Lowe counts on core clients for rebound

Is Lowe on its last legs? Whisper it softly, but that is the question making the rounds as the Interpublic network downsizes its Hong Kong office after being stripped of a sizeable chunk of the revenue from the US$600 million global HSBC account in May this year (Media, June 18). Other events over the past year have done little to improve this perception. The agency lost the $70 million global Braun business after deciding not to repitch, and also saw Verizon Wireless depart, to the tune of $140 million. Add to that the continuing carve-up of Unilever projects in favour of BBH -- and it is easy to see why Lowe increasingly finds itself on the defensive. For Lowe regional president Nigel Gilbert, however, there is little cause for pessimism regarding the agency's Asian outlook. Rather, he believes that a sense of perspective is sorely needed in this situation. "The size of the HSBC business for Lowe was less than five per cent of Asia-Pacific revenue," asserts Gilbert. "Where it has strong implications are in Hong Kong, because Hong Kong is a regional hub and the agency was heavily reliant on HSBC as a business." Given this predicament, the agency has moved to integrate Hong Kong into a reconfigured Greater China offering. Much of Lowe's growth over the last year revolves around this region, where it has won new business from Interbrew, Ping An Insurance and Coca- Cola's Nestea. Other positives come from the agency's continued strong showing in Thailand and Indonesia, markets where Lowe comfortably assumes top-tier status thanks to Unilever business. In India, meanwhile, Lowe has traditionally been one of the most high-profile agencies, credited with creating brands like Liril soap, Surf, Pepsodent and making a previously unheard of company, the Korean electronics good major LG, a household name in the country. The Indian operation also, importantly, appears to have survived a recent rough patch, which saw it lose the LG and Sony Ericsson accounts, along with a large number of staffers across functions at its Delhi office -- including agency chief Santosh Kumar Sood. Lowe India quickly responded to the losses by hiring Mohit Beotra from Airtel as vice-president of the office and Anil Thakraney, former editor of advertising magazine, The Brief, as its creative director in Delhi. The turnaround appears to be well underway, spearheaded by account gains like ACC cement, Tata tea, BPCL and Polaris Software, and highly visible campaigns for Dabur and VIP luggage. Scratch the surface, however, and a regional picture emerges of an agency that is still struggling to deliver on the promise of the 1999 merger between itself and Lintas. Rather than creating a global heavyweight that could go up against the McCanns and J. Walter Thompson's of this world, the merger has instead spawned a kind of schizophrenia, where Lowe is scintillating in one market, and mediocre in the next. Gilbert believes that the real challenge lies in effectively communicating Lowe's superior creative capabilities to the right audience, and points to the agency's acclaimed HSBC work as a key example of this. "The work we have done on HSBC in Asia is quite significant -- a disproportion of this work did evolve from this part of the world," he notes. Accordingly, Gilbert has been meeting with the region's creative directors to improve the agency's creative reputation. In addition, the agency is also developing a new process -- entitled 'the big idea generator' as "a way of codifying our behaviour in terms of developing big ideas", in Gilbert's words. Few appear to believe, furthermore, that Lowe is in any immediate danger, given its strong core client trio of Unilever, Johnson & Johnson and Nestlé. "They need to stay true to their essence of being a creative boutique and, if necessary, turn away the wrong sort of business," says R3 Asia-Pacific principal Greg Paull. Additional reporting by Ravi Balakrishnan in Mumbai.