Faaez Samadi
Mar 1, 2019

"It's been a hell of a journey": Nick Waters on exiting Asia

The former APAC CEO of Dentsu Aegis Network sat down with Campaign Asia-Pacific for an exit interview just before leaving for his new London-based role.

Nick Waters
Nick Waters

Dentsu Aegis Network (DAN) announced in December that its longtime APAC CEO, Nick Waters, would be leaving for a new role as executive chairman of DAN UK and Ireland. Before departing, Waters agreed to sit down for an exit interview reflecting on his nine years in the top regional role, the merger of Aegis and Dentsu, what Asia taught him, the biggest challenges the industry faces in this region, and more.

With your DAN Asia tenure ending, let’s go back to where it began. How did you end up out here?

I started [in Asia] in March 2010 with what was then Aegis Media. I was recruited from WPP—earlier in my career I’d been here in Asia running Mindshare, and I’d gone back to my hometown London to run Mindshare EMEA—and that’s where Jerry Buhlmann found me. I was actually his first hire.

He said, I’m the new global CEO of a company that’s basically overweight in Western Europe and there’s not going to be any growth there—this was the second half of 2009, so the financial crisis had well and truly hit. We’re very late into Asia, and he said he needed someone to get growth for us there. He was interested in my prior Asian experience, so that’s how it came about. The brief was to go and accelerate growth in Asia, and very explicitly grow quicker than you can just organically, go out there and acquire companies and quickly get us to a credible scale. So that was a really exciting brief.

Is that what made you think, ‘yes, I’d like to return to Asia’?

There are a couple of factors really. I had always been a media agency bloke—I joined Ogilvy in the old full-service days, but I’d been a media guy and been 17 years at WPP. I joined as a graduate trainee, so I’d never changed company—Ogilvy morphed the media department into Mindshare.

So after 17 years, it was probably time, or else you get institutionalised, and I was in danger of being WPP institutionalised. I was quite aware of that, and I kind of thought if I don’t move now, maybe I’ll never move. That was a bit of a frightening thought! Also, I was a media agency bloke, whereas Aegis, although it was relatively small, the ambition was to be more than just a media agency. And then obviously in the WPP world, if you’re managing an agency, you don’t go anywhere near M&A, the corporate machinery does all that.

So that was a really interesting part of the brief, Jerry saying ‘I want you to go and buy companies’. I said to him ‘well, being honest, I’ve got no experience in that’. He said, ‘oh it’s not very difficult!’ So it was the right opportunity at the right company at the right time, and Jerry was the right leader. I was quite impressed by his energy and ambition, his aggression and all that kind of stuff, so I thought, let’s go for it.

Then there was the Dentsu merger. How was that when it happened?

We were running hard as the Aegis global management team, because at that time Vincent Bollore had accumulated a stake right up the maximum you can before you have to make a takeover bid. So the concern was that Vincent Bollore was going to acquire us and merge us with Havas. So we were trying to keep the share price up to make it too expensive for that to happen.

We were actually doing well and that attracted the interest of Dentsu. Their management team at the time had clearly been coming to their own strategic point of view regarding their investment in Publicis, which they sold and that realised a considerable amount of cash, €900 million maybe, I can’t remember the exact figure. They wanted to put that to better use—it was a significant minority stake in Publicis from which I don’t think they were able to get any leverage.

They came to the view that they needed to do a big global acquisition. And I think really, I’m not sure whether IPG was within that context or not, it possibly was, but Aegis and Havas were probably the two more likely ones. I think Aegis possibly had a slightly better geographic distribution and that appealed to the Dentsu management at the time.

[Dentsu] quite rightly said, we’re not buying your business to tell you how to run it, we want you to run it. 

So they made a good offer to the shareholders, if memory serves me right it was a 48% premium over the undisturbed share price, so shareholders said thank you very much, not a difficult decision! But actually whilst 48% sounds like a lot, you’ve got to remember that sterling had depreciated quite a lot against the yen, so on a currency basis it wasn’t that sort of a premium. But it was a very good deal all-round.

That changed the dynamics of the business here in Asia, because it really was the only territory where we had to merge businesses. Dentsu had a handful of assets in the Americas, almost nothing in Europe from memory. So it all had to take place here in Asia, and they were very good about it. The Dentsu leadership at the time made it clear they wanted the Aegis leadership to run the international business. Prior to acquiring Aegis, Dentsu derived 16% of its revenue from outside Japan. The day they bought Aegis that went to 42%.

They quite rightly said, we’re not buying your business to tell you how to run it, we want you to run it. So Jerry and his management team stayed in place, which meant I was asked to merge the business in Asia, which was great. It was a very rare career opportunity, to be honest.

The Dentsu merger must have been a challenge to oversee, both in terms of business practices and cultures?

It was hugely challenging. People talk glibly about cultural differences, without perhaps really thinking about it. The way I’d characterise it, is at that time, Aegis and its leadership was quite typical of a western, Anglo-Saxon publicly listed, capital markets business. Run, run, run, hard, hard hard, quarterly statements, keep the share price up. That’s what we were doing, it was quick decision-making, quick turnarounds, all this kind of stuff. Dentsu was quite typical of a longstanding Japanese company—115 years old, and all that that entails, taking a long-term view of things. Dentsu publishes a three-year mid-term plan which is the shortest planning horizon they feel is sensible. Three years is quite sensible, quarterly is nuts!

Back then we had about 1,500 people, now the business is almost 15,000 people. So the scale has changed out of all recognition. It’s been a hell of a journey.

As a consequence, the way you think about things, the way decisions are taken, the way people are briefed, everything is completely different. But we had good will on both sides, both parties wanted to make it work and there was good respect and intent from both. Now it wasn’t without bumps in the road, but we put the two businesses together effectively. And actually, the scale of the business is dramatic. Starting at Aegis in March 2010, it was a sub-scale, underweight, fragmented business, it wasn’t properly built out across the region. Back then we had about 1,500 people, now the business is almost 15,000 people. So the scale has changed out of all recognition. It’s been a hell of a journey.

How much had Asia changed from the first time you came to when you returned?

Everything moves more quickly in Asia than it does in Europe and when I first went back to Europe from Asia, it was like jumping into a cold bath really! So it was quite fun getting back into the fast lane—I’m mixing my metaphors badly I know—but it was fun getting back to Asia. The pace here is ferocious and not everybody can cope with that. It does burn people out much more so than in Europe. I’m not saying one is better than the other, they’re just different.

In your nine years since Aegis, has Asia gotten faster?

Yes, some aspects of it have because I think the client side of marketing has changed. Client marketers don’t get time to build brands now. It’s so much more driven by changing consumers, which themselves are being driven by technology and digitisation. Consumers jump from one thing to the next. Everything is disposable, content is disposable. Previously people had time to craft brand building communications that would work over a long period of time. That doesn’t exist anymore. So clients say I’ve got to have another piece of communication or the consumer’s going to get bored. I’ve got to say something new, something new, bang bang bang. As a consequence, the agency side of the market is just constantly turning. So business has always been fast in Asia, but our business has speeded up even more.

What’s the one thing you know now that you wish you’d known nine years ago when you came back to Asia with Aegis?

Wow, that’s a super tricky question! Well, I think it would have to be around the impact of Alibaba in China. If I'd had a crystal ball and could have seen what Alibaba was going to do to ecommerce in China, it would’ve been good to get ahead of some things.

People were obsessed for some years about Google and Facebook, for good reason. But actually I think Alibaba and Amazon will have more profound impact­.

Alibaba and Amazon are potentially highly disruptive. Obviously in the nine years I’ve been here, we’ve seen the real rise of the tech platforms, and people were obsessed for some years about Google and Facebook, for good reason. But actually I think Ali and Amazon will have more profound impact­—we’ve seen that with Ali in China more so perhaps than we’ve seen Amazon’s impact—but Amazon is going to come now.

That probably has profound implications for brands and how to reach consumers, and for Google and Facebook, which in some ways is good. Whilst we’ve always had a constructive and productive relationship with both Google and Facebook, I think duopoly is not healthy for brands. I think more choice in the market for consumers and brands is better, and similarly for agencies, more inventory supply is healthy. If Ali and Amazon, Google and Facebook have a good old battle I think that’ll be very interesting.  

What learnings will you take from Asia back to the UK with you?

I’m not sure there are specific learnings I can bring from Asia to the UK, but one thing I observe about business in general in Asia is there is more bravery, more entrepreneurialism, there’s less fear of making mistakes. Here, I’ll try something, if it works great, if it doesn’t, try something else. Whereas I think there’s a conservatism in the UK, which is perhaps a fear of failure or making mistakes, and if we can encourage our people, our agencies, our clients to be a bit bolder, try things, I think that would be a positive.

Waters circa 2009 when he left Mindshare to join Aegis


I also think there’s a benefit in the speed of Asia, and I would try and encourage people to adopt some of that speed. I hesitate to say this because this sounds critical, but I think there is a tendency to over-intellectualise things [in the UK], and have lots and lots of analysis and meetings and discussions. Whereas in Asia, if someone’s got a good idea, do we agree, ok, let’s go and do it. It would be nice to inject some of that energy and entrepreneurialism and speed.

What will you miss about being in Asia?

I will miss the wonderful Singapore sunshine and climate! Singapore has been a fabulous place to live, it’s been great to me and my family. But we’ve only ever been visiting, it’s time to go home. There are things about the UK that I’ve never made a point of missing, but that I’m really looking forward to getting back to, like the prevalence of high quality live sport. I’ve already got tickets to football and rugby, just figuring out how to get tickets to the cricket World Cup and the Ashes. I love all that stuff!

As you leave, what do you see as the biggest challenge for adland in Asia?

A concern I have observed over recent years is a deterioration in respect for agencies. There has unfortunately been a negative narrative around agencies, whether it be about transparency from the ANA issue a couple of years ago, which created a lot of heat but no real problem. I don’t think anything came out of it, apart from negative sentiment towards agencies—are they all crooks, are they all cheating us? Which is absolutely ridiculous, but that narrative hasn’t gone away.

We’ve had so many instances of mid-to-junior people in our organisation leaving the company, and when we do the exit interviews, they say it’s because they can’t stand the rudeness from clients any more. 

I think it was fuelled partly by the early days of programmatic as well, where there was no transparency on the value chain. Yes, agencies did make some money out of that, but that was opportunistic. They weren’t doing anything wrong. It was a new business, with new business models, and we happened to make a margin out of it. Well, that’s what our shareholders ask us to do. That negativity around transparency and trust is unfortunate, and the agency sector needs to be much more vocal about articulating its values and the value it brings.

I think that has coincided with a deterioration in the way marketing departments deal with agencies. We’ve had so many instances of mid-to-junior people in our organisation leaving the company, and when we do the exit interviews, they say it’s because they can’t stand the rudeness from clients any more. As an agency you’re supplying a service and it’s the client’s prerogative whether they feel that service is good or not, and they’re perfectly entitled to criticise that service. But it’s how you do it, how you treat people sitting across the desk from you. It’s completely inappropriate, some of the language used to mid-to-junior ranking people, and we’ve found a worrying increase in that. Senior managers on the client side need to take responsibility for the actions of their marketing departments, and I don’t see enough of that at the moment.

I think if clients disrespect agencies and the value they bring, they are risking an enormous amount of value to their brands. Because at the end of the day, the single most valuable item on the balance sheet of most companies is intangible assets, and brand is usually the single largest intangible asset. 

Of course agencies have struggled to keep pace with change, I understand client frustration with that. But clients have to got be careful not to allow that frustration to morph into just a general criticism of agencies, because the job that agencies do now is so much more complicated than it was before. We have to do so much more, so much faster, with so much more complexity, so much more computer power, analysis, so much more intellect needs to be applied to it, and yet of course, fees have not kept pace with that.

I think if clients disrespect agencies and the value they bring, they are risking an enormous amount of value to their brands. Because at the end of the day, the single most valuable item on the balance sheet of most companies is intangible assets, and brand is usually the single largest intangible asset. Agencies tend to be the biggest contributor to brand health and growth. So if you trash the agency, you’re in danger of trashing your brand, your most valuable thing, and we see it all the time. It’s a frustration I have that the agency marketplace is not more vocal in that respect.

What are you most proud of from your tenure here in Asia?

I think it’s one thing, really. We’ve moved from being a fragmented, underweight, Aegis that was barely on the map in Asia, to a very scaled, strong creative, media, digital business that has real capability in every market across the region. We’ve built a good business, and that’s it. That was the brief, and that’s what we’ve done. 

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