In emerging economies, the growth of the advertising market is still achieved. China will be at 7%, even 8%, and India will be 6 or 7%…”, According to the forecast of Maurice Lévy, chairman of the French advertising group Publicis, the world advertising market in 2009 will be at best zero or possibly negative.
However, advertising in Asia is still growing. In an interview published in La Tribune on December 8, Mr. Maurice Lévy elaborated: “We expect a decline in the US and in Europe, with major difficulties in Spain, the UK, Germany as well as in France. In Eastern Europe, we expect positive figures.”
Regarding emerging economies, Mr. Lévy believes that the growth of the advertising market is still achievable. “China will be at 7%, even 8%, and India will be at 6TP3T or 7%,” he said. However, Latin America still has many unknowns: the advertising market in Brazil may stagnate, while Argentina will face many difficulties. In the Middle East and Africa alone, advertising growth is likely to remain at double digits in 2009. When asked about the possibility of concentration in the advertising sector due to the impact of the crisis, Mr. Lévy replied that the market is already too concentrated, and even if it were, it would not change things fundamentally.
Publicis recently agreed to acquire W&K Communications, an advertising agency with offices in Beijing and Guangzhou, for an undisclosed amount. W&K Communications has nearly 100 employees and works primarily with local clients such as Air China and Tsingtao Brewery. Meanwhile, South Korea’s largest advertising agency, Cheil Worldwide, agreed to acquire 49% of shares in Beattie McGuinness Bungay, a London-based agency, to expand its operations overseas. Cheil is controlled by Samsung.
Group M, a media company part of the WPP Group, said that advertising spending in the Asia-Pacific region will increase by 61% to 30% in 2009, while it will decrease by 1% to 21% in Western Europe and North America. Growth in China and other Asian markets has become a priority for leading Western advertising companies, including Publicis, WPP, Omnicom Group and Interpublic Group. Publicis said that W&K Communications will likely become part of the Leo Burnett company that Publicis already owns.
For many Asian ad agencies, the leap forward has been difficult to achieve in isolation. Like Dentsu and Hakuhodo in Japan, Cheil is among the world’s largest, but it is largely a domestic player. In recent years, the companies have tried to expand overseas. Dentsu, for example, hired former NBA player Tim Andree to help it grow in the United States. Last month, Dentsu agreed to buy Mcgarrybowen, a New York-based ad agency that works with clients including JPMorgan Chase, Hewlett-Packard, Kraft Foods, and Walt Disney.
Cheil aims to break into the world's top 10 advertising agencies by 2010, after climbing to 16th place in 2006, according to Advertising Age. Earlier this year, Cheil hired Bruce Haines, a former head of Leo Burnett in London, to oversee international growth. The undisclosed purchase of Beattie McGuinness Bungay is the first major investment under Haines. In 2009, Haines said Beattie McGuinness Bungay might open an office in New York. Offices in Singapore and Latin America have also been targeted, with no specific dates set.
Publicis and Cheil's investment in expanding their influence reflects the growing influence of the advertising industry in Asia. Ogilvy & Mather, a company owned by WPP Group, has appointed Singaporean Tham Khai Meng as its global chief creative officer, the first time a leading Western advertising agency has chosen an Asian for the role.
According to TBKTSG
