Business

Saturday February 7, 2009

Being a good partner matters to Ogilvy & Mather

By LEE KIAN SEONG


OGILVY & Mather Malaysia does not expect sales to be as robust as the average 16%-17% chalked up over the past five years, says group managing director Zayn Khan. However, he is confident that its reputation as a “good partner, especially during recession” will hold it in good stead. “We are a good partner ... we are very focused on effective communication and work closely with our clients.”

“Business growth will be supported by our digital, retail and trade marketing and public relation businesses,” he tells StarBizWeek in an interview.

Its digital arm, which is one of the group’s fastest growing businesses, is still expected to maintain its momentum despite the economic slowdown. “We are still expecting our digital business to outgrow the other business this year.” He attributes that to rising broadband penetration in recent years and the fact that clients are generally investing in digital advertising.

He points out that there are useful channels in digital advertising that are useful such as You Tube, Blogger, search engine and mobile phone but the necessity of digital advertising investment will depend on the target market.

»The market understands it (branding awareness) better nowadays« ZAYN KHAN

On whether he expects ad spend to drop this year in light of the uncertain economic environment, Khan admits that while clients are generally holding back their budgets, some may increase their expenditure. “Most of these companies are fairly large and are run by experienced marketing people who realise that spending should continue, even during a recession,” he says, adding that certain clients may shift or redistribute their budget, which means that the overall budget will still remain the same.

Khan points out that the advertising agencies these days are a lot more resilient as they have diversified their business portfolio and with that, will be able to better cushion any adverse impact of a downturn. But he admits that small firms, naturally, who depend on a few clients, may find some difficulties in the current environment.

Meanwhile, Khan notes the growth of branding awareness in Malaysia which is much better than five or six years ago.

“The market understands it better nowadays and realises that branding is not just about a logo and a campaign. It is actually an important financial asset that needs to be nurtured and developed for the long run.”

So, does he expect clients to face difficulties meeting their financial commitments for ad spend? To mitigate the risk, Khan says the company would consider its client’s financial position and ability to fund the marketing exercise before proceeding to seal the deal, and this more so, if they are small companies.

“We will go for due diligence to make us feel more confident and requests for deposits in certain cases, just to make sure there is commitment,” he says. As it stands now, he doesn’t think small companies have an issue with having to fork out a deposit.

The company has about 260 employees in Malaysia and has no plans to lay off staff.

Based on group head counts, Ogilvy & Mather Malaysia is the largest advertising agency in Malaysia. Clients include Maxis, Malaysia Airlines, CIMB Group, Guinness Anchor Berhad, Nestle (M) Bhd, IBM, DHL and Pizza Hut.

Its parent company Ogilvy & Mather Worldwide is a subsidiary of Nasdaq-listed WPP Group plc.

  • E-mail this story
  • Print this story