A very good piece by David Blecken at Campaign, providing us with a wrap of 2010 and the challenges of 2011 from some of the most influential people in our industry in Asia.
Executive director
Synovate
2010 was a very hard year for many agencies. The end of the recession didn’t necessarily imply recovery. It was a year of reset in terms of client expectations. Agencies had to yield to price pressure, and there was a continuation of the wrenching of 2009. What propelled change was the search for more effective ways to get the message out. The growth of online is also continuing to put pressure on agencies, internet dollars often turn to dimes, and this is a risk for the industry. Unless it finds more creative ways of adding value it won’t be able to drive enough cash flow to attract top talent.
It will probably become clearer than ever that there is even less middle ground for medium-sized agencies. The middle ground has shrunk dramatically. Big agencies can wheel in global experts, and boutiques can continue to provide niche services. There’s still a role for small digital agencies with great ideas.
Paul Heath
President, CEO
Ogilvy & Mather Asia-Pacific
Overall, 2010 was a year of resurgence, a real opportunity to have a relevant discussion with clients, to join the dots and to link creativity and effectiveness.
I expect this year to be a tipping point for digital. People will stop talking about it as something separate from the ‘mainstream’ and it will start to become pervasive and at the centre of everything we do. This won’t be everywhere in Asia, but tier one and two cities in China may already be at that tipping point.
The growth of digital is of course great news and the level of complexity represents an opportunity for agencies to help clients navigate it. Clients are likely to put more emphasis on ROI and we may start to see elements of payment by results introduced to agency compensation models, as well as the growth of consulting services inside agencies. There are also advances in the area of neuroscience – clients are beginning to show genuine interest in this area. 2011 won’t be without pain, but the potential gain will make it all worthwhile.
Nirvik Singh
Chairman, CEO
Grey Group Asia-Pacific
Until now, talk has centred on India and China, but in 2010 four new markets featured prominently - Indonesia, Bangladesh, Vietnam and the Philippines - going into 2011 I expect these markets to continue doing really well.
The trend of more fragmented media will be heightened going forward, and we need to continue to move from being advertising agencies to communications companies. Clients are demonstrating this with more spend in areas like retail. In 2011 I also expect to see the emergence of more activity on the mobile front. Marketers will find ways and means of taking that forward, as well as retail and the below-the-line space of consumer engagement.
As an agency, if you are siloed in your approach it won’t work. We went from a bundled to undbundled offering, but now agencies are starting to bundle their services again. Integration is driving the future. The agencies that are successful in getting out of silos will be the agencies of the future. I strongly believe that will be the model going forward.
Keith Smith
President international
TBWA
2009 was a very tough year for the industry as a whole but last year we all got the feeling that things are starting to bounce back. At TBWA, our way of coping with the recession is to have digital at the heart of our agencies. We spent a lot of time in 2010 hiring the best digital talent and digital creative talent we could. We see this as the right way to move forward.
In 2011, the digital emphasis will continue, but will be more part of a broad scale communications plan that includes other aspects. A key part will be retail activation, which is growing at a phenomenal pace. We think the linkage of digital with retail activation and strong brand support is the way forward for the industry.
2011 is going to be a year of measured growth. Clients are not going crazy in terms of increasing spend, but this will potentially be a really healthy growth phase, with proper, measured development.
John Zeigler
Chairman, CEO
DDB Asia-Pacific
In 2010 we became more collaborative as opposed to the old way of following a process and delivering. It’s more relevant to the digital age, and we feel that we’re on the cusp of a new era. We’ve migrated from a pure digital focus to the integration of digital with a mainstream focus, which will very much be in play this year.
In 2011, we will see agencies more aggressively challenge their talent to jump the chasm of the old to the new world and begin to filter out those who cannot get it. This will create opportunities for new creative leaders. I believe we will also see clients accelerate their hunger and need for results changing the way they allocate their spend to achieve this. This will lead to a greater allocation to the creative idea instead of media placement. In essence, a move from paid media to earned media.
Outside of the communications business we will definitely see the rise of the marketing executive in the business arena. This will make the communications business a more critical asset to demonstrate delivery and, if all works, could help marketing regain its prominence in the game to gain and grow business and brand performance.
Last but by no means least. I feel we will see increased importance of Asia as a fuel for multinational brand growth. This is already happening. With continued financial issues in USA and Europe, the focus on Asia will continue to rise.
Cheuk Chiang
CEO, Asia-Pacific
PHD
Media, communications, entertainment, and related industries are experiencing rapid change. Change like we’ve never seen before driven by revolutions in technology and consumer’s almost insatiable desire for content and social connection, for example, just five years ago iPads didn’t exist let alone Facebook apps.
The traditional boundaries of the media and entertainment industry have also become meaningless. Today almost every business and social activity is a form of media. An increasing proportion of our social interactions happen across media channels.
This translates to huge challenges for both clients and agencies as content proliferates, media gets more fragmented, consumers change behaviors and reaching and engaging audiences gets more and more difficult.
In this environment, collaboration is the key. Clients and agencies need to form stronger partnerships, encourage transparency and work closely to develop unique and compelling strategies that engage consumers.
Vishnu Mohan
CEO, Asia-Pacific
MPG
2010 was a year of great growth. All agencies capitalised on increased activity from marketers who put 2009 behind them and saw 2010 as an opportunity to get back on track and build their brands. It was a great year for the extended space of digital and sports and entertainment marketing. In 2009 we saw companies pulling out of sponsorships, but these came back and companies once again looked on them as an important part of the marketing plan. We also saw a lot more social media than previously.
I think the model of engagement with agencies is moving to one where agencies will be required to prove their value through linking their efforts to an actual deliverable. Buying and tactical planning will keep getting squeezed as companies continue to seek higher order services. Two other changes I anticipate are increasingly more senior level involvement [from clients] on the media front than before. You will also see more specialised people at the clients’ end, such as social media evangelists.
A challenge will always be getting the appropriate people who understand the business. The talent that exists is flocking more to marketers and even media companies than agencies. The perceived glamour pushes talent in that direction. But if you want to engage with an advertiser you have to have the talent who understands their business.
Additionally, the term ‘social capital’ is going to be important in this decade. Every company is going to have to look at building sustainability across all aspects if it wants to be successful. Consumers are increasingly smarter and more sophisticated and they will continue to find companies either praiseworthy or guilty depending on their actions. This is going to be a big thing and is not just limited to a handful of people - it’s imperative from the CEO to the bottom of the company.
Matthew Godfrey
President
Y&R Asia
2010 was a bounceback year in Asia, and we’re seeing more pressure for our clients that growth has to come from this region, and so they need to find a way to capture the market to drive that growth. So the responsibility falls to agencies to lead marketing thinking from Asia more than ever before. Two of the top three ad markets in the world are now in Asia. If you’re CEO of China, your next ambition should be global, but I’m not sure we’ve made that switch yet.
A focus will be empowering people with the tools to help them innovate, but this is different from a process. If you build marketing innovation you can really bring growth to sit and have a proper boardroom conversation. Look at the Old Spice campaign - marketing innovation took it from a funny ad to a worldwide success. Our job is about positioning. There are a lot of case studies but if you just try to replicate them the resulting campaign will not be as successful. It’s not just the content, but the innovation we take to market that’s important.
A lot of people have said that we need to bring the fun back into the business, but I only half agree. What I think we need is to bring innovation back into the business - not to bring the parties back. The old school definition of fun is not really what we’re here to do.
Jarek Ziebinski
President
Leo Burnett, Arc Asia-Pacific
I will list a couple of things here that I anticipate for the year ahead but God may laugh at me for attempting to foretell the future. The truth is, no one really knows what is going to happen tomorrow. More uncertainties exist in the business environment now than ever.
The magnitude of the impact from the global financial crisis goes deeper than what we can see now and cannot be underestimated. It has changed the mindset of an entire generation of consumers who experienced it and or grew up in these times and will continue to impact behaviour in the years ahead. This applies similarly to corporations and clients in how they do businesses. Ever increasing accountability is demanded of corporations and of agencies going forward.
Without a doubt, digital and technology advancements will continue to shape the way we live our lives, impact the way brands communicate with people and inevitably our businesses. As challenging as it is becoming, there is also an abundance of opportunities to take our business forward. However, instead of trying to predict the next digital trend and to invent more jargon, the key is to bring the focus back to people and their behaviour. Whether it is trying to understand how digital technologies are shaping their lives, or how they are consuming it, we must never lose sight of the most important thing: what matters to people.
Malcolm Hanlon
Managing partner
ZenithOptimedia, Asia-Pacific
A big challenge in 2010 was the explosion of complexity in the communications world -digital, social, search, more metrics - a time when ad budgets started to improve but there was a massive increase in workload. There’s still something of a disconnect with clients wanting more work for similar fees as before.
A change is that clients are now drafting in media experts to run their Facebook pages. Rather than lots of generalists at media agencies, clients are expecting more specialists: people who are really experienced in certain areas. It’s impossible to be an expert in everything from performance marketing to analytics to digital TV. The future is in more specialists being brought in based on client needs. These teams will get bigger and the teams of generalists will get smaller.
The other thing is that it’s a tech war out there these days, especially in Asia. There are massive amounts of inventory and technological advance is the key driver. The most technologically advanced companies become leaders; for agencies, the ones with the best systems and technology will be the leaders of the future. We need to become as sophisticated as other industries with these technology platforms.
Jeffrey Seah
CEO, Southeast Asia
Starcom MediaVest Group
Last year was a year to get back on track, with a bit more rationale and forward planning. All the pitching in 2009 was a knee-jerk reaction, and people were calling pitches for different reasons than we were used t- cost, wanting to do things more simply, etc. There was no consistent aim in them, apart from being driven by cost.
More and more, we’re getting our people to have a deeper understanding of client needs, importantly partnership in real partnership form – either marriage or divorce. More and more needs are non-classical. The balance between content and control will rear its head this year, but the most important thing is working together as partners.
The companies with the most adaptable talent are the ones that will capture the available opportunities. This relates to Darwinian business theory. Something to consider is: what is the definition of a product? Every agency has been moving towards a servicing mode rather than developing products, which they really should be doing. Some define a product as servicing in itself - as long as clients are happy, that’s the product - but really that is only half of it.
Barry Cupples
CEO
OMG
The media business is ever changing. With the advent of new social platforms, it is also our job to evolve. We do that by ensuring open architecture communication across our communities and sharing the information on fluid change regards how what consumers want and how they want to receive/interact with messaging, so that our clients can benefit from this knowledge. For instance, mobile apps are constantly changing the way that many consume/ get involved with media. In our shifting communications landscape understanding this fluidity and constantly changing value equation is crucial for our team members if we are to service our clients as experts. It is NOT easy!
Content and technology will continue their growing symbiosis and these elements and the understanding of how best to utilise them have always been key to our business, as the industry always says, “Content is king”. The context to how it is optimised is now queen. Paid, owned and earned media will continue to be the pillars on which the agencies development will measure itself as the currencies at work in each will begin to change and the challenge will be to harness the power of success metrics that may make some measurements obsolete. The challenge is an exciting one and one that makes the industry a great place to be working.
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