GLOBAL RANKINGS: Asia - The Asian PR scene has been hit badly bythe US economic slowdown, but China is emerging as the new center of PRpower

The year 2000 will be remembered by the Asian PR industry as the

moment when global firms realized 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 hi-tech, investor relations and brand marketing to service

the flourishing dot-com sector. As Burson-Marsteller's 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

layoffs in Singapore in May, it was the first tangible sign that the

economic decline in the US would have a direct impact on the


The US influence

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

fueled 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 powerhouse.

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,

SVP and regional director at Fleishman-Hillard until earlier this month

(she's now 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 chiefs.

"The firms that were hurt most were those disproportionately reliant on

US technology companies for their profitability," explains Matthew

Anderson, president of Ogilvy Public Relations Asia Pacific. "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, chairman of GCI Group Asia Pacific.

One of the ongoing challenges facing agencies with Asian ambitions is

the small domestic market. Alison Clarke, CEO Asia Pacific of Weber

Shandwick Worldwide, agrees. "Asia is still cheap and cheerful," she

says. "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."

New century, new gains

Last year saw a changing of the guard. The global merger between Weber

Public Relations and Shandwick at the end of last year made Weber

Shandwick Worldwide the biggest player in Asia - with revenues exceeding

$23 million, $9 million of which was generated in


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 $90 million in Greater China and

Southeast Asia (China, Hong Kong, Korea, Indonesia, Malaysia, Singapore,

Taiwan, Thailand and the Philippines). Their total average growth

reached a staggering 28%, with only Edelman and Hill & Knowlton

reporting negative growth.

Burson became the first agency in this region to break the $15

million mark.

Financial success wasn't limited to the big 10, either. US tech

specialist The Hoffman Agency reported revenues of $1,408,197 in

2000, up 163% 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 hi-tech agency, showed significant

growth in its locations in Hong Kong and Singapore, claiming a regional

revenue of $680,680, up 955%.

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. Burson 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 Burson's Rylance. "As a result, we grew across the


Burson's cause was helped by several huge wins the year before that were

billed in 2000, including the $5 million contract for Inchon

Airport in Korea and a government brief worth $1.2 million to

rebrand Hong Kong.

The only other significant new account was regional client 3Com, says

Rylance, with Burson focusing much of its effort on growing its business

with existing clients Philip Morris, Qualcomm, Unilever and Intel.

Weber Shandwick Worldwide was no slouch either, beating average income

growth with a strong 34%. 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 Kong.

The reasons are clear. Foreign multinationals are lining up to profit

from 1.3 billion consumers in China's increasingly liberal economy.

Burson's operations in Beijing, Shanghai and Guangzhou made more than

$4.5 million 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 Burson'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 says.

The hopes pinned on China's entry to the World Trade Organization 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% 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 Ogilvy's Anderson. Clearly, a geographical trend will be a

focus on north Asian markets in the coming year.

Korea and Southeast Asia

Significant acquisition's have taken place in Korea. In April,

Fleishman-Hillard 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 Southeast 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 she 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 last 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 $42.5 million Indian PR industry was galloping ahead at 30%


But things went awry last year. With the domestic stock exchange

mimicking the Nasdaq - along with profit warnings from the likes of 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


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

$1.5 million, Indian PR is still at a nascent stage. It 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.



2000 2000 1999 CHANGE

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 public relations 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.

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