Ogilvy Mather Buys Stake In Fuzhou Ad Agency
In a first move into China's second-tier cities, Ogilvy
Mather, a leading international ad agency which is part
of the WPP Group, has purchased a controlling 51% stake
in Fujian Effort, which it renamed Effort Ogilvy.
In 2003, Fujian Effort reported revenues of US$1.8 million.
The company is involved in advertising, brand management,
design, promotions and media.
Ogilvy's China clients include IBM, Motorola and Coca
Cola's Fanta and Sprite. Ogilvy China is part of the WPP
Group, a marketing and advertising group which also
includes J.
Walter Thompson and other leading international ad
agencies. WPP is headed by Sir
Martin Sorrell, who has earned a reputation as a financial
whiz in the advertising industry.
The move to buy control of Fujian Effort means that advertising
clients are now paying more attention to penetration of
China's second tier cities, and are extending beyond the
first tier cities of Beijing, Shanghai and Guangzhou.
Virtually all of the multinational ad agencies entered
China in the late eighties and early nineties using management
staff from Hong Kong and Taiwan, and hiring and training
local staff. Now, more of the local staff who have risen
through the ranks are taking over senior management positions.
In the second tier cities and beyond, small local agencies
wholly staffed by local personnel and management spouted
up to handle local client's needs. Now, the multinationals
are moving into the second tier cities, and successful
local companies want to expand their advertising, marketing
and distribution beyond city and provincial boundaries.
There is a trend in the second-tier cities that most
of these companies which are stretching their wings are
privately-owned corporations, not state-owned corporations.
Because of intense competition in the main markets, most
of the growth in the coming twenty years will come from
the secondary markets in China.
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