Agency Report Card: Media agencies in 2010

Agency heads have described 2010 as “bounceback year” as Western MNCs looked to cut at home and spend in Asia. And while the end of the recession did not necessarily imply recovery for all, most will be able to look back with a sense of relief, if not satisfaction. 

Indeed, this year’s Agency Report Card shows that the majority of agencies maintained their performance on 2009 - although there were exceptions. On the media side, PHD continued to fulfil its promise, and even MPG started to show its potential.

Score key 
10=Unparalleled; 9=Outstanding; 8=Excellent; 7=Good; 6=Satisfactory; 5=Adequate; 4=Below average; 3=Poor; 2=A year to forget; 1=Survival in question

Carat
Initiative
Maxus
MEC
MediaCom
Mindshare
MPG
OMD
PHD
Starcom
UM
ZenithOptimedia

Carat

Regional head Nick Waters
Score this year 8
Score last year 8 

In its first full year under Nick Waters, Carat continued its strong new business push in 2010 and by the end of November was ranked second in the New Business League with billings worth US$450 million. Just as in 2009, China, run by MD Seth Grossman, who ranks among the agency’s key talent, contributed a big chunk of those new accounts with China Telecom one of the biggest domestic wins of the year, as well as the consolidated Kraft-Cadbury account. But the Aegis group agency also showed its strength outside China, picking up Asia Brewery in the Philippines, BMW Group and YTL in Malaysia and Air Asia in Korea, India and Taiwan. Carat’s growing reputation was secured at the end of the year with emphatic regional business wins for Tiffany and Pernod Ricard.

Other significant developments of Carat’s year were two crucial strategic investments. In January 2010, Aegis formed a joint venture with Charm Communications, the largest buyer of CCTV airtime in China and later in the year, Aegis boosted its standing in Australia with the US$300 million purchase of the country’s largest media buyer Mitchell Communication Group. But the agency still has work to do to improve its brand profile. According to the Agency Image Survey, Carat still ranks way behind some of its rivals in the region in terms of awareness and best agency. Carat scores well with marketers  for its versatility, but does less well for value for money and overall level of execution. For 2011, Carat would do well to increase its scope in Southeast Asia and India if it is to emerge as a truly regional network.

Initiative

Regional head NA
Score this year 2
Score last year 2

The biggest change at MediaCom in 2010 was the departure of Kevin Clarke and the appointment of former start-up CEO Alex Crowther as his replacement. To some extent a challenger in Asia, while more of a dominant force in Australia, the agency’s most significant wins in 2010 were AB-Inbev, Swatch and Gap in China, and NSW Government, Yum!, Pac Brands and IAG in Australia. It was in the latter market Mediacom made the brave transformation from focusing less on buying and more on strategy.

Wins aside, with new business worth over US$400 million, MediaCom’s 2010 performance is best described as solid, having managed to retain their top 50 clients in the region, as well as significantly growing their diversified services.  Digital hit $250 million in gross billings, with revenue from search and services up by 50 per cent, and insights and business science units revenues around five times higher than 2009. 

Another highpoint was the phenomenal success of China’s Got Talent TV show with P&G’s estimated $3.37 million sponsorship handled by the agency’s head of content Asia, Preeti Kumar. Many were surprised to hear that Kumar will move to Mindshare, with Anshuman Purohit assuming her duties as MD Singapore. Kumar’s replacement as head of content has yet to be announced. Nihar Das, meanwhile, appears to be something of an unsung hero within Mediacom. Having added P&G ASEAN’s search marketing to their already substantial P&G business in the region, this would appear to further strengthen Das’ position as regional managing partner, Asia-Pacific. 

Mindshare

Regional head Ashutosh Srivastava
Score this year 8
Score last year 8

In a self-confessed “year of great change”, Mindshare Asia-Pacific stayed below the radar in 2010 particularly in comparison to previous years. The huge  loss of Unilever in Greater China was tempered by the retention of the FMCG behemoth’s business in the rest of the region. The agency also consolidated its position in the L’Oréal Greater China business, from 40 to 100 per cent, taking the remainder of the account from incumbent ZenithOptimedia.

Other key wins included the consolidation of Kraft/Cadbury in Southeast Asia, Air Asia and Bayer, none of which are top 10 earners. Staff-wise, departures included client leadership partner Lisa Wei, and VP Siewping Lim’s defection to OMD China. How Mindshare decides to hire in the China market off the back of the L’Oréal expansion and the departure of Lim, will be crucial for 2011. Senior hires included Nick Seckold head of digital, Melvyn Goh president China and James Greet CEO Australia. Linda Lin and Asmita Dubey were promoted to MD level in Shanghai and Beijing respectively. 

The agency’s digital business has grown to 16 per cent, and it has witnessed 18 per cent organic growth by increasing its value added services. According to RECMA figures for 2009, Mindshare led China billings with business worth US$2.5 billion, but it will be interesting to see whether the L’Oréal win will be enough to plug the Unilever gap. One constant is reputation among marketers. The agency still inspires more confidence than ZenithOptimedia according to the Agency Image Survey, but lags Starcom in terms of awareness.

MPG

Regional head Vishnu Mohan
Score this year 3
Score last year 2

Despite being the youngest of the international networks, MPG is making considerable inroads, winning a number of big accounts. The biggest wins for 2010 include Singapore’s Resorts World Sentosa, Puig, Kia, China Cigna and CMC in China, plus Maxx Mobiles and M3M in India. Showing its growing status in the region, MPG was invited to a number of major business pitches, making it onto shortlists for big accounts like SingTel and Asia-Pacific Breweries. MPG also took a stand against one of its biggest clients in India, when it pulled out of the Reckitt Benckiser pitch in protest against the client’s pitch fees.

The potential for growth is vast, with 32 per cent growth in 2009, and similar expected for 2010. China billings have grown 300 per cent with 60 per cent growth expected in 2011. Singapore grew 40 per cent, and Indonesia 20 per cent, anticipating 30 per cent in 2011. Digital is another area in which MPG is expanding, with a near doubling of the digital business. Media Contacts continues to go from strength to strength, anticipating a quadrupling of operations in Malaysia under new director Dinesh Sandhu. Among other initiatives is large-scale study Brand Sustainable Futures, geographical expansion into Sri Lanka and Vietnam, the development of proprietary tools and thought leadership in digital, and an increased focus on marketing and communications. While MPG is showing progress in terms of business, the perceptions of marketers in the Agency Image Survey suggest it still has a long way to go before it can stand up against its more established rivals. MPG ranked at the very bottom of the agency pile. 

OMD

Regional head Barry Cupples
Score this year 9
Score last year 9

OMD built on its new business run at the end of 2009 with a fresh series of wins in the region. The good news started early, with the agency retaining the PepsiCo Foods business in China in February. As the year moved on, the agency picked up media, buying and planning duties for AXA across eight markets, while in India it added Reliance Communications, Renault Nissan and Puma to its growing client roster. All in, the agency reportedly picked up a total of 126 new clients in the region.

Despite this success, what cannot be ignored going into 2011 is that the agency still does not have anyone in a defined regional leadership role, following the resignation of Maggie Choi and OMG CEO Barry Cupples taking over in the interim. OMD has also had an unsettled time in China, with the departure of a number of senior executives including CFO Ian Lee and MD at OMD China Winnie Lee. It will be hoped the appointment of former VP Mindshare China Siew Ping Lim as China CEO will add stability there.

Elsewhere, OMD has added to its reputation as a creative and award winning media agency, including a Best Use of Digital win at the Valencia Media Festival for its Intel Swarm work originating out of Singapore. The agency also continued to grow and diversify with new strategic business units and partnerships, including Flow, a dedicated unit delivering search engine optimisation and marketing solutions, branded content and sponsorship division Fuse, and Ignition Factory, a high level strategic ideas and channel planning company.

PHD

Regional head Cheuk Chiang
Score this year 7
Score last year 6

Though still a challenger brand, PHD has made phenomenal progress in Asia over the past three years under the leadership of CEO Cheuk Chiang. 

The agency now has a much clearer positioning than when it launched, and has succeeded in winning over some of the world’s biggest marketers with its emphasis on strategic planning and innovation. This was reflected in its recognition as Media Agency Network of the Year for the second year running at Campaign Asia-Pacific’s Agency of the Year awards.

In parallel to global appointments by Porsche and Elizabeth Arden, 2010 saw PHD take on regional accounts from the likes of PepsiCo, Lipton, AS Watson, National Australia Bank, Abbott and Red Bull. This placed the agency firmly at the top of the Campaign Asia-Pacific New Business League throughout the year.

In addition, last year’s alignment with Unilever has prompted the network to expand opening operations in Vietnam, Sri Lanka and Japan (in partnership with Omnicom sister agency I&S BBDO) a bold move given the dominance of local firms and a throwing down of the gauntlet to Mindshare, one of few successful foreign agencies.

There is, of course, still room for improvement. The agency is undoubtedly strong in China and Australia (where managing partner Mark Holden recently took on a global strategy role), but Southeast Asia remains a challenge. Howard Smith was brought in to refocus the agency in Singapore following the departure of Pat Lim but so far progress has been overshadowed by the agency’s achievements elsewhere.

Starcom

Regional head J. Seah/ B. Teo/ J. Sintras
Score this year 4
Score last year 4

The year 2010, was, according to StarcomMediaVest Group (SMG), “a journey of reinvention in the face of prevailing market conditions”. Evolving from a traditional media planning and buying agency to one that provides communications solutions, has seen the agency claim a 340 per cent surge in the network’s new revenue stream.

Starcom China led the new business win charge, bringing in Mars and Wrigley, Shanghai Jahwa, Novartis and Liby. Other high-profile wins included Malaysia Airlines globally at the end of 2009, as well as Singapore’s Marina Bay Sands and Walt Disney, bringing the combined total of new billings to US$459 million across the region. A 22 per cent increase in billings growth sees SMG rise from 2009’s 12th place in the New Business League, to fifth in 2010.

New hires included Jonathan Hsia, GM Starcom Digital China, Singapore-based regional executive directors Shashank Tripathi and Bharad Ramesh, and human experience strategy leader Tess Caven. But the sudden announcement of the  departure of South Asia CEO Ravi Kiran, came as something of a surprise later in 2010. Starcom performed surprisingly well in the Agency Image Survey and was ranked number one in terms overall marketer awareness and number three for best agency. Marketers rewarded the agency for its global presence and the quality of its strategic insight. It could be argued the lack of a single regional leader has meant a certain lack of focus, although given the trend for large local wins, Starcom could argue they are ahead of the game. 

UM

Regional head NA
Score this year 4
Score last year 4

As one of the lower profile media agencies in the region, UM punched well above its weight in 2010, picking up a series of big wins including Coca Cola and Tata Motors in India, Mars for Japan and in China, Founder and Bank of China. In Australia, traditionally UM’s strongest market in the region, the agency picked up Panasonic and the entire L’Oréal business - the latter win resulting in a parting of the ways with Unilever.

What Universal McCann has achieved in terms of business retention and wins is all the more commendable given the currently confusing management structure and on-going search for regional CEOs at both UM and parent Mediabrands. 

Henry Tajer, is no longer UM regional CEO and APAC president, but remains based in Australia as chairman of Mediabrands. The agency is in need of a strong figurehead in the region, something that has been missing for a number of years, with previous regional heads David Morgan and Jeff Cressall not around long enough to really make an impact. UM also needs to clarify its relationship with Mediabrands in the region. A better defined leadership structure within the two organisations would certainly help.

UM did make some efforts to beef up its regional team in 2010. New hire Mat Baxter became Australia CEO, while UM China gained CEO Simon Woodward, COO Lisa Wei and GM Guangzhou Sophy Su. Another significant development in China was UM walking away from a joint venture of 21 years, separating from erstwhile partner McCann Erickson Guangming Limited to tackle China alone.

ZenithOptimedia

Regional head Phil Talbot
Score this year 7
Score last year 8

While 2010 started well for Zenith, by the end of the year the agency was suffering from a series of big losses. The erosion of the L’Oréal business in Australia, Thailand and, most significantly, China, meant that Zenith fell out of the top ten in the  New Business League  by November. The corruption scandal surrounding VivaKi also generated unwelcome publicity. 

On a positive note, the agency did boast a number of key new business wins during the period, including the regional alignment of the Reckitt Benckiser’s US$2 billion global account. Other significant gains included Aviva, AS Watson , Gucci and Sanofi-aventis as well as local market victories such as M1 and Asia-Pacific Breweries Singapore, HTC China, Frontera and Masan Foods Vietnam, and BMW Digital Taiwan. 

And while most of the region’s media agencies bemoan high staff turnover, ZenithOptimedia Asia-Pacific must rank as one of the most stable. Only one CEO resignation in the region, in the Philippines, was swiftly remedied by the appointment of Venus Navalta as chairman, and new CEO in Vietnam Devapriya Mohanty was the result of Roopam Garg’s transfer to a global client leadership role on Reckitt Benckiser in London. 

The agency is one of the strongest performers in the Agency Image Survey, ranking second best agency, with China listed as the agency’s strongest market. Marketers scored Zenith highest for its global network presence, although it also scored well for creativity and quality of strategic thinking. 

This article was originally published in the February 2010 issue of Campaign Asia-Pacific.