Note: An earlier version of this story incorrectly identified the company DMG as Digital Media Group. It has been changed to reflect the company's correct name, Dynamic Marketing Group.
Like many people, Dan Mintz takes the time to meet his business associates at the airport; unlike most, he does it in a chauffeured Mercedes S600, escorted by a Shanghai police car. The Benz pulls right to the belly of the 747 inching its way to the gate, and the Staten Islander emerges into the brisk evening air—a bundle of affable, regular-guy energy in black pants, a sweater, and sneakers—and bounds up a stairway specially positioned so that he can intercept his colleague, Chris Fenton, before he gets siphoned off down the jetway and into an interminable customs line. As the pair emerges, joking, from the plane, nine Chinese military police officers stand at solemn attention along the path to the waiting car. Fenton sinks gratefully into the backseat while Mintz, the founder and head of Dynamic Marketing Group, one of China's fastest-rising advertising agencies, dispatches an employee with Fenton's passport to claim his luggage and handle customs. "We don't wait on lines here," Mintz explains with a smile.
It is an impressive red-carpet show by any standard, but as guanxi goes, this particular display has become standard procedure for Mintz. Translated literally, guanxi (pronounced gwan-she) means "relationship building"; in practice, it means carefully cultivated clout, a culturally calibrated measure of respect, influence, and honor. It is a personal as well as political form of capital, and Mintz—who moved here a dozen years ago as a freelance commercial director with no contacts, no advertising experience, and no Mandarin—insists it's the key to navigating the country's booming business world and the corridors of government power that feed into it.
"Basically, China either works for you or against you," he says. "The risks are high, but so is the payoff. Here, now, it is the good old days."
A Roll of the Dice
It certainly looks that way: Billings in the Chinese ad business, which came in at an estimated $10.4 billion last year, are expected to hit $14 billion for 2007, and the country is likely to become the world's second-largest media market by 2014. In fact, China will be the world's second-largest economy by 2020, built around a middle class set to grow from 110 million people today to more than 150 million; GDP should quadruple by that year, to $4 trillion. What's more, explains Normandy Madden, editor of AdAgeChina.com, "China's ad industry is now really opening up to independent shops because foreigners no longer need a local partner to get a license to operate."
But these good old days were a long time coming. When Mintz arrived in Beijing back in 1990 to scout locations for a TV commercial, there was no gleaming Blade Runner-esque skyline. The city was low-slung and dingy; infrastructure was grim; you couldn't even rent a car. That all-consuming Chinese middle class was a faint and distant hope. And the recent unpleasantness at Tiananmen Square meant that the only military escort offered to a white guy with a camera was the kind that ended in a cold, dank cell.
Still, Mintz, who's now 41, couldn't get enough of the place. For a few years, he shuttled between New York and Beijing, feeling his way. But China simply wasn't "the kind of place you could freelance in," he realized, so in 1993 he made the move for real. With a few thousand dollars and help from a local producer who eventually became his partner in DMG, Mintz set up shop in a Beijing apartment complex reserved for Westerners.
At a time when American businesses were scarce in China, Mintz's move was a bold one. (Asked how he screwed up the courage, he confesses with a chuckle, "I'm friggin' nuts!") But with few locals able to compete with his American-made production skills, he was soon creating spots for Budweiser, Unilever, Sony, Nabisco, Audi, and Kraft, plus scores of Chinese brands. Before long, his crew had moved into a two-story loft-style office and production studio (their new 30,000-square-foot digs in Beijing occupy the top two floors and roof deck of a modern high-rise) and expanded DMG's presence in Shanghai, the country's business hub (where its offices feature a three-story-high entryway, two-story waterfall, sunken fish tank, exterior deck with a pond and bridge, and Mintz's red Porsche 911 Turbo parked on the sidewalk).
DMG's breakout moment, however, came when it won a full-scale Volkswagen brand campaign in 2004, the same year China became the German automaker's second-largest market. Initially, Mintz wasn't even supposed to make a pitch for the job—the VW brass gave him a shot as polite acknowledgment of the work DMG had done on their TV spots—but when he did, his years of immersion paid off. Instead of mechanically translating Volkswagen's then-slogan ("For the love of automobiles") into Chinese, Mintz's campaign tapped into ideas indigenous to the country. He based it on the traditional Chinese character for "heart," which is also found at the center of the traditional characters for words such as "loyalty," "wisdom," "ambition"—a host of virtues Mintz wanted to associate with various VW models. To create a suitably stirring soundtrack for the ads, Fenton, from his home base in Los Angeles, had secured the rights to "I Will Come to You," a Hanson ballad that goes straight for tear ducts (and eventually became a huge hit and a staple at Chinese weddings).
When Mintz arrived in Beijing to scout locations for a TV commercial, there was no gleaming Blade Runner-esque skyline.The city was low-slung and dingy; infrastructure was grim; you couldn't even rent a car. And that all-consuming Chinese middle class was a faint and distant hope.
Volkswagen was bowled over. But there was a hitch: As part of the Cultural Revolution, Chairman Mao had done away with traditional Chinese characters in favor of simplified versions; meanwhile, Taiwan, its perpetual enemy, had kept the ancient ideograms. To publish something with traditional characters in China has, for years, been deemed an act of treason.
As Mintz puts it, "They shoot you for s—t like that out here." But the simplified characters do not feature the "heart" character in the middle.
It was one of those moments where a business either takes a great leap forward or falls to its knees. An old China hand by now, however, Mintz was ready—and he wasn't alone. Back in his early directing days in Beijing, he'd befriended Bing Wu, a young producer on the small commercial film and video scene, and Peter Xiao, a finance whiz. Now partners in Mintz's company, both bring significant leverage to the table. In Bing's case, having grown up in China's elite Olympic sports program (literally—she was removed from her family as a small child to train) translated into both prestige and access for the former national gymnastics champion. Much of her time now is devoted to overseeing DMG's work on the 2008 Olympics in Beijing.
"Peter," on the other hand, "is basically government and military," Mintz says. "He plays at the highest level of relationships." So when, for example, the American athletic marketing giant IMG tapped DMG to bring the World's Strongest Man Competition to China, it was Xiao who negotiated with the leadership of various Chinese cities to secure the best deal for the event. (It ended up in Chengdu and was broadcast to 40 million viewers.) "He's a financial guy," Mintz continues. "He deals with money, he deals with banks, and things like that, but his family is military. And not," he adds pointedly, "staff sergeants."
Having won over VW with his "heart" idea, Mintz now had to win over the Chinese, and he, Bing, and Xiao soon found themselves in the Great Hall of the People in Beijing, lobbying the Politburo; the Ministry of Radio, Film, and Television; the Ministry of Propaganda, and numerous other officials. Their appeal turned on a technicality: The old characters should be thought of not as characters, they suggested, but as "pieces of art." Amazingly, it worked. The campaign went forward and VW and DMG's relationship was cemented.
"Why would you think people in government here all think the same when there's nowhere else in the world where that's the case?" Mintz asks. "It's like thinking every Chinese guy knows kung fu."
Even Mintz acknowledges that he didn't triumph that day on the strength of his presentation. "I believe in meetings being mostly formalities," he explains. "You don't walk in with these people cold." In other words, he took great care to know how his petition would be received before he even entered the Great Hall. Most Westerners, he says, "come in with these preconceptions that everyone in China gets along and whitey is the enemy. But why would you think people in government here all think the same when there's nowhere else in the world where that's the case? It's like thinking every Chinese guy knows kung fu."
Mintz's coup was to find a way to serve everyone's discrete interests—or at least seem to. "And that's not a small accomplishment," he stresses. "This isn't a little town up in the middle of nowhere. This is a national campaign that's shown on government-run TV. The highest level of credibility you can achieve in advertising in China is to pull off something big in television because, with the greatest amount of eyes and regulation, it's the most sensitive medium." (Just ask Nike and LeBron James, who saw a multimillion-dollar campaign yanked by the government after the hoops star crushed a number of culturally revered Chinese figures in a kung fu-themed TV spot. Nike eventually released a formal apology.)
"The government is perceived to be business friendly," says Hong Liang, chief China economist for Goldman Sachs. But the "rules and regulations can be a nightmare" and implementation "quite discretionary." This is in no small part, she points out, because the government is not simply a market regulator but a player in it as well. Knowing what each individual is playing for, then, becomes a key strategic asset.
Riding the Dragon
Toward the end of Fenton's trip, he has come north to Beijing before returning home to L.A., where he's not only DMG's general manager for North America but also has his own Hollywood management company. (Fenton was Mintz's agent at William Morris back in the early days.) Xiao and Bing have helped to arrange a farewell dinner, hosted by a general who heads China's weapons and space program. Mintz is, appropriately enough, piloting a black VW Touareg along the Avenue of Heavenly Peace (his driving philosophy in China: "You gotta look the other way and play chicken, man") and past the Great Hall of the People.
"Location, location, location," he says, downshifting near a row of traditional single-story buildings outside the Forbidden City. It is here, on the perimeter of the imperial compound, "where all the decisions for China are made, hands down." Mintz draws an analogy to the Yangtze River, which trickles down from a single point in the Dangla mountains. "China is controlled from just a few rooms," he says. "It's completely planned."
The general's dinner takes place in his office/residence on the moat surrounding the Forbidden City. A model-beautiful young woman serenades guests with a traditional zither; museum-quality antiques and furnishings fill every room, most of which look onto the ancient walls. Cordial and unassuming in a dark business suit, the general gives a casual tour of his office, pointing out a candid photo of himself with a smiling Henry Kissinger. Dinner is one lavish dish after another, served in the center of the table; there's fresh crab, flown in earlier that day at the general's request. Mintz translates as the general proudly relays that his son attended Oxford: "Bill Clinton," the general adds, encouragingly, confident that even an American guest will recognize at least one Rhodes Scholar.
Perhaps the key to Mintz's success is that he didn't import an American business so much as grow a Chinese one. Nearly every employee in DMG's offices is mainland Chinese; the culture and creative approach are also distinctly local. Even Mintz himself, unmistakably a New Yorker in so many respects, seems to have undergone a transformation over the years: Kenneth Hartmann, a German executive formerly with FAW-Volkswagen and now working for the North American division, relays that a Chinese colleague admiringly called Mintz "one of the most Chinese Americans he had ever met."
"The whole Chinese system works on the fact that you're here for the long term," Mintz insists. "China has become a modern country, but we're still talking about 5,000 years of history. It's not like they go around quoting Confucius every five minutes, but the Chinese inherently think in terms of building a strong power base for the future, because if you crumble under the pressure of China, they will have helped you for nothing. So they've got to know two things: 1) that you understand how to build relationships in China, because it's done very differently than back home, and 2) that you have the juice, the strength, the contacts, and the understanding to be able to withstand the test of time."
In a telling sign of China's commercial evolution, Mintz then adds that even guanxi is no longer sufficient in an economy this competitive and complex. "The true combination for success in China is guanxi and what they call shi li," he says. "Shi li is the ability to actually do good work. And that's the difference between now and the old China. Back in the day, it was all about guanxi, and they didn't care about anything as long as you had the connections. Well, China is not like that anymore. You need to have both."
Judging by the way Mintz's little company has grown, he does, in fact, have both. As a private company dealing in many capacities with the Chinese government, DMG is rather touchy about disclosing profits, but Mintz himself puts its annual revenue growth at 50%-plus since 2001. The company is now handling VW's Olympic sponsorship (estimated cost: $200 million) as well as that of China Mobile, the country's leading wireless company. It's even doing work for the Beijing Olympic Committee itself. And over the course of 2005, DMG won new accounts with the likes of Johnson & Johnson, Audi, and Nike. (In getting the Nike account, DMG even took a chunk of business from none other than Wieden+Kennedy, Phil Knight's longtime ad stalwart.) Total DMG billings for 2005 probably reached or exceeded $100 million, says Mintz, and look set to rise significantly in 2006.
Now the brand Mintz most wants to build is his own. In addition to creating DMG, he somehow found time over the years to direct two low-budget feature films: Cookers, a supernatural thriller about crystal-meth dealers, which nabbed Best Film and Best Director at the 2002 Milan Film Festival, and another thriller called American Crime, starring Annabella Sciorra and Rachael Leigh Cook. Neither would probably have happened via the traditional script-shopping route; instead, Mintz lined up a Chinese backer, which intrigued the Hollywood suits who are hungrily eyeing a country with more teenagers than America has people. Through Fenton, Miramax and Fox have both hired Mintz to consult on production challenges in China. Even Variety chief Peter Bart has visited DMG in Shanghai.
"Let's put it this way," says a top CAA agent, "the Chinese market is driven by relationships, and the relationships that Dan and his firm don't have are probably the only ones you don't need."
After the general's dinner, Fenton and Mintz are standing just outside the Forbidden City when a police car pulls up and drives them into the massive inner courtyard framing the fabled Jin Shui Qiao, or Golden River Bridges. This is a special accommodation Mintz has arranged only once before, and as the cops patiently stand by, the pair steps out for a brief walking tour, with Mintz explaining the significance of various ornate monuments looming against the clear night sky. The buildings' scale alone is breathtaking, and Mintz reveals himself as a reverent if self-taught student of the history around him.
"This," he whispers, "is as close as anyone can get to feeling what it was like to be the emperor."
Jamie Bryan is a freelance writer living in New York. His work has appeared in Details, Premiere, and on MTV.
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