Last week, a brief was couriered to the bigwigs of the industry, reportedly including Group M, Omnicom and IPG, asking for proposals to cover Asia-Pacific, China and India.
But industry veterans may be forgiven for scratching their heads — didn’t Sony just hold a regional pitch? Well, sort of. Sony earlier aligned with the Publicis media agencies — Starcom and Zenith-Optimedia, along with long-term partner Dentsu.
The thinking then, according to one source, was that Sony would get the benefits of consolidation, and still be able to choose between three distinct media agency brands.
Because of the nature of a network alignment, local Sony offices have remained fairly autonomous. For instance, local marketers can pitch projects between the three agencies.
As a result, most of the work in Singapore goes to Starcom, Malaysia to Zenith, Indonesia to Dentsu, Hong Kong to Zenith, and so forth. In fact one reason it has taken so long for the current pitch to take place, according to sources, is headlong resistance from Sony’s local marketers.
“Local offices have undoubtedly benefited from the local relationship, but this has not been obvious at a regional level,” says an agency executive close to the account.
So why would the Japanese brand, hardly one to ruffle feathers, want to disrupt such local relationships? More control over China and India, says a source, where Sony’s low profile has allowed cheaper local brands to flourish. “Sony says it’s a regional pitch, but you know the focus will be on China and India. It wants to control those markets better,” says another media executive. “Its local offices will be pushed aside.”
Another source says the singular alignment will give Sony a badly-needed, cohesive strategy. “It struggles to concentrate on one thing. Plasmas, computers, PS3? Centralising can give the brand the single-minded strategy it needs,” he observes.
But not everyone is a fan of the Sony review. “It doesn’t make sense to me, since individual Sony markets launch different products at different times,” says the manager of one media agency. “I can only think of one reason: aggregated lower rates.”
By consolidating media spend under one roof, Sony will likely enjoy greater combined discounts off its media buys, although local P&Ls might not see such direct benefits. “Sony is very efficient when it comes to media spend,” says the source. “It counts every dollar and cent.”
This is compatible with Sony’s media structure in Japan, where most of the work goes to Sony-owned agency, Frontage. “Indirectly, Sony still profits,” says another industry insider, but Aprais CEO Reg Moses is not convinced. “It might be cheaper to put all planning under one roof, but given all the individual market complexities, it’s asking for a bit much.”
If all this sounds too familiar, it’s because Sony’s closest rival, Samsung, is largely centralised. The Korean chaebol works with MindShare around the world, although consolidation has been gradual since Group M landed the business in 2005, says MindShare regional managing partner Jon Chadwick.
“From a cost point-of-view, the regional alignment has been beneficial,” says Chadwick. “It has helped Samsung synergise communications planning and drive local efficiencies.”
