Optimistic caution: McCann’s APAC and global leaders discuss growth

In its most recent World Economic Outlook (WEO), the International Monetary Fund (IMF) projects global growth in 2014 to reach 3.7 per cent, expanding to 3.9 per cent in 2015. That’s up from 2013’s sleepier 3 per cent performance. Numbers like that are encouraging after the global financial crisis. But what’s more encouraging is to see it in action rather than just as figures on paper.

“Our clients are optimistic,” said Harris Diamond after his latest Asia visit. “Maybe last year they were cautiously optimistic; this year it’s the other way around—the optimism comes first.”

The chairman and chief executive officer of McCann Worldgroup reports companies he met with in China and the rest of the APAC region seem prepared to boost adspend, which is a solid indicator for the broader business picture. Mass-market goods are highly reactive to economic conditions, if these brands are ready to open their wallets a bit wider, that means they anticipate more consumer spending.

In an exclusive interview with Campaign Asia-Pacific Harris, along with the president of McCann Asia-Pacific, Charles Cadell, said he anticipates as much as 20 per cent growth from the agency’s existing client base in China. That includes activity from names like GM and L'Oréal as well as local Chinese brands.

Within that, they said digital was the fastest growing piece, likely to triple this year in terms of work volume.

Activation too would be a major source of new campaigns, especially in China’s lower-tier cities. The two leaders agreed that China is clearly ahead of the rest of the world when it comes to integrating digital and activation projects. There is less friction and more support to move people from a sampling interaction to an e-commerce buy.

“Younger consumers are more willing to receive location-based advertising," said Harris. "We can send a coupon or a reason to stop by a business. But how do you find the people who are willing?” That’s still a challenge for every one in the industry. Harris and Cadell referenced the agency’s “Truth Central” study on privacy, which found the average global consumer is more worried about protecting private data than about terrorism or climate change.

“Sharing of information is just growing and growing exponentially,” Harris said as the topic shifted from consumer privacy to some of the technology involved. While unwilling to speak directly about the recent deal between Facebook and WhatsApp or the Line brand his company represents, he did say “it’s clear these [messaging apps] are all going to become part of the communication spectrum. But if they can become part of the marketing spectrum remains to be seen. Every time a new channel is created, that’s a good thing. We want to find the best ways to reach people.” And the more specific a channel can be, as far as the data users are willing to share, “the better the opportunity.”

Across Asia, the pair sees much greater opportunity overall today, pointing out that the region is a growth market for their agency’s multinational clients. “They all have confidence right now,” Harris said before leading into a conversation about the proper balance of global versus local clients that any agency office should have.

Our goal,” explained Cadell “is to be 70 per cent local and 30 per cent global. In the Philippines we have 26 per cent of the market” (in terms of total country marketing spend). He attributes that success, at least in part, to the office’s ideal client balance. “And we’d like to replicate that in China.”

“To have a sense of a market you really need to feel its flavour,” Harris explained further. When an agency clearly has a grasp on a national culture, it's much better suited help a global brand fit the local marketplace.  McCann’s leadership believes a 70/30 balance is the ideal that lets a creative team work with local perspective while still speaking the language of bigger international brands.

For 2014 Harris and Cadell said they see both local and global budgets ready to expand. “From a client perspective,” Harris said, “we’re seeing a world that’s waking up again.”