The huge level of PR agency acquisition across Asia in last few years is not a threat to the region’s independent market, said a top-level executive at the world’s largest network of independent PR firms.
Jean-Leopold Schuybroek, chair of global development at the Public Relations Organisation International, said M&A activity is undoubtedly high in Asia, with several large networks rapidly expanding their empires through buying local outfits.
But, he added, this is not a new thing.
"What’s happening in Asia is what happened in Europe 20 years ago and probably in the US and UK 40 years ago, except it’s going much faster. So acquisition is something we’ve seen before and it’s logical," he told PRWeek Asia.
"If you look at markets like Japan, Korea, India, Hong Kong and Malaysia, the largest firms are still independent. But the fact that very large groups are growing by acquisition has always been the case."
On a mission to recruit more partners in Asia to PROI, Schuybroek said a lot of international firms have affiliations in several Southeast Asian markets, rather than equity in local agencies.
He also conceded that the plans of some independent firms in Asia that set up with the main ambition of being acquired by a large network is "going to continue to happen".
"Acquisition will continue, because for international firms to grow, it’s easy.
And I must say for independents it’s also a very good exit solution in terms of getting value out of your company," he said.
"So independents are definitely helping international firms to grow, but at the same time new independents are coming up. So it’s not that they’re disappearing."
PROI entered Asia just over a decade ago. It has 12 partners in the region, including Adfactors in India, SPRG in China and PRAP in Japan.
Schuybroek said the network is keen to build its presence in Southeast Asia, and is particularly looking for partners in Malaysia, Indonesia and Thailand. It is already partnered with Huntington Communications in Singapore.
The network also has its eye on emerging markets such as Cambodia and Myanmar.
"We came five or six years ago and didn’t find partners we thought would be the right fit for us. But we’ve seen quite a change since then, and are starting to see new firms adapting to change. It’s really interesting."
Schuybroek said the time is ripe for independent agencies to set up in Asia, with so much room for creativity and developing in the right manner as a consultancy, rather than a traditional PR agency.
"Asia is very innovative because there is no legacy. You can start from a blank sheet, and that’s a real opportunity. But it’s very important not to miss it," he said.
"You have to adapt your agency, bring in the right young people who can do that, bring in other types of talent. I’ve seen agencies that are fantastic, and others that were really old-fashioned. But this is a time to start agencies; it’s a turning point."