What was the catalyst behind the market’s rapid growth?
It wasn’t solely the result of liberalization. The entrance of multinational ad firms into the Taiwan market coincided with several other factors. First, in the late 1980s, Taiwan’s economy took off. As a result, people could afford many more foreign goods and services. Because of consumer demand, there was a large influx of foreign brands. Multinational agencies came in on this tide.
The lifting of martial law was also significant. Under martial law, print and electronic media were tightly restricted, and there wasn’t enough ad space to meet demand. Some newspapers had split runs. They would run four sets of the same edition, each with the same layout and content, but with different ads. Even so, it was difficult to get space. You were doing well if you could just get your client’s ad placed. Local agencies didn’t have media research departments, only media buyers who used their connections to place ads. So agencies didn’t play a role as marketing or media consultants.
Then martial law was lifted in July 1987. Suddenly there were dozens of new newspapers, magazines, radio and cable TV stations, and a surplus of ad space. There was a need for media research, a need to plan and target various media to reach different segments of the consumer market. Advertising went from being a seller’s market to a buyer’s market very rapidly. Relationships became less important for media buying, and many agencies began to shift from a more Japanese structure to a more Western structure that emphasized targeted consumer and media research.
What about the local industry’s own identity?
It’s deceiving to try and draw too clear a distinction between foreign and local companies, because when a foreign company sets up in Taiwan, it becomes a local company. Most of your staff, including senior executives, will be Taiwanese. To a large extent, you have to work in a Taiwanese way. You have to understand consumers here before you can do anything, and you can’t entirely disregard local practices. To some extent you have to cultivate closer relationships with your clients than you might in other markets. So in addition to the internationalization of local ad agencies, you also have the Taiwanization of foreign ad agencies in this market.
Where is the greatest opportunity for Taiwan agencies overseas?
Taiwan is definitely going to influence the development of the advertising industry in Mainland China over the coming years. As Taiwan products make more inroads to the mainland market, local agencies here have a lot of opportunity there. Many ad agencies have been set up by mainland businesspeople, but they aren’t very sophisticated. They’re learning how to work more professionally from Western agencies, but in terms of advertising itself, people on the mainland have a much better feeling toward Taiwanese advertising, partly because there is a stronger cultural bond. Many local agencies want to set up joint ventures or strategic alliances with mainland agencies, but right now it’s very difficult to register a joint-venture agency in Mainland China, especially for Taiwan companies. It’s also very expensive. Nonetheless, Taiwan agencies are, and should be, looking at opportunities on the mainland.