The World: Thai ad industry finds strength in consensus

Thailand's Buddhist culture means the trade body's philosophy of co-operation and tolerance works, Mark Johnson reports.

Picture this: an advertising trade body with real power, and influence to change the way clients and agencies do business. European ad industry associations can only dream of such strength, but the Advertising Association of Thailand may be the first to achieve this Holy Grail.

Take the AAT's involvement in a recent pitch debacle; after a protracted review involving ten agencies that began last summer, Krung Thai Bank's £3 million creative account went to Saatchi & Saatchi without a pitch.

Saatchis' decision to work for Krung Thai Bank caused some concern, because it appeared to break with a ruling from the AAT.

The AAT demanded Krung Thai Bank pay the body's £1,500 pitch fee to all ten agencies involved in the review, a stipulation it introduced for all private sector Thai companies 18 months earlier.

The bank refused to pay the fee on the grounds that it is 51 per cent government-owned. The case had to be taken to the country's administrative court to obtain a verbal ruling to clarify that it was, in fact, a private organisation.

At this decision, the AAT put its foot down and held a meeting between the agencies before informing the bank that the agencies would not pitch in the absence of a fee payment. The bank then shelved the review.

But, in a decision that unsettled the AAT, Saatchis went ahead on the account, sparking the AAT's president, Chaipranim Visudhipol, to call for the agency to resign its membership of the trade body at that time.

From the outside, the entire episode appears to be a demonstration of the might wielded by the trade body that represents one of the hottest creative centres in Asia, one that last year delivered Cannes gold Lion-winning ads such as BBDO Bangkok's "worm" for Unif Green Tea.

But, from the local industry's own perspective, the distribution of power and strength is difficult to pin down.

Mark Ingrouille, the McCann Worldgroup president and chief executive, provides a cultural context that goes some way to explaining the client-industry relationship in Thailand.

"Thailand is a Buddhist country. The head of state is the king and Thailand has never been colonised by a Western power," he explains. "As such, its customs and mores are quite unique in this region.

Decisions on any matters tend to be consensus-driven. The word 'Thailand' itself in Thai means 'free people'. Buddhism teaches tolerance, patience and forgiveness as virtues above strength or power."

It is this consensus-driven culture that led to the formation of the AAT, a body that aims to bring the industry together.

"In itself, the AAT has very little power," Ingrouille says. "It is established not as an American Association of Advertising Agencies or equivalent; it is not a self-regulating body nor a standardising body. It is more a debating and information exchange association that facilitates discussion among the main advertising and media agencies of Thailand."

Visudhipol, who is also the chairman of TBWA\Thailand, says the AAT's guiding philosophy is not one based upon building a power base in the industry, but on understanding and co-operation - an idea that is entirely alien to many other markets.

"It is not a question of authority, but a matter of unity, bonding and shared community interest we have between ad executives in this country," he says.

This appears to have been one of the most important achievements of the AAT, according to the BBDO Bangkok chief executive, Decha Tangpanitansook, who says: "The AAT has done a great job in the past three years in building unity in this industry. This is the first time that all the leading agencies have joined hands to protect the advertising industry.

"There have been regular agency head meetings to get all agencies to become closer. This allows agency heads not only to get to know each other better as friends, but also to share thoughts on issues and opportunities facing the industry."

The approach also appears to be winning supporters in other South-East Asian markets, where there are plans to begin the process of introducing AAT initiatives such as the pitch fee.

Visudhipol claims the AAT's counterparts in Singapore and Malaysia are mooting the introduction of the pitch fee in the near future, an initiative intended to cut down on the number of agencies called to pitch and to stop clients taking great ideas presented in pitches and giving them to another agency.

For Ingrouille, although Thai business culture is consensual, there is a clear power structure.

The weakness in the AAT's armour, he argues, is the fact that "it is totally reliant on agencies holding together. In the case of Krung Thai Bank, the client manoeuvred one of the agencies (Saatchis) to a position where it had to accept the brief, despite knowing it was effectively pitch-fee avoidance."

Essentially, Ingrouille says, power comes from strength in size and personal relationships or hierarchy. "Most power in the industry lies with the main agencies and with a small number of the largest clients," he says.

Perhaps in the continued interests of the status quo, Visudhipol has even said he accepts the legitimacy of Saatchis' acceptance of the Krung Thai Bank account.

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