Staff Reporters
Oct 25, 2010

The AOR model comes under fire in Asia

A growing number of brands in Asia are opting to work with agencies on a project basis. But do the region’s marketers feel this is signalling the end of the agency-of-record relationship? We've asked five marketers.

Agency-client relationships
Agency-client relationships

Virginia Ng, marketing director, KFC, Singapore:

Agencies are an extension of the marketing department. They are not someone we can hire and fire at will.

They need to qualify to partner with us and we expect our agencies to have an understanding of us as a brand and work with us towards a common goal. 

Building such a relationship can’t be achieved on a project basis. It needs the time to grow and develop.

I for one am still an adherent to the old-fashioned agency-of-record type of relationship. 

Recently, we felt that we had not developed our social media offering and have liaised with GroupM for this purpose. However, for the bulk of our target area, we will work with Grey.

Amit Dasgupta, director sports performance, adidas, South East Asia:

We at Adidas believe there is value in AOR partnerships and do not reach out to agencies on an ad hoc basis. 

The reason for this is very simple: we brand build. 

It is therefore important to partner with an agency which understands us as a brand and the brand messages we wish to communicate. 

A project-based approach does not serve the long-term efficacy of a brand. I am of the belief that due to this very reason, the traditional agency-of-record will not go out of fashion for years to come.

Shawn WarrenVP marketing, Kraft Foods, Asia-Pacific:

No way. For Kraft Foods, we have strong AOR relationships and our agencies are critical partners that have helped to fuel accelerated growth on our brands like Oreo, Tang and Cadbury Dairy Milk.

I believe the best AORs have a long-term perspective on our brands, bring a world-class network of talent and knowledge to our business and are committed to understanding our consumers and unlocking local insights. 

The result: marketing efforts that deliver true business impact and accelerated growth. 

That’s what we’ve done together... and that’s what we’ll continue to do together.

Yee Wee, marketing director, Nokia, China, Japan and Korea:

I certainly don’t think so. But what has changed is that increasingly more marketers recognise good ideas aren’t easy to come by and when they do, they can come from many sources, and not necessarily from the AOR. 

Brands have to decide how best to optimise available resources to execute and bring ideas to life. I can appreciate why some brands consciously opt not to have an AOR and work with multiple agencies on a project basis. Sometimes this route fits the nature of their business and brand best.

But let’s not forget that with AORs, we can expect continuity and learnings across multiple projects to move the needle for brands in a more efficient and cost-effective manner.

Hélène Blanchette, go-to-market strategy mgr, Fuji Xerox, Asia-Pacific:

The agency model of the past will not be the business model of the future and this is not unique to agencies. 

There’s been a fragmentation of budgets into projects created by availability, capability and diversity of technology, coupled with the slow pace of strategy-shift from agencies. 

This has given smaller cells opportunities to grow their market-shares and demonstrate their talent, creating a new model. Today, the global ownership of agencies is concentrated in only a handful of giant companies who are more complex and slow to steer in a new direction. The market has seen many agencies themselves fragmenting their service offer to compete on a project basis in order to surf this wave.

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