Agencies exploit Eastern promise

Daniel Rogers spoke to an upbeat Sir Martin Sorrell at last week's PRCA annual conference, where the WPP CEO made bullish predictions about growth in Asia. His optimism is shared here by leading PR practitioners

Few figures in British business can claim to command the respect and influence of Sir Martin Sorrell. His views are often regarded as a bellwether for the entire marcoms industry.

PRWeek managed to snatch ten minutes of the WPP chief executive's time at the PRCA's annual conference last Wednesday, where he was on fine form.

‘The things that keep me awake at night are the internet and China,' he said. Indeed, it is the growth of business in Asia that preoccupies him the most.

WPP's business is roughly divided thus: 40 per cent North America; 40 per cent western Europe; ten per cent eastern Europe; ten per cent Asia. Sorrell said the plan was for 33 per cent each from North America, Europe and Asia.

‘By 2014, two-thirds of the world's population will live in Asia. The professional class is a small percentage of these societies, but there are still 150-200 million people in Asia who are interested in our services', Sorrell said.

‘Apart from that, their economies are dynamic, growing at eight to ten per cent a year, compared with one to two per cent in Europe. There is also little regulation in Asia, making it far easier to expand,' he added.

WPP's PR businesses include Hill & Knowlton, Burson-Marsteller, Finsbury, Ogilvy PR Worldwide and Cohn & Wolfe. On the changing power of global business, Sorrell argued: ‘We were never truly globalised; rather, we were Americanised. But a massive shift in influence is taking place from West to East. We're seeing the reverse of a 200-year economic cycle.

‘Where once the big clients all came from North America - General Motors, Microsoft and so on - increasingly they will come from Asia, such as Korean industrial firms, Indian software companies and Chinese computer manufacturers. Three or four of WPP's top-performing agencies are based in Asia, and this number will grow quickly.'

Sorrell claimed that by the time the Beijing Olympics are held in 2008, China will have surpassed neighbouring Japan as the world's second-biggest advertising market.

‘The trouble with the Chinese is that they listen! They are learning quickly and western businesses will have to work hard to retain leadership.'

CHARLES WATSON, group CEO, Financial Dynamics
‘The sustainability of Asia's growth depends as much on the region's ability to access capital as on the economics of supply and demand. Across the region, hundreds of corporate entities seek to present the attractions of their businesses to the international investment community, in turn offering the financial comms industry one of its most exciting opportunities in years.

‘Since Financial Dynamics opened for business in Hong Kong last year, we have been overwhelmed with the opportunities. The Chinese IPO market is the most active in the world, with another $100bn of state-owned assets alone predicted to list on stock markets in the near term.

‘Our biggest challenge is finding the people to build our business across the region. For us, the top-tier Chinese universities are proving an excellent source of entry-level talent. If we can develop this resource into the new generation of comms leadership, I am confident that the scale of FD's Asian presence will have multiplied in the not-too-distant future.'

ALAN VanderMolen, president, Asia-Pacific, Edelman
‘With China and India joining the World Trade Organisation and Japan's economy back on track, Asia has recovered from the financial crisis of the late 1990s and the more recent regional Sars scare. We are now seeing record highs in foreign direct investment in the region and record outflows of capital from markets globally expanding into the US and western Europe.

‘Our business has doubled during the past three years and we predict another tripling of it over the next four years. One of the major drivers of our business is the rise of peer-to-peer communication via the internet and other social media. As trust in traditional media declines in the region, companies are looking for ways to use web-based channels to manage relationships.

‘The challenges, as ever in professional services, are people-focused. We need to retrain and recruit global managers based in the key markets of the region if we are to meet our aspirations for growth, and to provide clients with strategies and campaigns that help their business.'

WILL LUDLAM, regional director in Asia, Porter Novelli
‘If there's one universal point of agreement, it's that Asia is not only a hot market, it's the dominant economic engine for the foreseeable future.

‘In China in particular, the explosion of the middle class and increasing political clout means you have to understand the behaviour of local stakeholders.

‘You can't look at this as one simple market: China has 23 cities with more than a million residents. What plays in Shanghai does not always work in Xian. This is something you can't crack from the surface. Porter Novelli's strategy in Asia is simple: incorporate the brightest local talent; steep the agency in understanding of the market; and help clients make smart choices that have a measurable impact.

‘Success in Asia is driven more by making the right series of moves than by being the first to make them. We're working to ensure clients are focused, deliberate and educated in their approach.'

ANDY POLANSKY, president, Weber Shandwick Worldwide
‘Weber Shandwick continues to invest heavily in the Asia-Pacific region, particularly in China where we have more than 110 people across three offices. We're seeing keen interest in consumer marketing, and corporate and public affairs.

‘While US and European multinationals are driving growth today, we have a close eye on Chinese companies likely to emerge on a global stage leading up to and following the 2008 Olympics.

‘Given all the focus on China and India, it seems almost counter-intuitive to consider Japan. But there is a strong economy there, coupled with a heritage of bringing innovative products to market.

‘In fact, marketers are interested in the whole region. Hong Kong and Singapore, for instance, remain important hubs. Meanwhile, the market for talent is ultra-competitive, so global agencies can get the edge by offering staff international transfers and exchanges.'

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