In lieu of an abstract, here is a brief excerpt of the content:

  • Multinational Corporations’ Controversial Ad Campaigns in China—Lessons from Nike and Toyota
  • Fengru Li (bio) and Nader H. Shooshtari (bio)

As both the world’s third-largest advertising economy and an emerging market, China promises great potential for multinational corporations. However, the multiethnic Chinese culture, with its unique history and values, as well as its complex ideographic script and independent visual culture, also challenges the ability of the multinationals to communicate accurately, effectively, and without offense. In this article, we discuss Toyota’s 2003 and Nike’s 2004 ad campaigns, both of which were banned by the Chinese government in response to consumer outrage. In essence, we propose that incongruent cultural views of consumers and marketers, a lack of historical sensitivity on the part of the advertisers, and different levels of sociolinguistic ability between the makers and their audience resulted in such a failure.

China is expected to become the second largest consumer market after the U.S within seven to ten years.1 Ad spending in China grew to an estimated US $31 billion in 2005, compared to US $18.9 billion in 2004. In a recent ranking, China tied Germany and the United Kingdom as the world’s third-largest advertising economy, behind the U.S. and Japan.2 Yet, as an emerging market, China has also been caught off guard by the multinational corporations’ bold advertising campaigns. Although the impact of World Trade Organization (WTO) membership on Chinese advertising censorship is limited because GATT’s provisions (Article XX) allow for regulations deemed necessary to protect public morals, the WTO entry has signaled the emergence of a Chinese market more open to competition from multinational corporations. China’s formal entry into the WTO in November 2001 included promises to loosen previous restrictions on advertising. Until that point, it had freely censored any foreign advertising that sought Chinese air time.

In spite of the expected opening of the advertising discourse, four commercials designed by international ad agencies were pulled by Chinese regulatory institutions between December 2003 and May 2005 after tens of thousands of messages protesting the ads were posted on major Chinese Internet sites [Editor’s note: Please view the accompanying Nike and Toyota sidebars, in which these authors have graciously provided a sampling of these consumer protests translated into English].

Nike Sidebar

Toyota Sidebar

Among those banned were Toyota’s print ads for the 2004 model of its SUV and Nike’s December 2004 TV commercial. These ads, the first non-Chinese commercials to be banned by Beijing since China’s entry into the WTO, drew an unexpected volume of protests and responses from the Chinese nationals and local media. Importantly, however, both of these multinationals had previously produced ads for the Chinese market that were not only well received, but were praised, discussed, and replayed, thus becoming, in their own way, “part of the culture.” Both multinationals, therefore, may have been lulled into a sense of complacency (or at least a premature sense of competency) about their mastery of the Chinese culture—and then were caught off guard by negative responses to their commercials.

Toyota’s previous advertising efforts were well received and generally considered both benign and in line with Chinese cultural values and understanding. For example, a Chinese proverb, “che dao shan qian bi yo lu,” meaning “when a vehicle comes to a mountain at the end of the road, there is always another route to get to the destination,” was used by Toyota in its tag-line of an early ad. It said, “Where there is a road, there’s a Toyota.” So popular was the ad that even children could memorize it as a rhyme. Thus, Toyota successfully capitalized on Chinese cultural resources and philosophies in its earlier advertising. Toyota’s aspiration to be the market leader, though a latecomer to the Chinese auto manufacturing market compared to manufacturers such as Honda and Nissan, was respected because of the perceived respect for the Chinese cultural heritage.

Nike’s first approach to advertising in China was cautious. Indeed, in 1997, The Wall Street Journal described Nike’s approach as “tiptoeing” into the world’s largest potential sneaker market.3 As they had...