Global Rankings 2010: Asia-Pacific Market Profile
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Global Rankings 2010: Asia-Pacific Market Profile

Asia-Pacific observers hoping that the region’s reputation for boom and bust business cycles might have been laid to rest had some reason for encouragement in 2009.

Holmes Report

By Arun Sudhaman

Asia -Pacific observers hoping that the region’s reputation for boom and bust business cycles might have been laid to rest had some reason for encouragement in 2009.




Despite running headlong into the worst of the recession in 2009, the region’s PR outlook was not uniformly bleak. Pockets of growth existed, with many firms reporting that client budget cutbacks lacked the severity of previous downturns in 2003 and 1998.

Excluding Sarbanes-Oxley agencies and those agencies that did not report figures, the region’s biggest PR firm in 2009 was Japan’s PRAP, which bucked difficult conditions to growth revenues by nine per cent. Now worth almost $50m, PRAP’s relatively prosperity was, admits agency president and CEO Satoshi Sugita “better than expected.”

“We had a belt-tightening policy and scrutinized our expenses,” he adds. “Overall performance was not very good but I haven’t heard of any PR firm going bankrupt in Japan.”

Former PRAP CEO Ross Rowbury, who made a high-profile move to Edelman earlier this year, notes that corporate and financial were particularly hard hit in Japan, with consumer and product PR faring better thanks to the unwillingness of large consumer brands to make slash spend.

Two other trends also helped bolster public relations spend in Japan. The first is the increasing credibility of social media, thanks to the huge impact of Twitter. The usage of real names, coupled with the amount of information that can be communicated in 140 Japanese characters, means that Twitter penetration in the country now outstrips the US.

The second development was the growth of ‘strategic PR’. “In the economic downturn clients began looking for more effective marketing methods than mass advertising,” says Rowbury. As marketing departments began looking to PR, a new phrase – ‘senryakutekiPR’ – was used to distinguish their efforts from those of their peers in the PR department. “While what the PR companies are delivering is not different this new sub-segment of PR is allowing PR agencies to move from their traditional PR department client base and into the marketing department.”

Despite these developments, growth remains flat in 2010 says Sugita, with only marginal improvements expected in 2011. Rowbury, though, is bullish – pointing out that local firms will enter a period of consolidation as they move from implementation towards strategy and confront the realities of generational change. This will present opportunities for global firms, he adds, while the holding groups likely to take an increasing interest in acquisition.

One other reason for PRAP’s strong performance lies in its impressive operations in China. In that country, of course, economic growth was not knocked off course in the manner of neighbouring economies, perhaps explaining why the country’s biggest agency – BlueFocus PR - was able to grow by a solid 12 per cent.

BlueFocus CEO Oscar Zhao has good reason to be happy with his agency’s performance in 2009. While international firms suffered from spending cuts by MNC-dominated client bases, BlueFocus’ serene progress culminated in a highly successful stock market listing in early 2010.

In 2009, the agency capitalized on continuing domestic client activity, with digital, automobile and consumer products all catching the eye. “More and more enterprises are paying attention to PR and putting more
effort and resources into it,” says Zhao. 2010, meanwhile, has already been bolstered by significant marketing
activity around the Shanghai Expo. While the automotive sector is expected to slow, digital remains a major driver of fee income and – adds Zhao – is rapidly being joined by investor relations.

North Asia’s big economies may have withstood the economic pressure better in 2009. In Korea, the standout performer was KPR, which grew by almost 37 per cent thanks to a strategic reorganization the year before. In particular KPR focused on three areas: international, public affairs and digital PR, with the latter category also fuelling the expansion of an online visual content team.

Given the ubiquitous nature of internet penetration in Korea, and the overwhelming popularity of social networking sites, KPR’s strategy proved successful. The agency also saw improvements in issues management and CSR projects. KPR senior consultant James Morris believes that the market’s increasing specialization, favouring such areas as healthcare, education and social media, is good news for the PR industry. “With increased specialization, major firms are outsourcing PR activities more frequently.”

While the traditional PR hubs of Hong Kong and Singapore had relatively quiet years in 2009, Indonesia continued its emergence as a PR market to watch. Fortune PR impressed with growth of 20 percent, making it the largest independent Indonesian consultancy in the rankings.

Fortune MD Indira Abidin puts this growth down to the improved understanding of the importance of PR in Indonesia, coupled with solid economic growth. The country is an issues-rich environment in which social media has begun to play a critical role. Specific growth areas included infrastructure, healthcare and digital.


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