VMLY&R reorganisation taking shape in Asia

Three weeks after WPP chief executive Mark Read’s decision to merge VML and Y&R into one agency, sledgehammers are at the ready in WPP offices across Asia.

“We either get this space and knock down a wall to make a continuous space or [we do it] on the third floor,” VMLY&R’s co-CEO Tripti Lochan tells Campaign Asia-Pacific during an interview at WPP’s Singapore headquarters on Scotts Road. “There are various negotiations and discussions with internal WPP teams in progress.”

In markets like Singapore and Malaysia, offices on different floors will be joined. In China, co-CEO Yi-Chung Tay has a trickier task: finding a single, larger space in Shanghai that's acceptable to everyone in three currently separate VML and Y&R offices. “In the new office we’re going to have the biggest bar,” he jokes.

Yet even before the physical work begins, combined teams will already be moving in together this week. Indonesia already has its new seating plan.

The plan, Lochan says, is to put creatives from both agencies together in the same large space, then to have all business teams together. HR and finance will also be combined.

“That’s the way to get to full integration…to exist as a new whole,” she says.

New leadership and structure

Most of the walls that need knocking down, of course, are not physical barriers, but cultural ones formed over time. Digital transformation might be a foreign term for some Y&R offices, Lochan notes, while VML employees might be less familiar with assessing brand value.

Perhaps more important in the short term will be the need to erase any potential stigma over what has largely been perceived externally as a reverse-takeover of the once-mighty Y&R by the feistier upstart VML. Remember, not too long ago VML was considered to be just a small part of the larger Y&R Group.

It’s become abundantly clear from the top—where VML global chief Jon Cook was handed the reins of the combined agency over Y&R’s David Sable—down to regions and country levels, that VML management have been given the keys to drive this bus.

L to R: Chris Foster, former president of Y&R Asia; Andrea Conyard, former CEO of Y&R Southeast Asia. Neither will be part of VMLY&R.

In Asia, VML’s Lochan and Tay were named co-CEOs, while Y&R Asia president Chris Foster, who only recently spoke to Campaign Asia-Pacific about his vision for fixing Y&R, does not have a role with the new agency. Neither, Campaign has now confirmed, does former Y&R Southeast Asia CEO Andrea Conyard, who was just brought over from Havas this summer.

Of course, neither Lochan nor Tay want to entertain the idea that VML is overrunning the new agency. Instead, they point to other key positions that will be taken up by former Y&R staff, including Hari Ramanathan, who will be VMLY&R chief strategy officer and former Y&R CFO Marc Sigle, who is the new chief operating officer in the region.

L to R: Marc Sigle, former Y&R Asia CFO, is now COO of VMLY&R in Asia; Hari Ramanathan, CSO of Y&R Asia, becomes CSO of VMLY&R.

“At every level of leadership we have combinations,” Lochan maintains. “Maybe initially there’s some fear about VML coming on top, but it’s early days and over the next few weeks and months our actions will define us when we put the entity together.”

Y&R spokesperson Anna Goulding suggests she’s noticed an actual lift in morale among Y&R staff post-merger, as they sense more opportunity to expand their skill sets, particularly in areas of commerce and technology.

It’s also helped that while there may be some efficiencies and management exits, talk of redundancies has been kept to a minimum. Lochan says because staff is hired against current business in roles supporting existing clients, there’s very little danger suddenly having extra staff with little to do, though there may be some duplication in administrative and support positions.

China structure

In China, Tay acknowledges that when the merger was announced at a town hall, Y&R staff initially looked worried. But when it was made clear that rationale was not about creating efficiency but new potential, the staff became more upbeat. Tay actually argues his bigger problem is finding even more employees, not fewer.

VML has a much smaller presence outside of Shanghai, so Y&R operations in Guangzhou, Hong Kong and what’s left of Beijing after ceding the Dell business to Wunderman, will remain largely unaffected in the short term.

But the structure put in place by Y&R’s Foster in China, with Greater Bay managing director Damien Tew running the south (Guangzhou and Hong Kong) and Shanghai managing director Annie Boo controlling the northeast (Shanghai and Beijing) is likely to change. Both Tew and Boo will be part of the new agency going forward, Tay says, and exact roles and responsibilities should be worked out by the end of the year.

And while Foster also openly promoted the idea of moving more Greater Bay resources from Hong Kong and Guangzhou to Shenzhen, to eventually form a commerce center of excellence there, Tay sounds more cautious. He says there is enough opportunity in the markets they’re serving that Shenzhen can wait.

Centres of excellence and innovation

The idea of forming centres of excellence (COEs), however, is definitely in still on, with a formal plan expected by the end of this year. Already VMLY&R knows it will create a content and media innovation COE in China and a digital transformation and brand experience COE in Singapore in conjunction with the Economic Development Board.

Others are less clear-cut. Foster had favoured establishing a COE in Thailand around the Bangkok office’s leadership in using Y&R’s Brand Asset Valuator (BAV) tool. That may still happen, notes Lochan, though India also has a strong record on brand stewardship.

Y&R’s Garage incubator, meanwhile, will live on under the leadership of VML’s former chairman of Southeast Asia and India, Keith Timimi, who has taken on the new role of chief innovation officer at the new agency. Given VML’s expertise in developing new business products and services, this will likely be a very good fit.

Keith Timimi, former VML chairman for SEA & India,
becomes chief innovation officer of VMLY&R in Asia

The case for a combined agency

Not everything is expected to fit seamlessly though. Nor is everyone is convinced this entire merger will create an agency less awkward than its acronym-heavy name.

VML, with its focus on digital transformation, was already growing fast, finding success in a space that many legacy creative agencies like Y&R were more slowly shifting toward. Undoubtedly this move will bring Y&R there more quickly.

But will it slow VML down as it now focuses on this massive integration project? Was it better off on its own?

Lochan admits this has also been suggested to her by some internally, but she insists the combination will get both more quickly to where they need to be.

“Could we have done it on our own?" she opines. "Yes of course. But the speed at which you [move] is greatly dependent on taking what you have and optimizing that moving forward, and I think we have the opportunity to do that with Y&R.”

In Asia, most obviously, the Y&R network brings VML to many more local markets where it hasn’t had a presence, such as Thailand, Vietnam and Philippines. Meanwhile, the agency scales from 3,000 to 7,000 employees globally.

Sheer scale aside, the co-CEOs argue the combined entity creates a far more complete and comprehensive set of services for clients than what used to be done separately.

“[The merger] meant that we would go from data and insights with the huge impact that the BAV has, to the primary research and social listening we do, looking at data with the capabilities of being able to offer integrated campaigns to looking at commerce, data and media innovation, brand transformation and technology that we can go market with,” Lochan enthuses.

“An integrated offering of a combined agency might sound like something other agencies or holding groups have talked about before, but I think this is something that has not really been done well before,” Tay adds. “If we do it well, this will be strong and unique, with many areas for clients to tap into.”

Client expectations

“Beyond the single company, [this merger] was about what do we now have that we can provide our clients, which is of value to them, as they are presently under huge pressure to transform themselves,” says Lochan.

The answer, marrying brand-building, research and strategy (Y&R) with executing digital transformation (VML) sounds good enough on paper that most clients seem willing to give the new agency a chance, according to the agency.

“The feedback I have from them [in China] is either very positive or curious,” says Tay.

“Y&R and VML clients have great interest in understanding what does this mean for them," notes Lochan. "What is the additional capability, coverage? They want to know what will be the difference for them.”

So long as they’re reassured that existing staff will remain in place, that their account manager will carry on and that quality of service will not fall off, they’re fine, she adds.

But already, Lochan says, clients are asking to meet ‘team X’ now or when new services can be brought. Some clients are saying “OK, what can we do from tomorrow?”

“That’s the main challenge” Tay says. “With the interest there have been expectations and we need to set these and manage the transition much faster.”