Asian agencies in Australia: a quiet game of patience
In a piece that first appeared in Encore, Robin Hicks says Asian agencies are still to make their mark Down Under, but don’t rule them out yet.
Toyota, Samsung, Kia, Hyundai – these Asian-born brands are now household names in Australia. So why are the Asian agencies that represent them here anonymous?
In fairness, it’s still early days for Japan’s Dentsu and Korea’s Innocean and Cheil, which have been in the market only a few years combined. But talk of their progress makes for a “very short conversation”, says pitch doctor Peter McDonald.
Innocean, which opened a Sydney office in 2009 to service Kia and Hyundai, took three years to win its first non-Korean car client, landing price comparison site Make It Cheaper late last year.
Though a solid automotive outfit with 45 staff, the agency, with a name made from the words ‘innovation’ and ‘ocean’ sandwiched together, has struggled to shrug off a reputation for being anything but an inhouse agency on four wheels.
Management changes haven’t helped. New business director James Welch has left. So has MD Amanda Wheeler, recently replaced by Mike Morrison, who previously spent six months at Ten as chief sales officer.
“The biggest problem for Innocean is that it is not obvious what they stand for,” says McDonald, who runs The Agency Register. “They have failed to build a profile that convinces clients they are better than what their rivals can offer.”
Dentsu, which for many years has struggled to make much progress outside of Japan, is a more exciting prospect – at least on paper.
The largest single agency brand in the world, with its gob-smacking Tokyo skyscraper HQ where 8,000 staff work, is on the verge of acquiring British media buying group Aegis Media, a $4bn deal that will give agencies in Australia something serious to think about once the dust settles.
“There’s a treasure trove of marcoms companies to be unlocked once Dentsu buys Aegis,” says McDonald.
There is talk of a (non-equity) joint venture with the most exciting Australian start up of 2012, Archibald/Williams, and a flurry of other deals to follow.
But Dentsu’s beginning in Australia has come “in fits and starts” since it entered the market and bought Melbourne digital agency Steak in 2011, McDonald says.
Managing director Emma Hancock left in July last year, and speculation that Dentsu would merge with fellow Toyota roster agency Oddfellows, a solid but uninspiring outfit, has not helped the agency settle.
There remains much to prove. For now, Dentsu Australia is an agency with just 15 staff, and a vague proposition like many other network agencies in Australia; a small outpost boasting big resources, with an innovative edge. “Dentsu has a huge opportunity in Australia – if it can replicate the formula that is starting to work so well in North America,” says McDonald.
Dentsu bought New York agency McGarry Bowen in 2008, and will adopt the same strategy here – “buy local and graft it on,” says McDonald. “Shipping in 20 Japanese and expecting local clients to hire you just won’t work here.”
Cheil has been in Australia for a number of years, and signaled its intention to put some distance between its founding client last April by moving to an office outside (well, just around the corner from) Samsung’s Sydney HQ. Like Dentsu, it wants to be seen as an Aussie agency that happens to be based in Asia, and is run by former McCann executive Andrew Swinton. But like Innocean, Cheil is still hampered by the ‘inhouse agency’ tag, and is not helped by the uninspiringly generic slogan ‘Passion for ideas’.
Despite brisk growth from 45 to 79 staff since ‘leaving home’ last year, Cheil has inevitably felt growing pains. It picked up a few non-Samsung projects recently (from the Discovery Channel) and a big project to launch Samsung Experience Stores, but lost highly regarded creative director Roy Faulkner after just eight months in the job. Swinton is still looking for a replacement.
In Australia as elsewhere, Cheil positions itself as an expert in where digital meets retail, and the market will be wondering if it can reproduce the sort of magic that won a media grand prix at Cannes with a virtual storein Seoul subway stations a few years ago. The head of shopper marketing at Ideaworks, Peter Wilson, was recently brought in to lead Cheil’s charge in retail, plus a few other experts in the field.
Although Cheil is gathering momentum, the agency is noticeably quiet – a trait it shares with Dentsu and Innocean. Michael Kim, Cheil’s global chief operations officer, says there is good reason for this.
“Tap a stone bridge before crossing it,” says Kim, the Korean equivalent of ‘look before you leap’. “We have tried to prepare ourselves for the Aussie market carefully – not hastily or rashly,” he says.
Cheil is a “rare agency” that boasts a fully integrated array of disciplines, and its skills in digital and retail position it well to tap into Australia’s love of shopping using smartphones, he points out.
Just one month into his new job, Innocean Australia’s boss Mike Morrison, who has also worked at Y&R and Sapient Nitro, says his employer is also playing a patient game.
“We want to be respected for our work, and eventually that will lead to more opportunities with other clients,” he says. “Of course we want to grow, but not at all costs. I’ve been in a number of firms where the pressure to deliver results quickly is extreme. We are taking a measured, ordered approached to growth. It has to be good for our staff and good for our culture.”
Innocean is good at taking brands “that Australians were suspicious of and building trust among consumers”, says Morrison. The task over the coming months is to make Innocean “pitch fit” and win new business that is right for the agency. In 12 months’ time, Morrison hopes to have brought in some small projects with blue chip clients, and within 18 months, more sizable pieces of businesses. “There’s no point banging on peoples’ doors just yet,” he says.
But Dentsu is where most attention is, justifiably, focused.
Though he won’t discuss the implications of the Aegis opportunity (the deal has not yet been finalised), Dentsu Australia CEO John O’Connor says his agency has already started to turn heads.
“My job is to realise our enormous potential,” says O’Connor, who joined in May last year. He points to strategic and channel planning tools soon to launch here that could “re-write the game in Australia”.
“The market is moving back to the full-service model, and Dentsu is one of the few agency brands in the world that never unbundled its media department. That gives our business a wealth of data and insight, since we’re fully integrated,” says O’Connor. “If we can own data, we can own the future.”
Robin Hicks was a Singapore-based journalist for five years. His Asian Persuasion column appears every fortnight in Encore.