Asia Head: Scott Kronick, Regional President and Asia-Pacific CEO
Asia Offices: 30 wholly owned
Asia Revenue: US$125 million
Asia Headcount: 1,300
In 2013, Asia became the largest region for Ogilvy PR globally—in terms of revenue, profit and headcount. "Probably for clients too," says Scott Kronick, regional president and Asia-Pacific CEO. He also says 2014 built on that success, posting single-digit growth over the previous year. The agency doesn’t disclose exact revenue but the range in Asia was roughly the same as for the US, which Ogilvy says falls between US$100 and $125 million in both regions.
Kronick reports clients were steady for Ogilvy in Asia this year, but the big issue the company faced was an operational one. A major leadership transition took place and he credits a smooth handover as key to maintaining account wins and retention.
At the start of 2014, Kronick stepped in as CEO and president of Asia-Pacific after the succession of Christopher Graves taking up the global chairman role and Steve Dahllof retiring from the agency. Kronick has been in Asia for over 23 years and spearheaded the firm’s foray into China. Even back then, he said, the strength of the network was vital to how he grew the business. Ogilvy’s advertising network was already in China when he brought the PR arm in and that support was an advantage because he could "start getting new business from day one". Similarly, he was pleased the recent transition allowed staff to focus on work and not worry about jobs.
In terms of business Kronick says the technology sector is a perennial source in Asia. But for the past year he highlights healthcare, corporate reputation management and public affairs (particularly in China) as major drivers. China has stepped up anti-trust efforts, which has opened more opportunities to help firms navigate the legal and public image issues related to stricter rules.
Another somewhat unique issue to China is the luxury sector, which remains under pressure as the government continues to crack down on corruption and related gifting. But Kronick reports the dynamic is much worse for ad agencies than for PR firms. He says there is pull back in ad spending but the PR market for high-end brands is still healthy. He attributes that to greater reliance on social media and event marketing rather than traditional ad buys.
While China’s scale makes for easy headlines, there’s still considerable activity for Ogilvy outside the Great Wall. "Indonesia is a huge market for us, an impressive growth story," says Kronick, pointing to "high single-digit growth" that puts the market among the strongest in the network.
The agency added Misty Maitimoe, as deputy MD for Indonesia (coming over from Edelman and its sub brands) to assist the firm’s managing director, Marianne Admardatine. Another key hire was Judica Nababan as general manager.
Indonesia Port Corporation (IPC) is a major account in the market, which has ramped up business in line with the country’s overall economic growth. The agency helped IPC make a case to the public and the government to build a new port extension that is reportedly one of the largest infrastructure projects in Indonesian history, costing billions of dollars and covering over 200 hectares of land.
Other notable APAC account wins for Ogilvy over the past year include Netflix, Johnson & Johnson, Hermès, Cotton Council, and Hawaiian Airlines.
Among losses Kronick lists BSH Home Appliances and GSK. Swarovski also goes down as a partial loss since the agency only retains business in China.
For longer-term APAC clients, Kronick says the agency wants to put emphasis on quality over quantity. Mentioning names such as Intel, IBM, Ford and Mary Kay, he stresses a focus on key accounts where Ogilvy staff will spend as much as half their time at client sites. He characterizes the approach as integral to retaining important (profitable) clients. While he believes it is his remit to create a good working atmosphere in Ogilvy’s own offices, he also puts considerable emphasis on links with clients.
"PR is the science of influencing decisions and modifying behavior," he says talking about how earned influence is part of the reason PR, as an industry, does well in Asia. The issue he sees with advertising is it tends to be a one-way relationship, or not a relationship at all. But with content and social media, there is an element of shareability that plays a central role in PR-led campaigns. And it’s that aspect that he says gives PR an advantage in adapting to digital disruption. From his point of view, digital means more opportunity than interference.
As a broad picture, Kronick also points to more CMOs, rather than heads of communications, seeking out PR partners. It is a real trend he sees happening every day in Asia. "That is pushing our growth," he insists. Social media plays a starring role in that story, specifically because of the type of earned influence it represents. "Successful PR firms in Asia," he says, "are all strong on social." Somewhat illustrative of his point is the fact that the global head of Social@Ogilvy, Thomas Crampton, sits in Hong Kong not New York.
"There is a bit of a mash up going on across disciplines," Kronick says of PR’s shift to a more digital stance. He cites a need to "create engaging content with a purpose".
In APAC, Ogilvy has developed content teams that have the ex-journalists and former copywriters you might expect to find, but there are also people with video-production, healthcare, tech or other industry backgrounds. Building subject-matter expertise is a focus Kronick emphasizes for Asia, saying brands need content that speaks to specific audiences with authenticity and authority. Data analysis is another area he is concentrating on building, to help content creators better understand their work’s traction as well as learn what topics are trending.
The overall aim is to produce the ‘relevance’ brands want. And Kronick believes PR, as a discipline, is best suited to do that.