The World: TBWA tie-up brings Hakuhodo creative options

The joint venture unites TBWA's creativity with Hakuhodo's strength in Japan to improve its offer to clients.

Invite a cross-section of business leaders to indulge in a spot of crystal-ball-gazing and there is a fair chance the c-word - collaboration - will warrant a mention. Historically, collaboration has not been a particular strength of the ad industry, but attitudes are starting to change, particularly when partnerships can offer clients benefits.

The joint venture between TBWA and Hakuhodo in Japan, which launches on 1 July, promises such advantages. TBWA\Tokyo's president, Gary Wenzel, the chief operating officer of the new entity, says: "TBWA's experience is all about managing global brands and this, combined with Hakuhodo's local market expertise, will offer clients a nimble, flexible agency.

Our creative reputation and skill throughout our network, combined with Hakuhodo's media planning, offers clients both small- and large-scale benefits."

With a 300-strong workforce sourced from both agencies, the Toyko-based TBWA\Hakuhodo will handle TBWA's client base in Japan, which includes the likes of Adidas, Masterfoods and Haagen-Dazs. It will also run Nissan, which, since 2000, has been handled by Hakuhodo\G1, a joint venture between Hakuhodo and TBWA specifically designed to manage the car giant's global branding needs.

The two agencies have already established a joint venture in China, which launched in February with a 60-strong team in Guangzhou. The primary role of the Chinese partnership is to service Nissan, which has predicted that China will be its third-largest market after Japan and the US by 2008.

That 50:50 joint venture was created specifically for one client and followed the Hakuhodo\G1 model, but TBWA\Hakuhodo has a different remit altogether; its intentions are fixed on managing a broader range of clients.

Yet Hakuhodo's clients are off-limits. Wenzel says: "We are not intending to encroach on the mothership's clients; there are plenty of other advertisers in Japan whose business we are interested in attracting."

Before beginning a new-business drive, TBWA\Hakuhodo's priority is to provide value-added services to existing clients. Hiroshi Ochiai, the president and chief executive of Hakuhodo in Japan, who becomes the new agency's chief executive, envisages "a commitment to offering innovative services which extend beyond mass advertising".

The joint venture is split 60/40, with Hakuhodo owning the larger stake, a divide that was determined through a value assessment of each business.

It might seem odd that Hakuhodo owns the bigger part when the joint venture will service TBWA's client base, but Wenzel is unconcerned. "People may be wondering about the 60:40 split, but it's just not an issue," he says.

Considering the potential revenues that could be generated by Hakuhodo's substantial media buying muscle, the split could actually be seen to favour TBWA in the long term. HDY, the combined media buying arms of the advertising agencies Hakuhodo, Daiko and Yomiko, has a 17 per cent market share, presenting Dentsu - the market leader, claiming 26 per cent - with a formidable challenger.

Importantly, TBWA\Hakuhodo will also offer a creative alternative to the rather conservative Dentsu by providing a one-stop shop in a culture where it is not unheard of for clients to have relationships with several agencies. TBWA's "disruption" theory, brought to life in Japan by campaigns such as Adidas' "vertical football", shows the agency can bring fresh ideas to a market which, at its worst, churns out repetitive 15-second TV spots starring stale celebrities.

The latest joint venture comes as no surprise in a year where Hakuhodo has been a hive of activity.

Since it floated on the Tokyo Stock Exchange in February 2005, Japan's second-largest agency has been busy creating new divisions and establishing partnerships.

Last April, it streamlined its four advertising groups into six specialist units to help make it more flexible and, in July, it launched Sports Marketing Method to strengthen its sports planning and sponsorship capabilities.

In September, it joined forces with the Moscow-based full-service agency Prior, giving it a foot in the door in the Russian market.

Yet joint ventures on its home turf have not proved particularly fruitful in the past, as many failed tie-ups between Western networks and Japanese shops suggest. Grey Daiko, Yomiko Bates, Hakuhodo McCann, Hakuhodo Lintas and Leo Burnett-Kyodo have all bitten the dust, leaving just I&S BBDO, Tokyu DDB and Dentsu Y&R. As one agency head observes: "These joint ventures have just not made a splash in the industry."

Could TBWA\Hakuhodo be the exception? The long relationship between the two agencies certainly gives it a good head start; they have collaborated since 1990 on Nissan. Ochiai says: "This joint venture has materialised organically, so we have a good foundation and a mutual respect. Based on our relationship and experience of working together, we're confident we can leverage what each party has to offer."

It will mark the first time the two agencies will collaborate on clients other than Nissan, but Wenzel and Ochiai are confident they can pull it off. Even though Japanese and Western agencies tend to be different beasts, TBWA and Hakuhodo believe they share a philosophy and culture. Wenzel says: "We both harbour an ambition to bring disruptive ideas to our clients and behave proactively." Ochiai adds: "TBWA\ Hakuhodo's mission is to create a better future together."

That should keep the crystal-ball-gazers happy.

Japan report, page 30.

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