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

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