China’s muted presence at Cannes advertising festival highlights darker consumption outlook

Tiktok, AI innovation and the Indian market were in the spotlight at the Oscars for ads this year. There was less excitement over the Chinese market
As Beijing looks to boost consumption, it should consider giving online marketing a freer rein

James David Spellman

Published: 10:00pm, 4 Jul 2023

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Spend a few days at the Cannes Lions International Festival of Creativity, the Oscars of the global advertising industry, and you quickly see three trends – the growing power of TikTok, the feverish race to deploy artificial intelligence (AI), and an eagerness about the Indian market.

Above all, you realise China isn’t the presence it should be at Cannes if Beijing hopes to reboot consumption to re-energise a struggling economy burdened by US-China tensions, an ageing population and a property sector debt crisis.

China didn’t use the Lions to announce that it is open for business. Its muted presence contrasted with the beachfront sanctuaries of Google, Meta, Amazon, Dentsu and even newcomer Saudi Research and Media Group. Yes, a Chinese agency did win a Titanium Lion, the country’s first. But the United States overwhelmingly dominated the awards, followed by Brazil and Britain. In the Asia-Pacific, Australia, India, New Zealand and Japan were the top winners.

I detected no real buzz about the China market at the festival, attended by some 15,000 people, unlike the excitement over Latin America, Saudi Arabia or India, or around the topics of AI, diversity and Generation Z, or even about the Foo Fighters concert.

It suggests a darker outlook for China’s consumption this year, amid speculation among local media buyers that ad budgets were contracting. It is hard to imagine how the world’s largest e-commerce market can thrive in the long term without unfettered communications, which marketers leverage to reach out to consumers, especially when spending confidence is flagging.

It also raises the need for Beijing to look beyond the traditional tools used to jump-start consumption – such as interest rates, state subsidies and trade deals – to give online marketing a freer rein, especially in an uneven economic rebound. However, the government’s grip on public discourse remains tight, as seen from the recent blocking of economic and financial writer Wu Xiaobo from Weibo.

Shoppers in a mall in Beijing on June 15. Economists see continuing weakness in China’s consumption recovery. Photo: AFP

The Chinese market seems to be missing out on – or at the very least, seems estranged from – the latest advertising and marketing trends, which promise a reinvention of ways to influence how we think and buy.

Yet Chinese-owned TikTok, which is unavailable in China, has a stand-out offering, having successfully engaged with audiences, especially those tired of the lengthier product pushes on YouTube. The early days of TikTok influencers using fluorescent purple hair and better-than-Beyoncé dance moves to go viral has given way to insights emerging from behavioural economics and new AI tools.

In the ever-growing challenge of attracting interest, personalised interaction is essential, as is syncing advertising in real time to an individual’s mood, desires, habits and intellect. With “physical” interaction the ambition, TikTok has unveiled two tools: “shake” your mobile or “tap” on an image to do a task, such as breaking up a cookie. Completion is rewarded with virtual confetti and possibly a discount code. Meanwhile, data is collected to learn more about what makes you tick.

Many marketing denizens shrugged off fears in the US that China is using TikTok users’ data for pernicious reasons. If TikTok is toppled, they see it as happening not from regulatory threats but from the emergence of another platform that leverages behavioural science. The barriers to entry are remarkably low. A new app can go viral in as little time as it takes for its predecessor to implode.

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The Cannes gathering was also alive with talk of generative AI. The looming threat to jobs aside, AI has become ubiquitous and its abilities are being tapped to generate ad campaigns. For instance, Alibaba has created a virtual influencer called Noah, with customers voting for his character style and interactions with customers set to influence his development.

Despite the new developments, much of advertising’s playbook remains the same. In marketing, one must do three things: Attract attention. Retain it long enough to cause a twitch in one’s thinking. Convert that into action.

To accomplish this, AI can be used to amass and analyse data to orchestrate personalised customer interactions. The potential is staggering, although early efforts show AI-generated content still needs to be fine-tuned to better align with a marketing campaign’s voice and its targeted audience.

As discussions at Cannes vacillated between AI doom and nirvana, global regulation was seen as inevitable and needed, though a common ground for new rules had yet to be staked out by marketers.

There was also an eagerness surrounding India’s market. The world’s most populous country is expected to see economic growth of 6.7 per cent for the next three years, remaining the world’s fastest-growing major economy, according to S&P Global.

12:50

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India’s e-commerce market is expected to nearly double over the next three years to US$150 billion. With more than half the population made up of millennials and Gen Z, India is also one of the world’s largest social media markets. Establishing a stronghold quickly in India is now a top priority for ad agencies in lockstep with their clients, such as Apple, which recently opened its first official retail store in Mumbai.

Despite global lay-offs and cost cuts, at Cannes, there was little concern about a global recession. The gathering showed that many possibilities are up in the air but clients are spending money.

James David Spellman, a graduate of Oxford University, is principal of Strategic Communications LLC, a consulting firm based in Washington, DC

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