But in markets where both Universal McCann and Initiative — even combined — are dwarfed by the market leader, is this such a good idea? GroupM commands roughly 40 per cent of the media pie in both countries and grants the biggest discounts.
So why not focus on their planning nous instead? Carat, also a small player, is playing the planning card with success in Asia — it picked up OCBC Bank in Singapore and Danone in Thailand in the last month. MEC, PHD, MPG and a number of others are also moving into that territory as the pile-it-high, buy-it-cheap media agency model unravels.
While it’s understandable, IPG’s move has the bitter taste of desperation. UM Jakarta lost its three biggest accounts — Pizza Hut, Bentoel Cigarettes and XL Telekom — in under a year. Observers point to the departure of widely-respected GM Johan Jahja to Motivator last year as the trigger of the agency’s demise.
IPG had to act swiftly to stop the rot. Last Friday, its 18 remaining staff of UM were given a week’s termination notice and a handful of job offers at Initiative. Now UM, once strong enough to part from its McCann Erickson mother ship last year, must piggyback its sibling. In Malaysia, where UM is strong, there is less disruption. The weaker Initiative will benefit from a group set-up.
But what the new IPG Media can offer advertisers is frustratingly unclear. The idea, we are told, is to “streng-then and sharpen IPG’s overall media capabilities”. IPG will have to do better than vague statements to convince clients that an awkward media marriage is worth the fuss.
Vietnam beckons the brands which dare
Ten years ago, the average Saigonite would be lucky to have the money to buy a square meal. Today, in the city reincarnated as Ho Chi Minh City, there are enough locals eyeing fancy shoes and overpriced luggage to inspire Gucci and Louis Vuitton to set up shop there.
It’s an important moment for marketing in Vietnam, as two of the world’s most desirable designer labels show confidence in the country’s thirst for luxury.
It’s visible evidence of the emergence of a Vietnamese middle class. And it’s a signal to marketers and agencies that it is the time for brands beyond toothpaste and mobile phones to be thinking about Southeast Asia’s most exciting market.
