Dismal year bites into Taipei agency billings

Twenty-four of the 39 agencies surveyed by Brain Magazine suffered drops in gross income and billings, and even those that achieved growth saw only modest gains.

The Ogilvy Group (which includes O&M Advertising, Ogilvy Results and Ogilvy One) kept its top spot with a gross income of NT$704 million (US $20.4 million), a 5.4 per cent gain from the previous year.

Just one other agency did better - fourth-placed United Advertising with 6.5 per cent growth (NT$396 million). Other winners among the top 10 were third-placed J. Walter Thompson, with 5.3 per cent growth in gross income (NT$417 million); sixth-placed McCann- Erickson, with 4.4 per cent growth (NT$381 million) and Hwa Wei & Grey, which squeaked by at 0.2 per cent growth (NT$387 million).

The performance of this handful of agencies was remarkable considering the challenges the year brought.

Last year started out badly for Taiwan, and got progressively worse. By mid-year exports were in a nose-dive and the economy suffered its first ever negative GNP growth. Two fierce typhoons that devastated the island did not help either.

Consumers tightened belts, and advertisers postponed product launches and cut existing budgets. Even before the September 11 attacks on the US, adspend was way down, eventually ending the year at NT$62.5 billion - a - 25.7 per cent decline from 2000

Hardly surprisingly, Taiwan's top 39 advertising agencies saw billings drop by five per cent to NT$45.9 billion from NT$48.2 billion in 2000; while gross income fell by 6.2 per cent to NT$6.5 billion from NT$6.9 billion in 2000.

If there was a fair measure of success for 2001, it might have been keeping agency business activity at levels achieved the previous year.

Diversification was a factor that helped the Ogilvy Group to surpass that benchmark. Said Ogilvy chairman, Shenan Chuang: "We won the Lotto account because we offer more than advertising. We told (Taipei Bank) we could add public relations, direct marketing and more in the mix."

Ogilvy has nine companies in Taiwan, offering above- and below-the-line services. "If you only look at advertising as a measure of agency health,

added Chuang, "you're still in the 1980s."

JWT managing director, Steve Lin, attributed his agency's performance, in part, to a switch to fee-based accounts.

"Last year, 43 per cent of our business was fee-based, compared to 30 per cent a year-and-a-half before,

Lin said. "This helps a lot in tough times.

Ten per cent of JWT's billings came from new business, and there was a higher than usual percentage of local clients. "More multinational agencies pitched against local agencies for local accounts last year," Lin added.

That echoed a key finding of the survey.

Only one local agency - United Advertising - was listed in the top 10. Eleven out of the 17 local agencies included in the survey saw billings drop, and multinationals took 76.4 per cent of total billings.