Theoretically, McCann has been performing well in terms of new business, even without a new global or regional business win to speak of in the past year. Its Worldgroup model has rolled out in key markets, presenting clients with a strong integrated offer. Major creative hires, meanwhile, have come on board in Thailand following the tapping of highly-respected Thai creative Jureeporn Thaidumrong to oversee local creative output. India and Australia, too, have been performing well both in terms of new business and creativity.
But while Einhorn made strategy a focus for the agency, and must rightly be credited with the introduction of proprietary methodologies and accountability measures that work across all marketing communications disciplines, key challenges haven’t gone unnoticed.
China, for one, remains a burning issue, more so after Coca-Cola walked at the end of last year — along with the agency’s talent — to house its business under the Red Lounge creation.
Meanwhile, the network has, on a whole, developed an unhealthy reliance on its Japan and Australia operations. So much so that, in 2006, while it pulled in more than US$17 million in new business revenue from 14 countries, over 60 per cent of the wins were from the two markets.
To his credit, John Dooner has been quick to recognise the weak links in McCann’s armour and his appointment of Kevin Ramsey is, appropriately, more than just a stop-gap measure.
Ramsey has impressive credentials. The Japan operation under his guard has been established as one of the largest individual Western agencies in Asia, with 825 staff and an expected six per cent hike in capitalised billings. Who can argue with figures like that in a market starved of growth?
Moreover, Ramsey is reputed to be a strong, apolitical leader who has, during his career, successfully pulled regional teams together at two key networks — M&C Saatchi and JWT. He reinvigorated the latter into a passionate, forward-thrusting organisation — one that took home Media’s Agency of the Year award in 2002 — after it lost its way in the late ’90s. Ramsey’s arrival in the regional hot seat at what is perhaps Asia’s most institutionalised agency is likely to be lifting morale internally. The pressure now will be to ensure that the network’s growth momentum from performing offices isn’t squandered and key talent unreasonably stretched across demanding operational and management roles.
V&S Group’s joint-venture with Jiannanchun makes it the fourth major international company to invest in China’s lucrative baijiu (Chinese spirits) market — the largest spirits category in the world.
Diageo, LVMH and Camus have all joined the category in one form or another, with a Thai Beverage Group deal also on the cards.
But what makes V&S’ strategy interesting is the Absolut vodka brand owner’s decision to focus primarily on marketing and sales, leaving production to its Chinese partner.
V&S’ success with Absolut should hold it in good stead. Rival brands, however, have been investing heavily in advertising — WuliangYe, for instance, forks out US$140 million annually. The challenge for V&S now will be to find the right agency partner to turn its brands into national players in the premium market — and, of course, to give it the firepower necessary to battle dominant competitors such as MaoTai in mainland China.
