Hakuhodo and Omnicom Group's TBWA plan to form a global alliance
with the establishment of a new Hakuhodo/TBWA advertising agency in
Asia, Europe and the US.
TBWA Asia Pacific regional chairman Keith Smith told MEDIA the venture
is just a formalisation of the partnership with Hakuhodo.
"TBWA Europe has been working with Hakuhodo for 10 years," said Mr
Smith, adding the new venture will serve primarily on the Nissan
account.
Hakuhodo and TBWA Worldwide will enter a joint venture to set up an
advertising network in Europe, the US and Japan which will cover the
Asia region as well.
Hakuhodo will take a majority stake in the new venture in Japan, while
TBWA will have majority ownership in Europe and the US.
The new venture agency, whose name has yet to be finalised, will have no
impact on the two agencies' current operations around the world, said Mr
Smith.
It is understood that Nissan's drive for a worldwide standard played a
significant role in pushing through this sort of horizontal global
advertising network merger, such as Proctor & Gamble being the catalyst
for the merger of the Leo and MacManus Groups to form BDM, now
BCom3.
TBWA handles Nissan on a worldwide basis in about 30 countries but not
in Japan. Hakuhodo handles the automaker's advertising business in
Japan.
After years of restructuring and operational trimming, Nissan plans to
centralise its global advertising and promotional activities in a bid to
reduce costs and to establish a more consistent global branding position
similar to rival Toyota.
TBWA Worldwide's acquisition of a majority stake of the Nissan-owned
advertising agency Nippo and creative shop Nissan Graphic two years ago
paved the way for Nissan's new advertising strategy.
Industry sources from Japan told MEDIA that mergers were an inevitable
trend to combat the increasingly consolidated advertising landscape.
The current flurry of M&A activity around the world spurred Hakuhodo to
search for an overseas partner to secure its position in the domestic
and overseas markets.
Recent developments in Japan has included Dentsu allying with the Leo
and MacManus Group and WPP holding 20 per cent of Asatsu-DK.
Industry analysts said this sort of Japan/multinational marriage takes a
long time to come to fruition, with the trend being to start off with an
alliance to test the viability of the relationship.
The M&A activity in Japan underlines the fact that Japanese agencies
need a global partner to strengthen their networking clout to meet the
rapid globalisation of many Japanese companies.
At the same time, the multinational agencies need a Japanese partner to
ensure a strong presence in Japan.
Meanwhile, new leadership at Hakuhodo - top-flight salesman Toshio
Miyagawa succeeded the presidency from Mr Takashio Shoji, who came from
a commercial production background - has established a new corporate
culture in the agency, which experienced a dip in profit over the past
year.
New objectives for Mr Miyagawa are to strengthen the agency's
competitiveness in Japan and overseas, and to prepare its planned
listing on the stock exchange in 2004.
Hakuhodo currently has no specific alliance with any MNC advertising
network since it broke ties with McCann-Erickson in 1994.
