Ogilvy Group and Shaghai Advertising renew joint venture
11 September, 2006
The Ogilvy Group China and Shanghai Advertising Ltd. today announced the decision to renew their joint venture partnership for another 15 years. The agreement, set to expire in October 2006, has been extended until October 2021.
The announcement marks one of the few extensions of joint ventures in China’s advertising and marketing industry. In 2005 the China central government allowed 100% foreign ownership of advertising agencies. The Chinese advertising market is the fastest growing in the world. China is now the third-biggest advertising market in the world, after the U.S. and Japan, posting 21% growth in 2005 to nearly 316 billion yuan (US$40 billion). (Source: Nielsen Media Research)
Under the new agreement, Ogilvy will continue to retain a majority interest in the joint venture company.
Established in 1962, Shanghai Advertising is one of the largest advertising agencies in China. A full-service agency, Shanghai Advertising is part of the Shanghai World Expo (Group) Co. With more than 40 years’ experience, Shanghai Advertising possesses in-depth understanding of the local market and consumers, and extensive experience in auto, communications, finance/insurance, medical and FMCG.
“Our 15-year partnership with Shanghai Advertising has proven to be one of the most successful and fruitful in China’s advertising industry. Ogilvy has benefited tremendously, as the joint venture formed the foundation for Ogilvy to become the biggest marketing and advertising group in China,” said TB Song, Chairman of Ogilvy & Mather Greater China.
Mdm. Guo Lijuan, Chairman and GM of Shanghai Advertising, said, “Our long association with Ogilvy has set the standard for joint ventures in the industry. Both companies have prospered during the last 15 years and become leaders in our own space. Renewing our partnership is a real show of commitment from Ogilvy to the China market.”
Miles Young, Chairman of Ogilvy & Mather Asia Pacific, said, “Many people have speculated about the ending of the JV’s in China in this sector as they expired. This new agreement testifies to our belief that, with the right partner, the combination of global and national expertise is the best solution. We look forward to another highly productive 15 years.”
In 1991, Shanghai Advertising and Ogilvy & Mather established Shanghai Ogilvy & Mather Advertising Co., which formed the core of what is now Ogilvy Group in China. Today, the Ogilvy Group is the largest communications group in the country, encompassing advertising, public relations, direct and interactive marketing, and activation, with offices in Beijing, Shanghai, Guangzhou, Fuzhou and Xiamen. Major multinational clients include IBM, Motorola and BP; major Chinese brands include Lenovo, China Mobile, and Great Wall Wine.
Ogilvy Group has also been an industry leader, helping to establish the China 4As Association and regularly publishing books and articles on brandbuilding in China.