BRAND BATTLES: Asia's upswing

Signs that Asia's economies will strengthen next year have raised hopes of the return of big-budget campaigns at both regional and national levels. And in place of short-term tactical initiatives, there is also a belief advertisers are ready to take the strategic approach in marketing communications.

Asia's two most populous markets are expected to lead the way with strong adspend growth on the back of robust economic expansion. China's GDP is tipped to grow at a blistering seven per cent in 2004, according to the Asian Development Bank, while the Confederation of Indian Industry estimates 2003/04 growth at between 6.5 and 6.8 per cent for its market. Even Hong Kong, Singapore and Taiwan - whose economies were the worst hit by the Sars outbreak - are expected to post a recovery, with the ADB forecasting economic expansion of about four per cent.

With Asia shaking off the economic blues and consumer demand picking up, Zenithmedia predicts that regional adpend will grow 4.8 per cent in 2004 from 4.1 per cent this year. Agency heads expect adspend to rise across all categories.

Ogilvy & Mather has forecast that its clients will be spending three and five per cent more. However, regional chairman Miles Young, who describes China and India as the "golden duo", says the biggest change will be the mindset of advertisers who are becoming more strategic in their thinking and planning.

"I do believe that there is a re-commitment to the importance of branding among many of the global clients who had forsaken it or gone soft on it in the past two years. This will feed through to Asia," Young says.

TBWA is in the more bullish camp, expecting spend to increase by up to 10 per cent. Regional chairman Keith Smith says: "Post-Sars, there is a desire to get out and build things, even in non-Sars affected markets like Japan. The feeling is that we have had enough of the doom and gloom."

OMD Asia-Pacific chief executive officer Mike Cooper adds: "Although we are still in a minor recession at the moment, there are signs that companies are becoming more aggressive and long term."

An increasing use of below-the-line communications is also expected, as advertisers continue to keep an eye on the bottomline. Thus, amid expectations of improved operating conditions, agencies have stepped up their drive to ensure that they have the capabilities to meet the needs of their clients.

Publicis recently rolled out La Holistic Difference, its latest approach to looking at business, brands and consumers. Regional strategy director George Singleton says: "This involved launches in nearly every market in Asia-Pacific in the second half of this year, including training workshops and introducing the approach to key clients."

At TBWA, Smith says that the agency is in the midst of a global study aimed at identifying the key factors behind the propensity to purchase and what drives it.

"We will also be over-investing in training next year. Part of that involves taking people out of Asia and placing them in Europe or the United States and vice versa for about six months. The idea is to build their level of expertise in all areas," he says.

As optimistic as agency chiefs and marketers are of Asia's 2004 prospects, the mood is also tempered by concerns that another big shock, such as a major terrorist attack or the American economy abruptly taking a turn for the worst, could set the region back.

Without the shocks, as Singleton notes: "Clients are generally planning to spend more, but if not more, at least they aren't planning to spend less."

GDP - REGION ON AN UPTREND (%) 
 2002 2003** 2004* 
China 8.0 7.3 7.6 
Hong Kong 2.3 2.0 4.0 
Singapore 2.2 0.5 4.5 
Thailand 5.3 6.0 6.0 
Taiwan 3.5 3.7 3.9 
Indonesia 3.7 3.4 4.0 
Malaysia 4.1 4.1 4.9 
Philippines 4.4 4.0 4.5 
Korea 6.3 4.0 5.3 
Vietnam 6.4 6.9 7.1 
Source: Asian Development Bank 
** Estimate * Forecast.