CLOSE-UP: LIVE ISSUE/BBH’S START-UP IN ASIA; Why BBH has decided to head east instead of west

Karen Yates examines the reasons for BBH starting up in Asia later this year

Karen Yates examines the reasons for BBH starting up in Asia later this

year



Statistics coming from Asia at the moment are so good they read like

telephone numbers. Media spend was up an estimated 25 per cent last year

in Thailand and a staggering 42 per cent in China. And, by the end of

the century, China will be the third largest advertising market in the

world - behind only Japan and the US.



This is why Bartle Bogle Hegarty has chosen to go east rather than west

in its first major international expansion (Campaign, last week). It

also explains why BBH appears to have broken its own vow of not

expanding abroad and keeping ‘one brand, one office’ for the whole

world.



For his part, Nigel Bogle, a founding partner, denies that anyone

declared BBH would never launch another bureau. Only that it would not

have a network.



‘We’ll never start a network, and we don’t think we have,’ he says of

the news that the agency will start up in Singapore or Hong Kong by

October. ‘We’ve simply got one company in two places.’



It’s a fine point. But to explain it, Bogle gives a convincing lesson on

agency development. The US pioneers of agency chains, he says, all

bought into countries where their large fmcg clients went. When Coca-

Cola went to Nairobi, so did McCann-Erickson, when Procter and Gamble

hit Thailand, so did Grey and so on.



Thus, the argument runs, you end up with a network of agencies, each

steeping itself in the local culture. But, Bogle warns, this system puts

yet another barrier in the way of creating good international campaigns.

If you have a series of small bureaux wedded to their own local market,

how can you stop them focusing on local differences instead of

concentrating on regional similarities?



In contrast, BBH’s main point of difference will be that it won’t take

on any local business. It will exist solely to service the major

international brand names in its stable. For the moment, BBH is not

revealing which brands, though a quick browse through its client list

shows plenty of candidates. Alfred Dunhill, Levi Strauss, Coca-Cola,

IDV, Electrolux, Sony and more. In fact, so successful has the agency

been in winning international business that this year, it became the

first agency to win a Queen’s Award for Export Achievement.



This client list is no accident. BBH took a policy decision five years

ago to aim for big international names. Since then, international

clients have mushroomed from only 7 per cent of the agency’s income to

50 per cent - a figure approaching the ratio held by the big

international shops.



But Charles Garland, the agency’s group development director, stresses

that BBH will never go the international network route. Yes, there will

be an Asian office, and maybe a presence in the US when the time is

right. But that will be it - a strong head office backed up by a couple

of regional hubs.



Nevertheless, Asia still seems an awful lot of ground to cover from one

small office with 12 staff. How will BBH cope?



‘The reason we can do it is that we are not going to learn how each

country wants their baked beans,’ Bogle asserts. ‘We’re there for brands

that want a consistent image across various countries in the region.’



Others have tried the ‘regional hub’ route of expansion and found it a

good way of growing without losing control of agency culture. M&C

Saatchi, for example, expanded by setting up regional offices in New

York, Dubai, Sydney, Hong Kong, Singapore and Auckland. According to its

founding partner, David Kershaw, his agency’s case was slightly

different since its flagship client, British Airways, needed presence in

a wide number of different places because of the type of business it

runs. For that reason only, he says, M&C Saatchi had to link up with

another network, in this case Publicis.



He is a big fan of growing through regional hubs: ‘It means you can

shape things in your own image. Otherwise, culture can be a difficult

thing to manage. We’ve decided not to own dots on the map like the US

pioneers. Instead, we’ve shown there’s more than one way of doing it.

What BBH and we have done is the way of the future.’



Meanwhile, the question of whether Hong Kong or Singapore will be the

recipient of BBH’s first leap into Asia is still the subject of debate.

In Singapore’s favour is its impeccable communications, infrastructure

and central location. It also has one of the most creative advertising

environments in Asia.



Hong Kong, on the other hand, is the main springboard for major brands

to get into the phenomenally upbeat - not to mention large - Chinese

market.



Both cities are as expensive as London - or more so - and both are about

six hours away in time difference. Hong Kong, though, has the downside

of political turmoil as the British crown colony is returned to China in

1997.



Wherever BBH chooses, however, its media arm, Motive, will be there from

day one. To date, the agency has managed the area only by tying up with

other agencies, for tweaking ads and placing media. In Japan, for

example, it has forged links with Asatsu, and in Singapore with the

island’s hottest agency, Batey.



From October, though, it will have to go it alone with just two offices.

A fact that does not faze Bogle. Michael Jackson, he will tell you, is

one of the most popular artists in China and he doesn’t have a network.

Why on earth would BBH need one?



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ESTIMATED ADSPEND/GROWTH IN ASIA LAST YEAR

------------------------------------------------------------------------

Country    Estimated adspend ’95     Estimated adspend growth ’95

                (pounds )                        (%)

China             2.7bn                           42

Taiwan            4.8bn                           28

Thailand          1.2bn                           25

Philippines        400m                           19

Malaysia           380m                           10

South Korea       2.9bn                            9

Indonesia          450m                            8

Hong Kong         1.1bn                            7

Singapore          380m                            6

SOURCE: Zenith Media Worldwide, Campaign, Taiwan Euromonitor

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