WPP’s Sir Martin Sorrell said recently that China would account for about a third of worldwide advertising growth this year, no more than you would expect with economic growth in China slated to come in at just under ten per cent this year, and that’s with the Chinese government putting the brakes on.
The US, by contrast, has seen growth drop in the latest quarter to just over two per cent from 3.7 per cent and Europe as a whole will be lucky to average two although Germany appears to firing away on BMW-type cylinders. Ad growth forecasts are some way above these but that’s in comparison to an absolutely disastrous 2009.
So the big marcoms companies, Omnicom, WPP, Publicis Groupe and Interpublic, are all betting on China and other Far East markets too. And they’re able to because they own most of the big agencies there (and consequently big clients).
But such colonialism is hardly the case in other markets. Media maybe but certainly not banking or energy or manufacturing. Even in media China’s Baidu is the biggest internet company there although it gets some help from the Chinese government’s regular spats with Google.
Chinese banks are among the world’s biggest although they still have only a small presence outside their home country. But that will surely change.
But there is no sign, to date, of an Asian ad agency or marcoms tiger capable of harnessing the huge growth in the regional market to challenge the US, French and (technically) Irish (WPP).
It’s not even as though such a company would need to set out to conquer the world, there’s quite enough growth in Asia Pacific to build a world-beater in terms of revenues and profits.
In Japan Dentsu and, to a lesser extent, Hakuhodu have built huge businesses but have both found exporting the Japanese way difficult if not impossible, even though they’ve proved remarkable successful at keeping Westerners out.
But it must surely be tempting for the managers of these Asian agency businesses, wherever they come from, to go it alone and build their own companies rather than spend their life propping up their slow growth economy owners.
In a region stuffed with entrepreneurs it’s little short of amazing that we have so few in what is supposed to be one of the most entrepreneurial businesses of all.