Will Cheil's reputation be enough for BMB to stake a claim in Asia?

BMB was launched in 2005 by Trevor Beattie, Andrew McGuinness, and Bill Bungay. The sale to Samsung’s in-house agency Cheil sparked controversy, not least because of the breakdown in talks of a possible sale and tie-up between the UK-based agency and Omnicom’s TBWA. The subsequent sale of a 49 per cent stake in one of the UK’s hottest creative shops to the unfashionable Cheil raised more than a few eyebrows.

The sale price aside, the advantages for both Cheil and BMB were clear. Just two months after pen was put to paper, BMB was busy working on accounts for Samsung. But how Cheil would leverage BMB globally was another matter altogether, particularly how the new acquisition would broaden Cheil’s portfolio of non-Samsung clients. Cheil’s global chief Bruce Haines said at the time that he wanted to turn BMB into a micro-network; and for this to happen, an Asian presence would be crucial.

In terms of doing its homework in Asia, Cheil seems to have applied due diligence. Haines says he is fully aware of the implications of launching yet another agency brand here, hoping that BMB can become a “bigger BBH”.

He is also mindful that BMB should not act like just another “top-heavy” global advertising agency network, instead being nimble enough to catch on to the rapid changes in this region.

So will the arrival of another boutique-style agency give the multi-national advertising networks a run for their money? Michael McLaren, regional director for Asia-Pacific at McCann Worldgroup, feels a lot has to change if this is going to happen.

“As I’m sure they’re well aware, it’s not as simple as just opening an office and hanging out a shingle,” he says. “Many of our markets have an oversupply of agency solutions available to marketers. So the competition is always going to be fierce.”

Marc Gough, chairman and founder of Red Brand Builders, says that compact agencies should be looking at areas such as digital marketing, brand development and consulting. “Most boutique agencies are strong in at least one area where the big players are weak and this allows them to get onto the agency roster of a big multi-national client.”

Chris Jaques, Asia CEO of M&C Saatchi, warns that the likes of BMB need to be cautious in how they approach the region. To have staying power, he feels they are still dependent on a big client or a famous brand. Jaques points to BBH as a prime example, given the agency’s expanded remit of global clients in this region, including Unilever (regional Surf account), Coca-Cola (Sprite and Minute Maid) and Diageo.

Other creative outfits such as Wieden & Kennedy, Creative Juice and iris have also ridden on the back of key clients like Nike, Nissan and Sony Ericsson respectively.

“Without these global clients, none would have worked,” says Jaques. “You need an anchor client to be a major player. If you’re not a major player, you can’t win the big accounts. And if you have to survive on scrapping for small local projects, you’re dead.”

Industry comments

Charles Wigley, chairman of BBH Asia: “As the Asian market gets more sophisticated and economically attractive, it’s inevitable that more international boutique agencies will come in. Likewise there will probably be more quality local start-ups - all of which I would regard as a very good thing.

The status quo needs shaking up and the arrival of smaller agencies will only improve the quality of the industry. Boutique agencies will introduce a level of nimbleness and bravery that the market needs.

It’s worth bearing in mind that all big shops started small. Just 25 years ago, BBH in the UK was a very small boutique outfit. It has come a long way since and is now one of the biggest agencies in London.”

Michael McLaren, regional director Asia-Pacific at McCann Worldgroup: “Whichever market boutique agencies look at, it is important that they understand what it really means to be local. In developing communications in Asia, language, nuance and cultural symbols are important.

The best way to win in any environment is to provide clients with a capability that they don’t think they can get elsewhere. I would therefore advise boutique agencies to really interrogate their product and ensure that they’re going to deliver something truly unique. Given the fact we are seeing more project-based assignments (versus true AOR appointments), if boutique agencies have the talent and the tenacity they will get their chance.”

Ian Milner, global CEO of iris Worldwide: “The markets are more and more defined by what you can deliver rather than by reputation or scale. This is of course perfect for more innovative, more integrated and more flexible agencies that are more ‘client-centric’.

Boutique agencies undermine and challenge the big boys because of their ability to change. The big networks will almost certainly ‘throw money at the problem’ as a way of damage limitation, and they’ll continue to ‘buy growth’ and buy their way to relevance via bringing in more motivated and entrepreneurial talent.

Good boutique agencies will always tend to outgrow the market, making them attractive to bright and ambitious clients.”

Chris Jaques, CEO Asia at M&C Saatchi: “Boutique agencies are more focused on results than bureaucracy. They tend to be one business, one P&L, focusing on their clients first. They are better at providing media-neutral solutions because they don’t have separate divisions fighting for their share of client budgets. They are faster since they provide greater access to the top people, and they don’t have the silos and the processes - work comes out quicker and, very often, better.

Boutique agencies are more cost-effective. They have to pay for less overheads, work more efficiently, and they deliver more appropriate solutions faster. That means that boutique agencies are - quite simply - better value.”

This article was originally published in the 11 March 2010 issue of Media.