By the time the World Health Organisation travel advisory was lifted from Hong Kong, Sars had not only ravaged thousands of lives, but derailed the region's business community, and practically shut down neighbouring superpower China.
In addition, regional corporations have been guarding their own dented performance in the face of anti-US sentiment and boycotts to global brands like Coca-Cola in religiously sensitive markets such as Indonesia and the Philippines. These elements have translated into unrepentant and looming threats to corporate and brand security, and, inevitably, the PR industry has felt the blow.
Yet, among the fallout, the relevance of tailored practice areas addressing corporate concerns such as crisis and issues management and corporate social responsibility has come to the fore. The role of the communicator as a senior-level manager of highly specialised, frequently thorny, issues has created value and relevance for the industry and its clients.
'Sars, activism in Asia and corporate governance have led to this profession getting more involved in corporate issues and giving serious advice,' says Ogilvy PR Asia-Pacific and EMEA chief executive Matthew Anderson.
Tying this to individual market developments, Fleishman-Hillard has responded by establishing an agribusiness practice in Australia, and change management practice for recession-ravaged Japan.
And, according to Burson-Marsteller Asia Pacific president and CEO Bill Rylance, the nature of client decision-making at pitch level has undergone a fundamental shift towards driving PR appointments through the client's procurement department.
Pressure has mounted as clients look to shave off the 'excess' from budgets, which PR is regarded as, claims Weber Shandwick Asia-Pacific president Andrew Pirie. In addition, proving the value of PR has become a double-edged sword for global consultancies. Given their proportionally high operational and talent costs, they have traditionally supplied counsel at a higher margin than local players, often at the cost of regional reach.
The residual tension between local and global players continues in markets such as China and India, where price-undercutting is rife and competition is fierce.
Despite the challenges the region faces, there are pockets of optimism.
Surprisingly, the tech sector is re-emerging as a force to be reckoned with. Global corporations such as Lexmark seek traction in China, while Adulent, HP and Chinese computer giant Legend are enlisting agencies with regional as well as global reach to provide both the regional strategy and the local execution.
Pirie tips more global account wins to come from tech. 'In the last six months we've seen a notable change with the impact of US-based global clients looking to do business in Asia, with a view to China and India,' he says. 'Tech firms have restructured their global operations to be leaner, and have moved away from having a PR person in each market to selecting agencies that can represent them.'
Elsewhere, honing healthcare in readiness for market take-off has become a necessary weapon in regional strategy, says Brodeur Worldwide regional MD Asia-Pacific Terresa Christenson.
Edelman Asia Pacific president Alan VanderMolen agrees. Having spent the past two years radically remodelling its Asia-Pacific operations to focus on 'cross-border, cross-practice' capabilities, healthcare is vital to the new Edelman model, which recently appointed a new regional healthcare MD.
Being 'back in the black' for the first time since revenues plummeted 21 per cent in 2002, VanderMolen is bullish on the six per cent regional revenue increase from January to May this year, up on 2002, and anticipates further growth.
'Corporate and stakeholder relations and healthcare are on fire, and in the latter we're seeing growth in Korea, Taiwan, China and Singapore, where regional client headquarters sit,' he says.
While the IPO market was all but written off in 2002, large corporations did list, and the world's fourth largest IPO in 2002, Singapore Post, was handled by Weber Shandwick. Financial specialist Gavin Anderson also managed the global offering of Malaysian Plus Expressways.
With GDP growth forecast to hold at seven per cent coupled with continued foreign investment, China is the regional bright spot, despite the impact of Sars.
Investor relations, IPO activity for Chinese companies seeking to list on the Hong Kong stock exchange, and brand marketing, are areas in which Ketchum Newscan partner and CEO Kenneth Chu is seeing vested client interests.
At MS&L Greater China business has been bolstered by healthcare and financial, with brand, consumer and issues management evolving.
'Our consolidated income grew by 43 per cent in 2001 and 32 per cent in 2002, plus we expect double- digit growth in 2003,' says MS&L greater China MD and Asia-Pacific director Fiona Cohen.
As pharma companies expand R&D manufacturing facilities in China, and consumer trust in traditional Chinese medicine wanes, Cohen believes the opportunities for Western pharmaceuticals are significant.
While obstacles such as billing in RMB, China's currency, and local perception of PR as a commodity are concerns, global client servicing continues to be the safer short-term bet. Consultancies are aware that becoming valuable at a local level is where the real challenges, and future rewards, lie.
AUSTRALIA AND NEW ZEALAND
While public affairs remained a strong sector, global consultancy players had a difficult time staying relevant to clients amid the sea of specialist boutiques.
Restructuring and paring down have been the buzzword for networks such as Weber Shandwick and Burson-Marsteller. Australia's largest home-grown network and recent Cordiant breakaway Professional Public Relations has seen encouraging growth in consumer and lifestyle, but MD Richard Lazar admits improvement has been slow. 'However, finance and business sectors have been reasonably steady and we've seen some upturn in crisis and issue management,' he says.
Meanwhile, New Zealand consultancies are facing the reverberations of Sars in the local travel and tourism sector. But, as a world-class agricultural producer, the trickle-down effect of resulting opportunities in bio-tech, bio-security and scientific research are ever-present.
Activity in the government sector is an industry high-point, driven by public demand for transparency and governance.
With GDP growth at four per cent in 2002, MD of B-M affiliate The Accumen Group Michael Dunlop states the trend for businesses to move to Auckland has led to burgeoning growth in that market.
'Relative investment in communications by companies has remained much the same over two years, but client expectation of performance has increased considerably,' he adds.
The need to do more for less is the challenge the industry is grappling with in every market from New Delhi through to Auckland. But overall, the industry prognosis moving into 2004 for Asia-Pacific is quietly hopeful, mixed with cautious optimism.
INDIA A COMPLEX MARKET WITH HUGE POTENTIAL
Agencies operating in India face the challenging task of reaching one billion people across almost 3 million sqkm, covering 28 states and seven Union Territories, with 18 official languages and hugely varying socio-economic categories. This means home-grown players have cornered a market which global consultancies have largely been cautious to approach, according to Consultants Association of India (PRCAI) founding president Prema Sagar.
Despite its complexities and market size - including more than 17 daily English-language newspapers - the entire Indian PR market is valued at only 1.5bn rupees (£20.5m), in comparison to its advertising cousin, worth a 100bn rupees (£1.4bn).
Working with both Ruder Finn and MS&L in India, Hanmer & Partners MD Sunil Gautam says: 'In advertising, any big global brand operates in India under its own brand and is known. This awareness has not happened in PR and, conversely, global PR players do not know the size of the Indian market.'
Ogilvy PR is one of the few wholly-owned exceptions. However, as the market experiences sustained growth in business outsourcing, healthcare, biotech and IT development, it's little wonder networks like Edelman are eyeing the market.
According to Sagar, the potential is considerable and the growing need for activist communications remains a challenge. 'IT will continue to be the flagship industry for India, which will sustain GDP growth,' she says. 'However, the rising population and growing menace of diseases such as Aids and Hepatitis will exert immense social pressure, resulting in a desperate need for social communications across India.'