Japan's ad agencies expand operations
Japan's ad agencies expand operations
SEOUL (Reuter): Advertising agencies from Japan and other parts of Asia are expanding operations around the region, creating increasingly tough competition for big Western-based groups, industry experts said yesterday.
Tokyo-based Dentsu Inc, the world's largest independent advertising agency, had its eyes on the rest of Asia, according to Dentsu executives attending the International Advertising Association's global conference in Seoul.
"The future for the Japanese (advertising) agencies is across Asia," one Dentsu executive told Reuters.
He said advertising expenditures in Japan rose five percent last year after a five-year stagnation and expected even stronger growth in 1996.
"We are relieved, of course, after the bad years," said the executive, who declined to be identified.
Dentsu dominates Japan's advertising industry, which is the second biggest in the world, after the United States.
Another Dentsu source at the three-day conference in Seoul said the agency was increasing the size of its offices around Asia and getting more business as a result of expansion in the region by its corporate clients in Japan.
The source said Dentsu, which handles a lot of advertising for U.S.-based Phillip Morris cigarettes in Japan, now also did much of their advertising in the Philippines, Malaysia and South Korea.
"Dentsu understands markets in Asia better than the Western agencies do," he said.
The head of the Korean Advertisers Association, Chun Ung-Duk, said South Korea's advertising industry, Asia's second biggest and the 10th in the world, was following a similar pattern of growth to Japan's years ago.
"There's been a tremendous development in advertising," he told reporters yesterday.
Chun said advertising expenditures in South Korea, which have risen by 20 percent a year in recent years, totaled 5.2 trillion won (US$6.5 billion) in 1995.
Diamond Ad Ltd, an advertising unit within Hyundai, one of South Korea's four giant conglomerates, said its billings soared by 58 percent in 1994 and 88 percent in 1995.
"We are doing more and more outside Korea because we see a need to expand advertising overseas," Diamond's president, Chae Soo-Sam told Reuters in an interview.
A delegation from the advertising conference met with South Korean President Kim Young-Sam in Seoul on Tuesday, a conference organizer, Kim Myung-Ha, told reporters.
He said the president asked Martin Sorrell, chief executive of WPP Group Plc, the world's biggest advertising and marketing group, how he saw the future of advertising in Asia.
Sorrell described Asia this week as the world's fastest- growing and most important advertising market.
Pamela Dunn, the managing director of CIA Pacific Ltd, a part of Britain's biggest media independent, which plans and places media advertising, said growing prominence by Asian advertising agencies was making things tough for outsiders.
Several national advertising agencies formed a network called Asia Link Advertising this year to help them compete with Western-based global agencies that have traditionally dominated the region's advertising scene.
The network has agencies from Japan, South Korea, Hong Kong, Taiwan, Singapore, India, the Philippines and Malaysia.