PRWeek Top Consultancies 2020: Strong year for APAC as region shows innovation and resilience

The comms industry in Asia-Pacific enjoyed an outstanding 2019 despite economic uncertainties, intensified pressure on fees and increasing competition with non-PR agencies.

Today, we reveal PRWeek’s APAC Agency Business Report, a ranking of the top-earning agencies in the calendar year of 2019. It might seem ill-fitting to speak about economic growth at a time where a pandemic has ravaged the industry, stripping jobs and affecting livelihoods. But hopefully, we are able to objectively look at this as an opportunity to recognise 2019 as a shining year. A result of agencies remaining relevant with increasingly clever, shifting offerings. 

A quick glance at the league will tell you that last year was a strong year for the region; a pre-coronavirus era of hope and emerging talent. In fact, save for two, all 30 agencies we surveyed showed growth while 16 of them recorded double-digit growth.

Ogilvy, which came in second place this year after Japanese powerhouse Vector, recorded an estimated nine per cent jump to reach US$163.5 million. In 2017, the agency consolidated all its services under one P&L; and it’s likely that this One Ogilvy integrated model—which brings together core capabilities such as brand strategy, advertising, customer engagement and commerce, PR and influence, digital transformation, and partnerships—has so far proven successful in APAC.

However, globally, Ogilvy PR slipped by -23 per cent. And of course, because of the integrated model, caveats apply when it comes to estimating Ogilvy PR’s earnings, as elaborated by PRWeek’s US editor Steve Barrett.

Despite challenges in mainland and Greater China owing to the Hong Kong protests and China-US trade war, Weber Shandwick recorded an estimated five per cent growth this year to come in third place overall. But increasing competition from non-PR agencies result in large agencies like Weber Shandwick going head-to-head with creative and digital agencies, effectively shrinking the slice of the pie for traditional PR players.

Weber Shandwick’s APAC CEO Baxter Jolly (pictured below) told PRWeek Asia said the trend for some time has been the disappearance of swim lanes in comms and marketing services in general. 

“This has been a great opportunity for us as we’ve moved into social media, creative and analytics projects with the CMO while continuing to evolve our core reputation offerings to the CCO. In short, we now have many more ways to add value to our clients,” he said.

Some of Weber Shandwick’s biggest areas of investment are purpose and cause marketing, insights and analytics, and media relations. “It’s clear that companies with purpose outperform their peers and indeed COVID-19 is proving that out. Increasingly our clients expect us to understand their business and deliver communications solutions based on deep insight. In fact, over the past two years, Weber Shandwick’s regional Insights team has grown to 85 strong. It’s certainly been a key driver for new business and deepening our client relationships,” said Jolly.

Media relations ranked fairly low for many large agencies, but on the contrary, remained a priority for Weber Shandwick. “Four years ago, we formalised the integrated media team. Media relations today means something different from what it did even three years ago. We continue to invest in earned media but also owned, social and even ecommerce so that we can have the right channel strategy for clients,” explained Jolly.

MSL too had a banner year with a strong five per cent growth compared to its -1 per cent downturn last year. Last year saw two major leadership additions: the highly capable Margaret Key (pictured below) as APAC CEO and Amit Misra as South Asia CEO with a primary focus on Sri Lanka and Bangladesh.

“Our fluency tool has been a differentiator and we want to continue to evolve the platform thus influencer engagement. Crisis and management as an offering and product is also an area that we want to further invest,” Key told PRWeek Asia.

Perhaps none have had as good a year as BCW—led by Matt Stafford, APAC president—which recorded as estimated 12 per cent jump and an accompanying 12 per cent spike in revenue per staff. Last year, the agency announced Jeffrey Yu and Cassandra Cheong as new Shanghai and Singapore market leaders respectively, and the year before, several regional market leaders were appointed by Stafford to strengthen its several China, Singapore and Japan offices. We’ll be keeping tabs the results of BCW Japan's merger with H+K and Ogilvy led by Tsuyoshi Takemura, as well as Genesis BCW's merger with Six Degrees in India his year, led by Prema Sagar. 

Taking the biggest fall this year is Zeno Group, which dropped by -14 per cent and also recorded a -19 per cent drop in headcount. It was a year of major leadership changes at Zeno with APAC CEO Margaret Key departing to head up MSL, and Allison+Partners alumni Paul Mottram stepping in to fill the role of APAC president. According to Mottram, 2019 marked a year of “transition and development” for the group. But key hires were also made in 2019, including Allanjit Singh as Singapore MD, David Lian to the newly created position of MD, growth and innovation, and Rekha Rao as India MD.

Mottram attributes last year’s dip in revenue to the Zeno Indonesia business, which is now managed and reports revenue under a different DJE Group model. Zeno also ambitiously set up two new offices last year (in Shanghai and Beijing).

“We continue to invest in China, having opened there in January 2019. Under the leadership of Ruby Fu, former CEO of Burson-Marsteller China, we’re now working with several global and local clients including ABB, Gensler, Greystar and Lenovo.  We’re very pleased with our progress,” Mottram told PRWeek Asia.

Fee pressures and managing the post-COVID19 slump

Overall, most agencies—including those that recorded double-digit growth—cited pressure on fees as the greatest agency challenge.

MSL’s Key said: “Pressure on fees is a challenge faced by all agencies as clients look towards greater in-house utilisation and procurement-led reviews.”

For Southeast Asian independent Vero (not related to Vero Communications in the UK), MD Brian Griffin said this pressure can be “standard” given the economic environment. 

“Our strategy to put Vero on a trajectory of growth and profitability is to be where the clients need us and to provide clients with the services and the team members who can make a positive impact for their brands,” Griffin told PRWeek Asia.

In 2019, Vero opened two wholly owned offices in Jakarta and Ho Chi Minh to complement its offices in Bangkok and Yangon.

“This aligns with our strategy strategy to be strong in the large, highly populated, demographically advantageous, and fast-growing ASEAN markets,” said Griffin. “In 2020, it is really about adding strength to modern service areas in which we anticipate the greatest demand and impact.  We are also in the process of making some slight adjustments in our 2020 plans by placing an even bigger focus on tech.”

Vero is in a unique position where the markets it operates in haven’t been severely devastated by COVID-19. “We believe that Asia, and Southeast Asia in particular, may be among the first to emerge from the depths of the COVID-19 slump because, so far, ASEAN countries are not being impacted as badly as other regions of the world,” he said.

“But there is no doubt that COVID-19 will change the way we think about our business. We have re-thought the way we use office space, and will adjust the way we use commercial real estate in our largest market.  But we are also ready to invest, particularly in technology, serving technology clients and acquiring data and insights that will support our technology clients.  Based on our own tech studies, we know that people in Southeast Asia have high expectations for technology to improve education, healthcare and business opportunities.”

Overall, the league showed that regional independent SMEs such as Vero, Critical Path, Creative Crest, Asia PR Werkz, and Mutant Communications have managed to grow rapidly by offering speciality services. However, many SMEs cite resources and over-servicing as a challenge.

For Ruder Finn, pressure on fees will only intensify in 2020 as clients are under immense revenue pressure, according to Charles Lankester (pictured above), EVP, global reputation & risk management.

“This will naturally impact marketing budgets, especially in the more mainstream traditional work such as media relations. Ruder Finn is not concerned by this as we will move into entirely different business areas—such as legal, HR, and sales—and navigate around traditional sources of income for our firm,” he said. The agency climbed four per cent to earn just under US$39 million last year.

Lankester added that COVID-19 will dictate Ruder Finn’s investment priorities, including an increased priority on integrated comms.

“Clients will be looking for both value and results post-COVID 19 and integrated comms will place Ruder Finn at the centre of our clients’ business performance. We can now track the revenue creation value of our work on national and regional campaigns to the RMB or dollar and we see a fast-growing demand for this service, hence our decision to make greater investment in this is 2020,” he said.

“We will be investing in talent outside traditional communications and seek to bring agile, creative, results-driven solutions for clients. Without question, being able to deliver vibrant digital work will be vital, but we also see demands for much broader services, from risk management through to executive presence.”

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