After growing revenues at a double-digit or mid-to-high single-digit clip globally for several years now, it’s getting progressively harder for Weber Shandwick to keep up those rates.
The outlook still looks good, particularly in Europe and Asia, CEO Andy Polansky told Campaign at a meeting earlier this summer in Cannes, but it’s not as robust as recent years.
On the one hand, Weber’s business is more well-rounded, as communications work has been opening up to more social, digital and content marketing campaigns led by senior marketers. “It’s clear we’re in a broader consideration set now,” Polansky said. “We often compete with advertising agencies, digital firms, social firms and that‘s a terrific development because we’re in conversations we were never in before.”
Meanwhile, on the corporate PR side, large companies are seeking PR counsel to deal with all the vulnerabilities from an increasingly unpredictable geopolitical outlook, following Brexit, and the US election last year.
But that’s a double-edged sword, admits Polansky, who sees the growth slowdown coming from a combination of macroeconomic and geopolitical factors that are affecting markets like the US.
“With uncertainly to you sometimes have slower decision making and some paralysis," he said. "Especially in a business like public relations, where a certain percentage is project oriented,” he said. “So major marketers are pulling back a bit or moving a little more slowly.”
Growth in Asia
Weber is hoping to make up for slower business in regions like the US and Latin America by stepping up opportunities in Asia. Here Weber has performed well across the board, anchored by mature markets in Hong Kong and Singapore, with steps taken to improve performance in growth regions like India.
Despite China’s well documented economic slowdown, it’s a key growth region the PR firm expects will deliver again this year. A key factor in mainland China has been the rise of local clients who used to form less than 10 percent of Weber’s client base there three years ago but now make up more than a quarter of it. “We believe that trend will continue and grow appreciatively over the next few years,” Polansky said.
But no single market holds the key to Asian expansion. The opportunity that gets Polansky most excited is sectoral.
“I think we have an opportunity to really grow our healthcare business over the next couple of years… across the Asia-Pacific region,” said Polansky. “That’s a high priority for Weber Shandwick.”
To good health
This shouldn’t be surprising. Healthcare has been Weber’s fastest-growing practice globally. The agency's client work for GlaxoSmithKline, for example, includes not just PR but also other duties including lead creative projects.
At Cannes this year, Weber took home its second Lion (again a bronze) in as many years for GSK Consumer Healthcare in the health and wellness category for the painkiller Excedrin. Weber also took home two silver Lions in the glass and PR categories for its “Brutal Cut” campaign with ActionAid raising awareness about the stark health risks and dangers around female genital mutilation in Kenya. So their health and wellness campaigns are earning some of the strongest recognition.
On the business side in Asia, the healthcare practice enjoyed double-digit growth last year, helped by a solid mix of prescription pharma, food and nutrition, consumer healthcare, vaccines and medical devices.
Stephanie Yu, Weber’s Asia-Pacific SVP for healthcare says about 35 percent of the agency's work regionally involves medical education and communications, while the remainder is divided up between corporate health (industry relations and reputation), health services (hospitals and semi-government agencies) and consumer/patient facing work.
Yu says Weber is moving beyond work as a PR vendor offering tactical support. Increasingly, its working on business solutions in more of a consultancy role on everything from growing client categories to building product awareness.
Healthcare firms haven’t been as active in digital media as they potentially could be, which may also be why there is more work to be done now. “The healthcare industry was probably a little behind in comparison to other industries when it came to deploying a digital and social approach in communications due to the regulations and non-branded aspect of communications that don’t always get buy-in by the marketing team in recognizing ROI,” Yu said. “However the sector is catching up fast.”
Key APAC health markets for Weber have been Australia, China, Japan and Singapore, the last being a hub for multi-market work across Southeast Asia. Less developed markets can’t be overlooked since there’s been more work being done for non-profits and NGOs who active there.
“India, Malaysia, and Indonesia are three emerging growing markets for us where there are a lot more corporate, public affairs and consumer education campaigns taking place,” says Yu.
But it’s Korea that Polansky also singled out as an emerging market leader. Robert Broad and Windcy Chan, both healthcare SVPs at Weber Shandwick Hong Kong, say Korea is real opportunity for growth due to very specific regulatory compliance issues in such a mature market.
While heavy regulation will always remain a factor when working in the healthcare space, it creates opportunities for agencies with expertise in helping pharma and consumer companies navigate the rules and requirements. But knowing the local rulebooks isn’t enough to win new business. Broad and Chan say the regulations are fairly uniform across the region but cultural and local intelligence is just as crucial if not moreso.
“Local unmet needs, landscape and cultural nuances are equally important” agrees Yu.
Given Polansky’s priorities for Weber, one can bet that any unmet health opportunities across the region will soon be given a closer look.