Will Host sink or swim in Singapore?
For Australian ad agencies, New Zealand is about as far as they have dared to venture in recent times. International expansion has never really been more than a pipedream for Aussie agency bosses – or not part of the plan at all. Even less so in these leaner times.
The Campaign Palace is the only recent example of a major Aussie agency brand to have spread it wings overseas. And it’s cruelly ironic that The Palace has flourished in Indonesia in the year or so since it opened, but died an ignominious death in its home market just a few months ago.
So the launch of Host in Singapore was something of a surprise, both in Asia and Australia. The Sydney agency, now 13 years old, has had ambitions to launch overseas for some time, says founder Anthony Freedman, who is now regional CEO. But losing client Vodafone a year ago put these plans on ice.
Since then, the hole left by the telco has been plugged with new clients, and with the backing of Havas, which bought a majority stake (51%) in Host in July 2011, an Asian adventure is a more realistic prospect. And now with the right launch team in place, Host has hatched a plan to grow a pan-Pacific network, starting with Singapore.
But before the network dream is realised, what of Host’s decision to begin its journey in Singapore, now the hub for many of the region’s multinationals? Is ‘Asia lite’ an easy option?
Host is, in a fashion, similar to Bartle Bogle Hegarty. When the British agency launched in Singapore some years ago, it had the backing of Publicis Groupe, which then owned 49% of it. Like BBH, Host wants to build a micro-network with just a handful of offices in key markets. And also like BBH, Host is starting life in Asia with clients that are regional or global in focus; Coke and Tourism Western Australia.
There, the similarities end. Host does not have the global creative reputation of an agency like BBH to break down doors. The Singaporean agencies and clients I have asked had not heard of Host until it opened an office and threw a big party at a trendy bar. Happily, Host chose to launch around the time that its Kiwi Sceptics campaign for Air New Zealand, arguably one of the best pieces of branded content an Australian agency has ever made, won big at SpikesAsia – the region’s biggest awards show. But even with such a springboard, success will not come easily.
Within the agency’s first 12 months, Freedman hopes to have chalked off four key milestones: a motivated team of the best talent around, a mix of global and local brands on the client list, a body of work that is admired by the industry and a “growing reputation for being a change agent”.
In MD Dan Gibson, a former BBH, 180 Amsterdam and Ogilvy executive, Freedman has made a decent start towards kicking his first goal. But winning new clients and doing great work in the Host mould – with that edge of surprise – will be harder; Freedman’s vision to stir things up, harder still.
Agencies that complain about the conservatism of clients in Sydney or Melbourne are in for a shock in Singapore. Though there are some high-calibre clients who will pay for first-class work (such as Singapore Airlines and the hard-hitting campaigns of Singapore’s Health Promotion Board), there are many who will not. Which shrinks the pool in which Host can fish for new business.
Fiona Bartholomeusz is the founder of Formul8, an independent Singaporean agency that, like Host, is 13 years old. Formul8 has also ventured overseas, having set up a successful office in Dubai. She reckons that what clients are prepared to pay for in Singapore, and the speed with which they expect it, places Singaporean agencies under greater pressure than their peers in Australia.
“Clients in Singapore are cheaper than ever,” she says. “Plus costs are high, property prices are mad and staffing is hard. So it will be tough for a firm that’s heavily expat based. And let’s face it, there are more than enough expat-led agencies for clients to choose from here.”
Regardless of the name on the door or origins of a company, Singapore clients are very track-record focussed and referral based, Bartholomeusz adds. “So it’s always difficult being new kid on the block.”
Does it matter that Host has Australian heritage – and what does being Australian mean in Singapore?
“I think that clients here are aware that Australia has some great creative agencies that produce some stellar work,” Bartholomeusz says. “But I’m not sure if they can get past the ‘let’s pop out for a beer at 6pm’ reputation that comes with it.”
Freedman says that Host Singapore will be bringing in local talent to support Gibson and his team, and will soon be a “predominantly local” agency. But he admitted that what makes the Host model unique – outsourcing creative work to closely aligned companies – might not work in Asia.
“We don’t want to limit the creative talent pool by working with people only on our terms,” says Freedman. “We want a bigger talent rollodex to bring to bear different combinations of work, depending on what the client wants.”
Flexibility is the name of the game. The saying goes that clients in Singapore go into pitches wanting to hire Ogilvy – for many years Singapore and Asia’s most powerful agency network – until convinced otherwise. But John Hadfield, the CEO of BBH Asia Pacific, reckons that the time is right for new blood.
“Virtually all multinational agencies in Singapore have both local and regional clients due to Singapore’s importance as a regional hub. The key is having a model that flexes across both sets of clients, yet is still exceptional for each. Oh, and allows you to make money as a business,” he says.
Like Sydney, the Singapore market is oversupplied – but it’s oversupplied with the same type of agencies, says Hadfield. “More differentiation will only make the marketplace more interesting which will be great for us black sheep. Host has a great opportunity here.”