BANGKOK: Thailand's Advertising Association has asked the
Government to clarify a directive which foreign agencies believe will
restrict their business development attempts in the market.
The issue stems from an offcial April memo from Prime Minister Thaksin
Shinawatra's office instructing state enterprises to hire Thai
consultants instead of foreign firms as part of a cost-cutting
drive.
That same month, the Tourism Authority of Thailand switched its domestic
account from Leo Burnett to Creative Juice (media, May 11), a small
local agency. Also in April, the Board of Investment postponed signing a
deal with Ogilvy & Mather for PR services.
Parames Pachjaibun, president of Thailand's Advertising Association and
co-chairman of Dentsu Young and Rubicam, has asked for a clarification
of the term "foreign consultant". Parames believes the term does not
accurately describe the advertising industry: "We are not consultants.
Ad agencies are registered with the Government as providing services,
mainly the buying and selling of media."
While no response had been received at media's press time, Parames noted
that the Secretariat of the Prime Minister's office had informally
stated that the Government was only suggesting that Thai consultancies
be given equal opportunity to bid for government contracts.
Multinational agencies had earlier expressed concern at the directive's
implications. Of the 15 leading agencies operating in Thailand, only two
are local. One of the two, SC Matchbox, is partly owned by the
Shinawatra family - a situation with implications not lost on more
cynical observers.
Nevertheless, there is a feeling that the issue could soon be
resolved.
Leo Burnett Asia regional managing director, Richard Pinder, said he is
giving the Thai Government the benefit of the doubt. He said his agency
never associated the loss of the domestic Thai tourism account with the
directive.
"Of course, there was a degree of concern that there may have been a
connection, but our take on the account change is that it's now water
under the bridge and instead we're looking to the future," he said.
Burnett's still holds the tourism authority's international account.
The issue seems to be cooling down, but the thought of a possible bias
against multinationals has rankled the industry.
"The image of the greedy foreign agency repatriating its profits back
home is fallacious," Pinder argued. "This year, Burnett is investing
more capital in Thailand than it will take out. There is a net inflow of
capital into Thailand."
And the idea of Thai or non-Thai agencies is false, he added, pointing
out that all senior management, bar one, at Burnett's Bangkok office are
Thais.
According to the Bangkok Post, only 30 of the industry's 2,200 employees
are foreigners.
