2016 Agency Report Card
Intro, methodology and report card gallery
Detailed analysis: Creative agencies | Media agencies | Digital agencies
Carat didn’t have a bad year by any stretch, but its performance, especially in new business, seemed to lose a little of the lustre of previous years. After finishing 2015 in second position on R3’s New Business League, Carat fell in 2016 to sixth and was surpassed by Starcom, Mindshare, Zenith, OMD and PHD, and saw its estimated win revenue fall to US$37.8 million — a worrying trend line when viewed against US$58.4 million in 2015 and US$83.7 million in 2014.
Carat remains formidable: it won 427 pitches and had 30 percent organic growth (according to Recma), as well as strong client retention. As the year ended it was named the top global network in Recma’s latest Network Diagnostics Qualitative Evaluation report — for the eighth time in a row. Sean O’Brien won Asia-Pacific Media Agency Head of the Year at Campaign’s Agency of the Year Awards. Business wins included significant work from Mondelez in India, the Western Australian government and Wyeth in China.
The network also entered into a joint venture with Singapore’s Economic Development Board on a global data innovation centre called ‘the Hub’, which will work on audience knowledge, data-modelling, AI and neuroscience.
It was a year of big changes in senior positions for Havas Media. With five top-level hires across the APAC network in a year, Havas Media also installed four new country CEOs: Karl Wu in Greater China, Andreas Vogiatzakis in Malaysia, Joseph Rhee in Korea and Ferdinand Gutierrez in Thailand.
The network continued to integrate its Havas Village model across APAC, which looks to be paying off. The agency claims revenue grew by 29 percent and it won more than 100 pieces of new work, though win revenue slipped on R3’s New Business League ranking, dropping Havas Media out of the top 10.
The new wins include Netflix, Lenovo, Swarovski and Philips Lighting. However, despite a 95 percent client retention rate, Havas Media did lose two sizeable accounts in DBS in Singapore and Indofoods in Indonesia. The majority of Havas Media’s success in 2016 was enjoyed in Southeast Asia and Australia, and due to the launch of new units, including a sports and marketing division and ecommerce service Restellar.
It’s been a building year for Initiative, which is not an encouraging sign given that last year was more or less the same. After much reshuffling of leadership roles in 2015, there were yet more musical chairs in 2016, with Leigh Terry coming in to take over as CEO of IPG Mediabrands following the resignation of Prashant Kumar, along with new CEOs named in Singapore, Malaysia, Australia and Hong Kong as IPG looks to move from its cluster model to a geographic-based structure. Such a dramatic shift indicates problems for the likes of Initiative that need to be dealt with.
The year saw low single-digit growth for Initiative, with revenue shrinking in some markets. The agency is still feeling the loss of Coca-Cola in Thailand in 2015, and 2016 saw a handful of other sizeable brands leave the stable. That said, Initiative can point to relative success in terms of growth and revenue in India and China — markets where others continue to struggle — as well as parts of Southeast Asia.
Win revenue doubled in R3’s New Business League this year. Initiative won its first ever APAC regional clients, Suntory/Cerebos and Maybank, which is a notable achievement. It also picked up a smattering of local business. But it’s clear there is more work to be done. The restructuring across IPG and focus on digital talent within Initiative will hopefully pay off in 2017.
GroupM’s Maxus, which focuses largely on local accounts, made up for a tough 2015 by scoring US$300 million in new-business billings in 2015 — representing about 15 per cent of its annual billing total. The network also won pitches to retain more than US$250 million in billings.
The latter category included brands such as Pernod, Shanghai Auto and Pfizer, while the former brought new revenue from Tata Motors and Abbott in India, China Mobile and Toyota in China, OCBC in Singapore, and many less well-known regional names, such as Mayora in Indonesia, and Max’s Group in Philippines. Maxus’ significant losses were Aldi in Australia and Tesco in Malaysia, and altogether the agency says losses added up to less than US$10 million in billings.
But when the R3 New Business League tallied up its numbers, Maxus finished the year at the bottom of the media list — the only agency with negative overall revenue.
The ‘Mesh’ command centre expanded from India and Philippines to new markets Australia, Singapore and Vietnam with five or six key clients including L’Oreal and Vodaphone, and Maxus intends to expand it to 40 or more this year.
The network’s service offerings are expanding into areas traditionally held by management or tech consultants. For example, Maxus suggested and then launched a new vertical business for Kalyan Jewellers in India, and the client is now increasing its investment in the effort. Maxus also helped Pfizer China plan and implement a DMP (data management platform) and will help integrate that system with the client’s CRM systems. Chris Drumgoole joined as technology director, part of Maxus’ regional team, a new position created to lead Mesh, DMP and tech consultancy efforts.
Maxus launched its 21st APAC office in Taiwan in July.
The ‘Walk the talk’ programme to promote equality, spearheaded by global CEO Lindsay Pattison, came to Phuket during the year, and Maxus claims its workforce in Asia is evenly split along gender lines.
MEC continues to be a work in progress. After a change of the guard in APAC, China and Australia the previous year, new CEO Peter Vogel has been trying to get MEC back on track with mixed results.
The biggest strides so far have been in regaining new business, largely thanks to an about-face by Daimler. Just months after shifting its business to Fuel, a new agency reporting to Zenith, it decided to return its Mercedes account in China to MEC with a short-term contract. In Indonesia, Tempo also came back to MEC, helping the agency pull off a 25 percent uptick in new billings with added clients like Friesland Campina (APAC), HP (China) and Vodafone (Australia). The efforts have pulled MEC up to eighth spot in the R3’s New Business League media rankings.
Unfortunately weak spots continue to emerge. The Singapore Tourism Board opted in October to re-pitch the business after working with MEC for the past eight years (and awarded it to Zenith in January). The loss coincides with a change of leadership in Singapore, seeing Sharon Soh leave the agency after 18 years. MEC also lost some new economy clients including Lenovo (regional) and Freecharge (India). A bigger loss was relatively new client Uber China, which shifted its business to OMD after a head-to-head pitch.
MEC’s leadership says it’s working to make the agency client-focused, doubling down on its global expertise in customer journey behaviour.
But regionally, there’s little ‘wow’ factor around MEC’s work, made evident by the lack of nods at major award events in the region. Culturally, MEC is still trying to find its way.
MediaCom knew coming into 2016 that it would be a tough year. Global client Volkswagen was deep into its review process with warning signs flashing on the dashboard. Meanwhile, multiple market reviews loomed from P&G. With revenue at risk, MediaCom’s strategy was simple: focus on efficiencies, listen to existing clients and pitch, pitch, pitch.
And that’s what the team did. The agency vied for no fewer than 480 pitches, winning contracts worth US$875 million in new billings, exceeding a solid portfolio of wins in 2015. Particularly rewarding this year was the addtion new economy clients Uber (APAC) and Agoda (China, Australia, Indonesia). Desperation breeds tenacity, it seems — although the agency credits a new regional pitch training programme spread by more than 100 ambassadors.
The early fears were borne out. Volkswagen shifted gears, sending its global business over to PHD. And while MediaCom says the team can “hold our head up high that we did not crumble to ‘win at all costs’”, there’s no denying it was a stinging blow requiring swift reorganisation. However, the agency says it has managed to shift VW personnel over to newly won accounts. Other clients re-pitched, too, with China Unicom and three Australian brands parting ways. So despite a fourth-place showing in R3’s New Business League on revenue, the agency ranking has slipped to 11th on a net basis.
P&G’s review turned out somewhat better — with the exception of Japan — with MediaCom successfully defending its haircare business.
Mindshare’s challenge in 2016 was to build on the solid growth of recent years in spite of rising client conflicts. To do this, Mindshare expanded the scope of its work, upselling existing clients. This included building custom programmatic trading desks for seven of its top 10 clients, to top APAC programmatic billings.
Forging ahead, the agency snagged US$94 million in new-win revenue, topping R3’s media new business rankings with additions including Indofoods in Indonesia, Malaysian Airlines in Malaysia and Yili in China. Mindshare also placed top in RECMA’s qualitative media rankings.
A new content practice introduced late in 2015, Content+, saw significant growth this year, producing a highly lauded work for Unilever’s Brooke Bond Red Label, creating India’s first-ever transgender band that brought home a coveted Glass Grand Prix at Cannes. Yes, 2016 just poured network awards.
But perhaps most encouraging were all the efforts put into employee training, including a credentialling programme for all APAC employees.
Having spent a large part of 2015 reorganising its business, 2016 was the year OMD sought an injection across APAC under its chief Stephen Li. Investments made across the network were expected to bear fruit, and several of these came through impressively.
Overall OMD saw a 21 percent increase in billings compared to 2015, jumping to fourth spot on R3’s New Business League rankings from 10th last year, with several markets contributing. Australia had a strong year, winning the Village Roadshow account as well as adding the likes of Coles to its roster. Smaller markets also showed significant improvement, with Singapore securing 10 percent growth, New Zealand pulling in US$230 million in billings, and Thailand seeing 40 percent growth.
OMD won big-ticket new clients across the region, such as Sony Pictures, Carlsberg in China and Vietnam, and Uber in China. The latter business evaporated, however, following the Didi Chuxing merger. OMD also saw 95 percent client retention across the region, although this is tempered by the significant loss of Tourism Australia’s global account, as well as Silkair and H&M regionally.
Another big feature of 2016 for OMD was signing high-profile partnerships, most notably with Facebook to fully integrate Atlas measurement region-wide, the first APAC media network to do so. Other tie-ups include Google in Singapore, Nielsen in Vietnam and Alibaba and Tencent in China.
OMD also continued to grow its APAC teams, seeing a 30 percent increase in recruitment in 2016.
The clear highlight of PHD’s year was the global win of Volkswagen Group’s approximately US$3 billion media-planning and buying duties. The agency’s Asia-Pacific offices were an important factor in the appointment, with the region accounting for around a third of the total account. At the same time, it’s important to note that in China, PHD will be responsible for Volkswagen’s corporate import business only — not the portion of the brand that operates under joint-venture.
Aside from VW, PHD pulled in 60 pieces of new business, with Australia and Hong Kong accounting for many of the most significant wins. Still, PHD fell in R3’s New Business League, year-on-year, from first to third. Business growth facilitated the appointments of a number of strategy leaders — both regionally and also in India, New Zealand and the Philippines. The agency further surprised with the launch of an office in Korea. This has a staff of five, which PHD plans to double over the course of this year, and services clients including Amore Pacific, HP, SC Johnson and Ferrero.
Regional business retention was good, and India continued to grow its flagship Unilever account significantly based on digital spending. The agency is still seeing its investment in Source, a collaborative planning tool, pay off. The platform continues to evolve both as a staff motivator and service for clients, and it has arguably turned PHD into one of the most connected media agency networks. However, the agency’s other initiatives have been relatively minor; they centre on knowledge-sharing, and include a quarterly magazine and fortnightly video debates exploring specific topics.
PHD has built itself into a serious contender in the region, based on the fact that the focus of the media business is shifting from scale to strategy. More investment in tangible, sector-leading technology will help to ensure that it continues to strengthen its position.
Although Starcom hit its own goal for revenue growth in 2016, it dropped off the map in terms of new business for most of the year. Despite finishing 2015 in the fourth spot on R3’s New Business League, the network fell out of the top-10 in the latter half of 2016 — only to surge into fifth place at the last moment.
Wins included retaining P&G (even though Starcom lost the account in the US), and adding business from Citibank and Electronic Arts regionally. It also clocked up a number of significant local-market wins, such as Coca-Cola in Thailand, Yi Ou Lai in China, and JP Morgan in Taiwan. However, the network also lost Singtel in Australia, Westpac and the tourism authority in New Zealand, General Mills in China (through a global realignment) and Smart in the Philippines.
Following the restructuring that created Publicis Media, the agency said farewell to Asia-Pacific president Mike Amour, who joined Havas Worldwide, and Jeffrey Seah, longtime CEO of Southeast Asia, who left to pursue other opportunities. Promotions that followed included Bertilla Teo becoming Greater China CEO of Publicis Media and Sapna Nemani stepping up to become Starcom’s Greater China CEO.
The self-proclaimed ‘Human experience company’ put energy into understanding consumers by investing in its OS for insight, planning, buying and measurement, its Pace Panel audience-knowledge platform, and cross-screen planning tool, Tardis. On the development front, Starcom invested in a personality-based profiling system that aims to improve team understanding.
It’s been a case of maintaining strength in the face of adversity for UM, something which the agency has managed reasonably well. Big leadership changes and restructuring across IPG MediaBrands in APAC have seen Leigh Terry come in as global CEO plus a host of new regional CEOs, a move that is bound to affect UM’s productivity. It’s to be hoped these telling shifts will start bearing fruit in 2017.
All that said, UM saw pretty solid returns in 2016. It was named RECMA’s top global agency for new business momentum, and sits in fifth place in the APAC major wins ranking — a solid effort given the numerous senior changes. UM collected US$92 million in new wins, according to RECMA, but that’s tempered by a chunky US$37 million in losses. Overall, though, the agency saw single-digit revenue growth, which needs addressing.
Tourism Australia’s global account was a big win, as were global and regional clients GoPro, Fitbit and VF Corp. Yet the agency also felt some big losses, one of which ended a 13-year relationship. UM did take home a host of awards, spread primarily across its offices in India, Australia, Hong Kong and Malaysia.
The final phase of Vizeum’s three-year plan to build out its Asia-Pacific network was easily its calmest. In 2015, the agency saw rapid growth through office expansion and a raft of new business wins, but that pace slowed last year.
Settling in big clients, such as Abbott, Huawei and BBC, Vizeum enjoyed above-average revenue growth in 2016. But its focus on existing clients detracted from the hunt for new business, only securing two-thirds total new billings from the prior year. The top wins were spread across the region, while Australia struggled a bit with retention. Last summer, Vizeum APAC started a full-year pitch training programme to sharpen skills and beef up its win record in local markets.
Vizeum prides itself on being a technology-driven agency, yet the share of digital revenues slipped, as some larger new clients needed more traditional services. An AI engine it created for BBC Earth linking162 videos to viewers’ emotional states proved effective and rewarding, winning two Spikes among other awards.
Zenith’s strong performance during and immediately after the Publicis Groupe restructuring that led to a series of leadership changes, including Gerry Boyle’s elevation to APAC CEO of Publicis Media, is commendable.
The network has long held ROI as its central tenet, and this seemed to resonate with clients more than before during 2016. Zenith says it hit its target of revenue growth at double Asia’s overall GDP growth, and increased its new business conversion rate from 69 percent to 73 percent.
Most memorably, Zenith took a hard-fought prize estimated at US$100 million when it won 21st Century Fox’s regional business after a year-long pitch that finally concluded in October. It also prevailed in retaining Shanghai General Motors in the region’s third-biggest media pitch of the year (according to R3). Those big wins drove the network’s ascendance from fifth to second place on R3’s New Business League, where its estimated win revenue rose from US$32.2 million in 2015 to $65.4 million in 2016. India, with 35 new accounts, China with 16 and Taiwan with 15 led the way, but Singapore won DBS and the Economic Development Board, and the Philippines grew new business by 260 percent.
A DBS case study provides a good illustration of what’s working well for Zenith: The agency built a DMP (data management platform) to analyse digital attribution, allowing it to better align spending with likelihood to convert, and exceeded the client’s lead-generation target by 47 percent.
Innovations in 2016 included a live-planning dashboard for China that assesses brand health through Baidu, Weibo and WeChat, and Fugetech, a bid-management tool specifically for search-engine marketing in China, which filters out fraudulent activity to improve SEM efficiency.
The company increased its budget for talent development by 31 percent.