New study reveals a trend towards longer term client-agency relationships in the Asian market

 

The results of a new study published in the latest edition of Campaign Asia, highlights some interesting issues in the evolving nature of client agency relationships in that market, for example:

The rise of the Asian advertising market has forced higher levels of professionalism:

"... speed, efficiency and effectiveness have become even more critical for us to succeed in these challenging times." Andrew Kiger, Coca-Cola, China.

However, due to the pressures of the financial crisis, agency turnover is high as clients seek better returns in shorter timelines:

* the R3:GC study cites the average creative agency relationship in China is 2.5 years compared to 3.6 in India and 6.8 in Europe and the US.

Despite this, there is wide recognition of the benefits of longer term relationships:

"Always the benefits of a strong client agency relationship are in getting the best work that is creative, beautiful and brings a new level of insight and intelligence to the strategy", says Ellesha Kirby from Johnson & Johnson. 

Procurement is now involved in the buying process, a mirroring a trend already apparent in other larger advertising markets, apparently up by 40% in China over the past 2 years.

A reliance on the old commission based remuneration system, particularly in China for example is slowly changing but is perhaps hindering moves to longer-term agency relationships based on more contemporary methods of payment.

Some of the recognised global leaders in advertising are leading in Asia - P&G and Coca-Cola for example are companies investing in long-term agency partnerships to secure better agency talent, marketing brains and great ideas via total immersion in the brand challenges.

On the idea of immersing agencies in brands, Paul Pi, VP Marketing at addidas Greater China says clients " ... could do a lot more to really engage their agency partners into the company's strategies and business goals".

Adding "Long term relationships allow us to better understand each other's strengths and weaknesses. Agencies and clients can concentrate all their efforts on identifying challenges and finding solutions."

Sounds like Asia has a little way to catch-up with the client-agency management best-practices of other markets, but skilled practitioners in leading client organisations and agencies are clearly driving rapid change helping the industry both grow and mature.

Author: VJ Ratnam (Decideware)