Hakuhodo in new global push with Omnicom/TBWA alliance

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