As Asia begins to recover from the economic 'flu, questions over regional HQs are arising - Agencies grapple with best way to run the region

Of the 15 network agencies operating in the region, Hong Kong is now - with Mr Kevin Ramsey's recent appointment as regional COO Asia-Pacific at J. Walter Thompson - home to nine regional headquarter bases: McCann-Erickson, Ogilvy & Mather, TBWA, D'Arcy, Grey, FCB, Bates and Saatchi & Saatchi. With only three regional headquarters based in Singapore (Ammirati Puris Lintas, Dentsu Young & Rubicam and Euro RSCG), Hong Kong is, therefore, still deemed to be the best city to set up an Asia-Pacific base. A recent development that is less talked about, however, is the extent to which some agencies are choosing to disband the regional concept altogether. In the past three years, four of the major networks have effectively cut regional operations. BBDO dispensed with a regional headquarters for Asia-Pacific following the departure of Mr Chris Jaques in 1998, with country managers now reporting to Mr Jean Paul Goudard, who is based in Paris. M&C Saatchi chooses not to run a regional headquarters, with Sydney-based Tom Dery being the regional figurehead. DDB Needham dispensed with its central Asia-Pacific headquarters and now runs four zones, which report in to Mr Bernard Brochand, again based in Paris. It could be argued that the cutting of regional bases is due to a reversion to the 'West-is-Best' attitude, or it could be due to the recession of the late 1990s? Is there a unified strategy behind this that could lead to definitions of a trend? The official response from agency heads suggested that this is not the case. In the case of JWT, the official explanation was that the regional role has come down to a finance function only, with a regional executive creative director based in Thailand. The finance reason also applies to BBDO and, since the departure of regional CD David Alberts and the disbanding of The Hub in 1999, BBDO employs no other regional staff. At M&C Saatchi, the story is different. With the benefit of hindsight and the experience of running a monolithic regional base in the 1980s and 1990s, M&C's philosophy of brutal simplicity is, according to Hong Kong CEO Ian Thubron, a strategic platform that applies equally to agency structure. And at DDB Needham, CEO Aaron Lau said markets which fall into the Asia-Pacific region have developed to a point at which it is no longer practical to have one regional base. The history of regional headquarters was chartered most recently in the Adarco report of 1999. Agency growth in Asia-Pacific dates back to the 1940s and 1950s. By the mid-1980s, all of the major parent company holding groups had a presence of some kind in Asia's key markets, save China and Indochina, which opened up in the late 1980s and mid-1990s as embargoes from the West were lifted. The need to assure clients that overseas operations were working in tandem with headquarters in the West gave birth to the role of regional managing mirector. The 1980s and early 1990s, therefore, saw regional offices grow more powerful, but with costs escalating and reporting lines becoming blurred. Positioned above the local office, regional agency headquarters were open to internal rivalries - in some cases to the detriment of client business. Negative aspects of regional agency power bases began to come to the fore. However, with all of the problems associated with running a regional office, it was the economic turmoil of the late 1990s which forced many agencies to review their regional office set-ups. The role of the regional managing director of the mid-1960s did not differ wildly from job specifications of today. However, the intricacies, politics and sensitivities of today demand a vastly different personality profile from those of the pioneers. Adarco lists original objectives as "managing growth of the agency network in the region, ensuring that agency philosophy was absorbed by new agencies, ensuring that international clients were being serviced to acceptable standards and protecting international accounts from being won by other agencies." Compare that to the job specification of regional chief executive officer Keith Smith of Asia's latest network entry, TBWA, and though the terminology has become significantly more sophisticated and precise, the basics remain pretty much the same. "The regional focus at TBWA is to provide support and education across markets, to knit together culturally disparate companies run by owner managers, to operate as a network via our regional business, to buy agencies in markets where we lack presence, and to equip the network for the new millennium," he said. According to Mr Smith, the key function of his role at TBWA's regional headquarters in Hong Kong is to make sure that the regional division serves as "guardians of TBWA's cultural identity". TBWA launched in Hong Kong in 1998 through the acquisition of Lee Davis Ayer, Peter Thompson & Associates and the launch of Omnicom brands Tequila and TBWA. Mr Smith has faced a long list of practical things to do in his tenure, which, aside from knitting together these culturally unique brands, included opening up new markets to the TBWA brand. Meanwhile, at Leo Burnett, Mr Steven Gatfield, who arrived in the region in 1995, chartered the agency's Asia-Pacific operations through the biggest period of change the company has experienced in its history. With Japan falling under his aegis, the alignment with Dentsu is no small feather in the regional cap. Of all the regional headquarters operating within the region, Ogilvy & Mather stands alone in its long-term commitment to the region, both in terms of resources and development. With a core regional staff of 15 people based in Hong Kong, the division is set, said regional head Miles Young, to support all Ogilvy operations as they continue to metamorphose into the agency of tomorrow. Serving as the hub for new products and carrying the brunt of responsibility in managing new fee structures, Ogilvy's research, training and consulting products are backed by the support of its Asian regional headquarters. Managing in a supportive role, the development demands of integrated and interactive also come under the aegis of Ogilvy's regional HQ. With WPP (Ogilvy and Thompson) having recently chosen to shore-up Thompson's regional base in Asia once again, the Ogilvy module may well be proving to be a model for success that agencies might ignore to their peril.

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