The year 2000 will be remembered by the Asian PR industry as the
moment when global firms realised the opportunity to build specialist
practices in the region.
Buoyed by the new economy, all the large PR families - Omnicom,
Interpublic, True North and WPP - reaped sufficient reward to launch
practices in tech PR, investor relations and brand marketing to service
the flourishing dot.com sector. As Burson-Marsteller Asia- Pacific
president and CEO Bill Rylance recalls: 'It was a year of rising tide,
where any business that was managed well would rise with the tide.'
Of course, the boom could not last. When Fleishman-Hillard announced
staff cuts in Singapore in May, it was the first tangible sign that the
economic decline in the US would have a direct impact on the PR
Outside Japan, the Asian PR industry is dominated by US brands. The
boom of 2000 was led by mushrooming US hi-tech corporations, which in
turn fuelled Asia's own new-economy upturn.
Notably, Chinese companies such as Chinadotcom and Netease used global
PR agencies to run investor relations in the US, as they pursued Nasdaq
listings - early signs of the emergence of China as a global
But the influence of the US economy has been a double-edged sword.
While European markets have been able to stave off the worst effects of
the slowdown, Asia has suffered.
'Asian economies are still very dependent on the US,' says Pam Miracle,
Fleishman-Hillard SV-P and regional director, until earlier this month
(she has now located in Europe).
Since most of the global networks have grown from their international
client base, the effect of a US downturn is likely to affect those
agencies with a strong overseas client base, say regional PR
'The firms that were hurt most were those disproportionately reliant on
US technology companies for their profitability,' explains Matthew
Anderson, Ogilvy Public Relations Asia Pacific president.
'It's a crucial time to be selective because there are very significant
areas of opportunity in specialist areas.'
Ogilvy works with Mead Johnson, IBM and Tricon Restaurants (KFC and
Pizza Hut), but it has also won several major local clients this year,
including the Asia Pacific Economic Conference (APEC).
Winning locally-based clients has traditionally proved difficult in
markets where PR is an emerging discipline. 'PR is all too often seen
as discretionary spending in Asia and has been hit hard,' says Nicholas
Walters, GCI Group chairman (Asia Pacific).
One of the ongoing challenges facing agencies with Asian ambitions is
the small domestic market. Alison Clarke, Weber Shandwick Worldwide CEO
(Asia Pacific), agrees: 'Asia is still cheap and cheerful,' she
'Client prospects talk about wanting best practice but are never
prepared to put best-practice dollars behind it. That continues to be
the greatest hurdle in Asia,' she adds.
Last year saw a changing of the guard. The global merger between Weber
Public Relations and Shandwick at the end of last year made WSW the
biggest player in Asia - with revenues exceeding $23m, $9m of which was generated in Japan.
The Japanese market has undoubtedly been the hardest to penetrate for
global PR agencies, with Dentsu the largest among several
It's a different story outside Japan, where the Top 10 global agencies
claimed revenues of almost $90m in Greater China and South-East
Asia (China, Hong Kong, Korea, Indonesia, Malaysia, Singapore, Taiwan,
Thailand and The Philippines). Their total average growth reached a
staggering 28 per cent, with only Edelman and Hill & Knowlton reporting
B-M became the first agency in this region to break the $15m
Financial success wasn't limited to the major players, either. US tech
specialist The Hoffman Agency reported revenues of $1,408,197 in
2000, up 163 per cent for the year. This figure represents income from
four locations where the agency has wholly-owned operations: Beijing,
Hong Kong, Korea and Singapore.
Similarly, Text 100 - a UK-based tech agency - showed significant
growth in its locations in Hong Kong and Singapore, claiming a regional
revenue of $680,680, up 955 per cent.
In addition, Singapore-based Standfirst Communications reported audited
fee income of $445,000 for its offices in Singapore and
Malaysia. The company launched its Kuala Lumpur office last year and
virtually doubled its income in Singapore, from $230,000 in 1999
to $400,000 last year.
But such growth is not expected to be repeated this year. As the Top 10
agencies brace for a slowdown, the success stories will likely come
from those that are selective with clients and pursue the specialist
route, say regional PR chiefs. B-M is a good example. The agency
resigned its account with Chinadotcom last year as part of a plan to
reduce the number of relationships in Asia. Its only other significant
new-economy client is securities trading firm CASH online.
'We enhanced and deepened our relationships with existing clients
during the year,' explains Rylance. 'As a result, we grew across the
B-M's cause was helped by several huge wins the year before that were
billed in 2000, including the $5m contract for Inchon Airport in
Korea and a government brief worth $1.2m to rebrand Hong Kong.
The only other significant new account was regional client 3Com, says
Rylance, with B-M focusing much of its effort on growing its business
with existing clients Philip Morris, Qualcomm, Unilever and Intel.
WSW was no slouch either, beating average income growth with a strong
34 per cent. The integration of BSMG's Hong Kong operations
(Scotchbrook) will only strengthen its top position. But despite such
revenue gains, Clarke says WSW aims to beef up profits by building the
high-end, specialist parts of its business: 'We need improvements in
margin. I anticipate that will be our objective.'
Asia's market of greatest potential is China. For the first time this
year, three of the Top 10 agencies - Ogilvy, Edelman and GCI/APCO -
generated greater revenues in their China offices than in Hong
The reasons are clear. Foreign multinationals are lining up to profit
from 1.3 billion consumers in China's increasingly liberalised
B-M's operations in Beijing, Shanghai and Guangzhou made more than
$4.5m last year.
Investor relations and financial PR in the China market is expected to
be a major growth area this year, according to Ogilvy PR Beijing
managing director Scott Kronick.
Such developments appear to threaten Hong Kong's role as the region's
most important hub. But B-M's Rylance believes that while China poses a
great opportunity for PR, Hong Kong will remain a major market for the
region. 'China's gain is not necessarily Hong Kong's loss.
There are probably many complementary and related opportunities,' he
The hopes pinned on China's entry to the World Trade Organisation are
huge, but not everyone in PR thinks China's growth depends on it. 'WTO
could be a red herring,' says Clarke. 'It will clearly have an effect,
but (the delay in China's entry) isn't stopping many of the big
WSW has reported about 50 per cent growth year-on-year in China -
possibly the agency's best performance globally, according to Clarke.
Similar figures are reported among almost all the multinational
agencies in Beijing.
'In China, our public affairs and PR practices have had very good
years,' says Anderson. Clearly, a geographical trend will be a focus on
north Asian markets in the coming year.
Significant acquisitions have taken place in Korea. In April, F-H and
Brodeur acquired IT Korea and InComm, respectively; GCI signed an
affiliation agreement with Korea's Shinhwa in May; and Golin/Harris
acquired Aspect in Taiwan.
But South-East Asian markets, except for Singapore, remain relatively
unattractive to buyers. Since the financial crisis of 1997, the
much-needed structural reforms encouraged by the World Bank and other
international bodies have not been implemented. Together with
continuing political unrest and scandals among national leaders in
Thailand, the Philippines and Indonesia, the outlook for the region
looks poor in the short-term.
Agencies in India are also feeling the heat. Last year, Mahnaz
Curmally, Ogilvy's recently-promoted president of South Asia, wrapped
up a deal in a couple weeks. Now it takes anywhere from three to five
months. 'Today, clients will negotiate hard and delay their decisions
as long as they can,' she says.
So what's gone wrong? The past three years were a dream script for PR
in India. With the growing need for information, both clients and
agencies began to leverage the power of the spoken and written word,
finally giving PR the credibility it had been craving.
The $42.5m Indian PR industry was galloping ahead at 30 per cent
But things went awry last year. With the domestic stock exchange
mimicking the Nasdaq - along with profit warnings from the likes of
Amazon.com and even local tech majors like Infosys - India began
tightening its purse strings in the last quarter of 2000.
Competition is changing the face of PR in India. From barely 40 players
five years ago, the PR landscape is now littered with as many as 200
firms. While most of the leading agencies have outposts in the five
major metros - Mumbai, Bangalore, Delhi, Chennai and Kolkata - the
one-man outfits suffice on local clients.
While a handful of top agencies claim to have revenues approaching
$1.5m, Indian PR is still at a nascent stage. It is widely
agreed that to progress, the country has to tackle the issue of skilled
manpower. For most agencies, on-the-job learning is the norm. Even
Curmally admits that she tackles situations as they come along.
INTERNATIONAL AGENCIES OPERATING IN ASIA
Rank Agency Name Asia Income (USdollars)
00 00 99 % chg
1 Weber Shandwick Worldwide 23,479,849 18,883,912 24
2 Burson-Marsteller 21,762,000 15,462,000 41
3 Ogilvy Public Relations
Worldwide 16,236,300 13,070,000 24
4 Hill & Knowlton 14,199,000 19,426,000 -27
5 Fleishman-Hillard 10,923,000 7,922,000 38
6 Edelman Public Relations
Worldwide 9,935,285 10,389,814 -4
7 GCI Group/APCO Associates 6,661,762 5,906,406 13
8 Golin/Harris International 6,190,000 4,793,000 29
9 Manning Selvage & Lee 5,110,793 3,229,250 58
10 BSMG Worldwide 4,987,296 1,112,719 348
Source: PRWeek US Agency Rankings Note: This is a list of global PR
firms in Asia. It does not include Asian independents. We have not
included Incepta in this chart because it was not able to provide
sufficient information on its Asian operations