Hong Kong first market in Asia to house Publicis agencies under one roof

Publicis Groupe began to pivot itself in 2015 through its drummed-about Power of One strategy that aimed for frictionless collaboration between all Publicis agencies to better service talents and clients. That started with organising the company's myriad of agencies across four 'solutions hubs': Publicis Communications, Publicis Media, Publicis.Sapient and Publicis Health, and last year progressed to move from an agency model to a country model, in which each country (or region) has a unified P&L statement, while all employees in the same market are physically housed together in the same building.

Hong Kong is the fifth market globally, after France, UK, Italy, and Africa to do so.

Since February 2018, 400 staff from thirteen agencies (Publicis Worldwide, Saatchi & Saatchi, Leo Burnett, Publicis.Sapient, Luminous, MSL, Digitas, Arc, Blue 449, Performics, Spark Foundry, Starcom and Zenith) have been working together in a new office space in Hong Kong's Kowloon. 

To be accurate, there are actually two spaces: one on the 6th and another on the 33rd floor of the AIA Kowloon Tower. 

Following CEO Tom Kao’s appointment earlier in June 2018, the Groupe formally presented the consolidated restructure to 150 clients at a launch party last Friday. Kao reiterated that the Power of One strategy is "about creating a new ecosystem that addresses the changing realities of the advertising and marketing environment”, emphasising that this isn't a "real estate play" like when WPP signed a landmark lease for its Shanghai campus in 2015.

In his speech, he shared five keywords that embody the strategy in Hong Kong, a strategic market that he said is still a window for China to connect with the rest of the world: 

• "client-centric" – to put the client at the centre
• "modular" – to approach each client and campaign with an open structure that allows Publicis to 'plug and play' the best talent for each unique situation
• "simple" – to have a unified P&L that removes all operational barriers
• "seamless" – to create client leadership that acts as a single point of accountability
• "alchemy" – to fuse creative, intelligence and technological capabilities to provide transformative ideas 

"Within Publicis Hong Kong, we have identified client leaders who could come from any of our 13 agencies to tap into the internal resource base in a fluid way," said Kao in an exclusive interview with Campaign China. "There will be one fee agreement with each client that contributes to the unified P&L."

An important client like HSBC used to be serviced by a regional account function from Saatchi & Saatchi, which the bank is globally aligned to. But this team is based in Singapore, while the client sits in Hong Kong. This is not an ideal model, and Publicis has since moved its HSBC client-servicing hub to the Hong Kong shared-office in the past month and could now draw support from Digitas, for example.

"HSBC said to me: Look Tom, I don't want this hub to be limited to Saatchi and Saatchi, but to be able to be attached to the whole of Publicis. They embrace the integration; they want the integration," said Kao, who also revealed an ambition to "have more upstream relationships with clients like consultancies do". 

But that model is not being built to generate premium pricing, he clarified. New revenue will come from Publicis Hong Kong as a whole justifying its value proposition in high-level strategic possibilities, rather than execution. 

How does the group then deal with conflicting clients? "We are still going to be mindful of proprietary and confidential information and will separate teams who are on conflicting accounts," he said.

"Ogilvy will not sit together with JWT and Grey [under WPP], and neither will BBDO with DDB [under Omnicom]".

One weakness of Publicis Hong Kong is how the now-unified cluster of agencies are still dependent on a few big multinational clients and are removed from the local scene," Kao pointed out. "I want to change that 90-10 ratio of MNC to local clients. I am more than willing to put in the investment, but I can also tell you honestly it may be difficult, not just from the pricing perspective. This means no disrespect to the local Hong Kong clients. If they are not organised in their marketing and they want agencies only for execution, I'm not interested. I can't be interested."

 

List of senior Publicis executives in above photo:

1. Bertilla Teo, Chief Executive Officer of Publicis Media Greater China
2. Michael Lee, Chief Executive Officer of Publicis Communications Greater China
3. Carol Lam, President & Chief Creative Officer of Leo Burnett Greater China
4. Fan Ng, Chief Creative Officer of Saatchi & Saatchi Greater China
5. Alexis Chiu, Group Managing Director of Saatchi & Saatchi Hong Kong
6. Jeff Ho, Managing Director of Leo Burnett Hong Kong
7. David Paysant, Managing Director of Digitas Hong Kong
8. David Chan, Managing Director of Publicis Media Hong Kong
9. Shirley Lau, Managing Director of Starcom Hong Kong
10. Jenny Chan, General Manager of Zenith Media Hong Kong
11. Ray Cheng, Deputy General Manager of Zenith Media Hong Kong
12. Robert Sue, Managing Director of Blue 449 Hong Kong
13. Terence Yam, General Manager of MSLGROUP Hong Kong
14. Richard Nicoll, Chief Shopper Marketing Officer of ARC Hong Kong
15. Chowpo Kong, General Manager of Luminous MSL Hong Kong

[Editor's note: The headline was tweaked from 'Publicis Hong Kong first in Asia to house agencies under one roof' to 'Hong Kong first market in Asia to house Publicis agencies under one roof' to reflect the fact that Dentsu Aegis Network completed its co-location in 2017, earlier than Publicis in 2018.]