Business

Saturday July 25, 2009

Grey Group KL on fast-track expansion

By LEE KIAN SEONG


MARKETING communications agency Grey Group Kuala Lumpur (Grey Group KL), in line with its parent company’s plan for expansion in Asia, is looking for possible acquisitions in Malaysia.

“There are two types of discipline that we are looking to acquire locally: public relations (PR) and digital creative,” says chief executive officer Nicky Lim during the interview with StarBizWeek.

Nicky Lim... looking to acquire PR and digital creative

He says the company is talking to a few local parties currently, but it will take time to finalise the deals.

“It is like getting married – we have to feel each other out and find out whether our cultures are compatible and complement each other. The synergy between two companies is important,” he says.

The acquired companies will be absorbed into Grey’s existing PR and digital units.

The intention of pursuing acquisitions is to expedite Grey Group KL’s growth further and bring the group to the next level.

The company is interested in acquiring a PR agency given that the demand for PR services is growing as clients are beginning to understand the role of PR.

“PR is not about just crisis management; it is influencing the perception about the brand,” he says.

Lim points out that digital advertising is gaining popularity in Malaysia and one of the company’s targets going forward is to enlarge its digital business.

“We also plan to set up offices in Johor Baru and Kota Kinabalu in two years,” he says, adding that the company has had an office in Penang for two years.

Grey Group KL, set up in 1986, is one of the largest marketing communications agencies in Malaysia. It currently has a staff of over 300 with 14 nationalities compared with just 180 people in 2007.

Grey Group KL is a wholly-owned subsidiary of the US-based Grey Group, which in turn is a wholly-owned subsidiary of Nasdaq-listed WPP Group plc.

Grey Group registered a total revenue of US$1.18bil last year. The Malaysian business contributed more than 50% to the South-East Asian business last year.

What is the direction for Grey Group KL?

“Our strength is in offering total communications for our clients and that is something that we are known for in the market. The direction is still very much within this area and it is about getting more to it and doing a better job now,” Lim says.

He says there are not many agencies in town that are offering such a holistic approach in communications.

There are two brands under the company’s umbrella, Grey and G2.

Grey is in charge of brand consultancy/advertising, which creates desire, delivers the big ideas, and creates new brand possibilities.

G2 is the part to activate the desire from the big ideas and getting consumers to respond to the communications, which includes activation marketing, digital and interactive services.

Last year Grey and G2 contributed almost equally (50%) to the group’s revenue.

Grey’s regional clients include British American Tobacco, GlaxoSmithKline, Sara Lee and Procter & Gamble. Local clients include DiGi, Perodua, Maybank, Ribena, Kiwi and LG.

Within the group, there are many joint clients and also individual clients for its advertising, digital and activation businesses.

“We have a very young and energetic management team here with an average age of 36 and our main concern is to accelerate the brand potential and ideas,” he says.

Lim says the group has one of the largest dialogue with consumers in Asia – Eye on Asia, a survey that is coming to its fourth year.

It is a survey that covers 16 countries in Asia, run by the regional planning team of Grey Group.

“The research helps in creating effective communications for our client’s brands. We will try to find a connection on that to the brands that we are managing and use it to get closer to the consumers,” he says.

“We want to be in the forefront to tell the market what is the coming trend.”

As digital advertising is an important advertising tool nowadays, Lim says the business is one of the growth areas going forward and it can be used across all categories as it covers every spectrum of consumers.

“We are not saying that the traditional advertising should be ignored as the discipline is still there, but it needs to be complemented with something that is more current; that is why digital is very important,” he elaborates.

He says engaging the digital world for its client’s brands is very high on its priority list. It includes websites and campaigns that use social networking to advertise.

For example, Tiger FC has one of the largest Facebook campaigns as members can get the information about the upcoming activities, promotions in stores and in touch with other members through digital platform.

Grey Group KL’s digital business registered double-digit growth in the last three years and it is expected to experience the same growth this year.

When asked on whether Grey Group KL is experiencing any slowdown in sales due to the weak market sentiment, Lim replies by saying that the majority of its clients are maintaining their budgets and a few of them are actually increasing it.

“Bear in mind that we are providing total communications solutions, not just advertising. Even if the company cuts down its advertising budget, perhaps it might want to invest more in promotion, for example, and we have an activation arm to suit their needs,” he adds.

On the small and medium enterprises (SMEs) segment, Lim says the segment is currently contributing very minimally.

“A lot of Malaysian SMEs nowadays are beginning to go regional. With that, they will need a proper branding support and this is where the business comes in,” he says, adding that SMEs segment is one of its growth pillars.

The group expects double-digit growth this year. “We are fortunate that we have multiple pillars so some areas will have higher growth to compensate the lower performance segment during the crisis.

“Clients want for more value from their agencies nowadays, in term of stretching the dollar spent,” he stresses.

  • E-mail this story
  • Print this story