Viewpoint: WPP demonstrates regional strengths

Where most global reviews tend to downplay, if not discount, Asia's role, the HSBC pitch was unique in that Asia appears to have had a disproportionately loud voice. As such, the pitch played to WPP's strengths, because the group has a far more compelling through-the-line service offer in Asia-Pacific than Omnicom and, to a lesser extent, Interpublic Group, its key rivals in the review. Indeed, WPP's regional hand appears to have been boosted by its purchase of HSBC's incumbent of 40-plus years, Bates and its 141 subsidiary.

More significantly, WPP also appears to have convinced HSBC that client conflicts can be managed. How else can we explain its ability to scoop the business while its agencies also handle American Express, Citibank and Merrill Lynch? Provided none of these companies walk in the coming months, it would be safe to say that WPP may have mastered the art of conflict management.

Meanwhile, the loss of HSBC could not have come at a worse time for the embattled IPG, which recently reported that its first quarter loss had doubled from US$8.6 million last year to $16.9 million, despite a six per cent revenue hike.

Naturally, Wall Street has pounced on the future of IPG's third network Lowe, which extended its 1999 HSBC UK win to Asia and the US. Will Lowe survive the body blow? Lowe executives insist the loss is minor, a point echoed in the New York Times, which estimated it at 2.5 per cent of the agency's global revenues. While that may be the case globally, sources believe the loss will nevertheless be keenly felt in Asia. By some estimates, the shift could cost Lowe a third of its regional business at a time when Sony Ericsson in India, Ikea in Singapore and Ricoh in Australia have also walked. The question now is whether Lowe will be able to parlay its early success in strengthening its China operation, with the Interbrew win, to the rest of Asia to plug the HSBC gap.

Globally, Lowe's fortunes have been equally mixed. With HSBC's exit, Lowe has basically lost all four of its large clients - Braun, Verizon Wireless and Vodafone - which had called for reviews in recent months.

At the same time, the departure of three key execs, including US CEO Tom Bernadin and Paul Hammersley, early this year, clearly did little to inspire HSBC's confidence. The appointment of Mark Goldstein as global chief marketing officer is a first step towards beefing up its client roster, which has seen the addition of new Unilever briefs, Nestle, Johnson & Johnson and Hyundai. But the fact remains: the task of proving Lowe's viability - amid mounting losses at its parent group - just got a lot more difficult.