Embracing change key to realising China’s potential: OMD

Almost two years after taking the reins at OMD China, CEO Arlene Ang feels a string of key client wins and a healthy haul of industry awards at the end of last year have “validated” changes in management and direction she has implemented.

“We live for good work, for the fact that we are one of the better ones,” she says. “That’s why we are in advertising. That’s why we work overtime all the time. That’s why we have deadlines.”

Ang feels particularly vindicated by the results in Guangzhou, where she brought in a completely new management team to mend a situation where people “were not working together”. In the past year, the office has won business from Wang Lao Ji Herbal Tea, Carlsberg, Tempo, Staccato and Nissan’s digital account for the whole of China.

In Shanghai, there have been similar gains with accounts such as H&M Greater China and second-hand-car portal Carsing.com.cn.

In Campaign’s Agency of the Year Awards, the agency netted the Greater China Media Agency of the Year regional gong, plus Gold in Hong Kong and Bronze in China, an individual award for a key members of Ang’s team, business intelligence director Jeanette Phang, and a team award for the corporate communications team. Earlier in the year, the agency also took home a Bronze from Spikes Asia.

But Ang is not content to rest on these laurels. Rather, as she talks to Campaign Asia-Pacific in OMD’s vast headquarter offices in Shanghai’s Jingan district, it is the future that dominates her thoughts.

“This is a very challenging time for agencies,” she says, citing the number of pitches on the go both globally and in China. The industry is in flux, she adds, with many “traditional relationships and methods” no longer relevant.

“I don’t think we can all survive if we don’t adapt … we have to be ready to change, ready to accept new thinking.”

Ang is scathing about people in the industry who rely on “smoke and mirrors, a lot of talk” rather than real talent, thorough research and good old-fashioned hard work. But she predicts a day of reckoning is coming soon when those who take the easy path will find those routes blocked to them.

“When the whole economy is going up, even if you do nothing you still grow. This has brought up a whole generation of lazy marketers,” Ang says. “But in a market like now, one that is falling or in decline, only the ones with the real talent can succeed.”

The new normal

The traditional business model, which predicates year-on-year growth, is unsustainable, she says. In China, where brands have grown accustomed to rapid expansion for more than two decades, that could come as a hard realisation for many.

“Flat or decline is the new normal in China,” she says. “The days of double-digit growth are over.”

That puts pressure on agencies to develop new revenue streams, be more proactive in their development and use of data, and increasingly flexible in their approach. OMD China is investing heavily in research—such as its DIVE reports on social, mobile and video, and its ‘The future of China’ investigation of consumer attitudes and confidence—and in nurturing and developing internal talent.

“The old ways of trading, where I give you a pot of money and you give me the best price, are gone,” she says. “Our planners have to be 360-degree. They have to be as fluent in TV as in mobile and at scale.”

Despite the challenges, Ang says she finds it “exciting” that the “whole market is changing”.

“What is not digital nowadays? Even TV is digital,” Ang says. “Can we do programmatic TV, radio or even outdoor? Of course.

“What is good about China is that it can happen overnight.”

And agencies are not the only ones who need to change: brands need to have a similarly flexible mindset to ensure a successful two-way relationship.

Ang says that while some clients are “more able to accept and embrace risk than others”, there is a strong tendency in China for brands’ marketing executives to judge an advert by how likely it is to please their boss rather than the impact it will have on their consumers. That often leads to unrealistic expectations for unattainable performance indicators and for ever “better and better” results.

Ang cites the example of the first advert in a campaign reaching 100 million impressions with a 1 per cent click-rate. Clients might then expect the second ad to gather 150 million impressions with a 2 per cent click-rate and the third to hit 200 million impressions and 3 per cent click-rate.

“If you have these kinds of expectations you are actually encouraging fraud,” she says. “If you don’t want fraud, then don't set up unrealistic expectations.”

But she is overwhelmingly positive about the rise of Chinese brands, and their potential to overturn persistent prejudices about perceived quality levels, overseas at least. The agency’s research shows that, rather than a cheap alternative, domestic brands are increasingly consumers’ first choice on the home market.

“Are Chinese brands inferior? I don’t think so. Are they less popular? I don’t think so,” she says. “In five or 10 years, it will be very interesting to see what China is like, what brands are leading the market.”

When that day comes, there is no doubt Ang will be there to see it.

“This is the place to be,” she says, confidently. “This is the tipping point of what the future is going to look like. It is up to brands to grab that and make use of this opportunity.”