2010 Agency Image Survey

The study yielded little change at the top of the table in terms of perception for creative agencies: Ogilvy & Mather was again seen as Asia-Pacific’s best network, with 63 per cent choosing it as their top three favourite, followed by Leo Burnett and Saatchi & Saatchi, the latter remaining prominent thanks largely to a strong profile in China despite a particularly troubled 2010. Creativity was one of the biggest drivers of perception - more so than in 2009 - and Ogilvy again fared particularly well in this department, as well as for its scale.

There was some movement lower down the rankings, with TBWA and Grey slipping and Dentsu climbing as it continues its efforts to expand outside its home market. Japan’s other biggest players - Hakuhodo and ADK - remain low down, but nonetheless enjoy a marginally stronger image than Cheil Worldwide, which has yet to build any real regional definition, and Y&R, which will be looking to draw on a promising 2010 to rebuild a frayed image.

Pointing to the renewed emphasis on creativity from advertisers, Steve Garton, Synovate’s executive director, noted that “agencies have the extraordinary ability to promote their wares with their clients’ cash”. However, as the findings show, quality of execution remains paramount.

In the media agency ratings, Mindshare again dominated. The GroupM agency was named the top three favourite by 74 per cent of pollsters, and was acknowledged for its versatility and quality of strategic thinking and insight.

However, that is where the similarity with 2009  ends. Notably, OMD slipped, with just 34 per cent of marketers citing it as the best media agency. UM also dropped out of the top five, as Starcom, the biggest climber, shot up to third place. The agency also had the highest awareness at 95 per cent.

Further down the table, PHD climbed one place, buoyed by a solid performance throughout the year. However, MPG, still at the bottom of the heap, has a major task ahead in convincing marketers of its credentials, in spite of a stronger overall performance than in 2009 in terms of new business. And Initiative, shy as ever, failed to register at all in China, Hong Kong or Singapore.

The chance to take a convincing lead

The 2008/09 downturn prompted a reset among many clients, and with it a change in requirements. Though fees, particularly for media agencies, have been driven down, rather than simply pursuing the lowest-priced execution, marketers are now seeking genuine guidance from their agencies in making sense of an increasingly complex media environment. This is despite a growing trend on the client side to hire in-house experts in specific fields such as social media. 

Paul Heath, Ogilvy’s regional CEO, anticipates a tipping point for digital that will empower agencies, but also potentially lead to a change in the way they make their money. “The level of complexity represents a real opportunity for agencies,” Heath says, but adds: “Clients are likely to put more emphasis on ROI and we may start to see elements of payment by results introduced to agency compensation models as well as the growth of consulting services inside agencies.”

According to John Zeigler, president and CEO of DDB Asia-Pacific, this year will mark the dawn of a more collaborative era, with agencies - both creative and media - able to make a bigger, more direct contribution to client business goals.

Some observers believe that changing client demands are likely to prompt a return to integrated services, which could then shrink the space for medium-sized agencies. Nonetheless, this is unlikely to mean a return to agencies staffed by generalists. Rather, the industry will need to draft in more specialists based on client needs.

Talent sourcing and retention remains as much a pressing concern as ever, although Zeigler says the evolution of more distinct operating styles within agencies will mean shifting between companies will become more difficult.

For media agencies, perhaps a more pressing issue is that of fees as the commoditised services of buying and tactical planning continue to be squeezed. In 2011, agencies will undoubtedly need to pursue diversified revenue streams to balance this out, but it is to be hoped the desire to win new business at all costs, that has been evident in recent years, will also be checked. 

Clearly, 2011 will not be without its difficulties, but with Asia having returned to form to the extent that it has, the industry is much better placed to tackle them than it was a year ago.

Also access the Creative and Media Agency Report Cards. 

This article was originally published in the February 2010 issue of Campaign Asia-Pacific.