Business

Saturday July 31, 2010

Spencer Azizul on the mend

By M. HAFIDZ MAHPAR
hafidz@thestar.com.my


LIKE for many other advertising agencies, 2009 had been a painful year for Spencer Azizul Sdn Bhd. Its revenue plunged about 50%, and this wholly Malaysian-owned agency fell into the red for the first time since 1997.

It had to do major belt-tightening to pull itself through the recession, cutting salaries and other expenses.

Recalls executive director Michael Tang: “We anticipated the economic downturn in August 2008 and in October that year we decided to cut salaries by an average of 20% starting December 2008. And we didn’t replace people who left. We cut our expenses down drastically.”

From left: Ravi Shail, Mohammed Iqbal, Ram Sandhu and Michael Tang with the broadband awareness campaign’s mascot, BB.

The agency has since reinstated (in April) the salaries for its staff numbering 40 people, with a promise that it would pay back their lost income as soon as its cashflow improves.

How difficult was it last year? “Difficult is not the word. It was near impossible!” Tang says. “Somehow or rather, we managed. We improved our collection, so whatever clients owed us over long periods, we were able to collect; and that helped to keep the cashflow moving.

“I think the comforting thing is that we survived.”

The last time Spencer Azizul suffered a loss, it rebounded phenomenally the following year to the point that it was at the same billings level of some international agencies.

This year is not expected to be quite as good for the agency, but still, Spencer Azizul forecasts to double its revenue from last year and to return to profitability.

“It’s still not yet to the 2008 level, but it would be close,” Tang tells StarBizWeek.

In the last nine months, things have been looking brighter for Spencer Azizul, which is believed to be among the country’s top 20 agencies in terms of billings.

According to general manager Mohammed Iqbal, it has had at least two major pitches and two small pitches every month starting from the middle of last year.

“We retained Petronas. We got Uniten (Universiti Tenaga Nasional), the SME Corp Malaysia rebranding project, Harrods and UEM Land (the Symphony Hills project). We got back Faber Properties and Teliti Technologies,” he says.

The biggest win, however, was the Government’s National Broadband Awareness and Promotion Programme, which was launched last month by Information, Communications and Culture Minister Datuk Seri Dr Rais Yatim. It is a fully integrated campaign that the agency won in a pitch against five other agencies.

Tang says that for a short while, the agency made do without a creative director to save costs. But when there were signs that Spencer Azizul was moving up again in mid-last year, it rehired Ram Sandhu for that post.

Ram, a veteran in the industry with some 30 years’ experience, had left the agency five years earlier to be an independent brand consultant.

On why he rejoined Spencer Azizul during the recession, Ram says: “During tough times is when you get to show what you can do. In good times, even a donkey looks like a racehorse. It’s the tough times that separates the men from the boys. And I always did enjoy working here. The place has a certain personality that says we’re here about the work, not so much about pretend glamour that some agencies get into. It’s honest work.”

Early this year, Ravi Shail also joined as joint creative director.

“The last eight to nine months has been good,” says Tang. “Although billings realisation is not there yet, the promise is there.”

The big surprise for Tang is that the agency was ranked 13th overall in the recent Client Relationships and Experiences of Ad Agencies in Malaysia (CREAM) poll of over 350 marketers done by Marketing magazine, making it the only wholly Malaysian-owned agency to make it to the league table.

Spencer Azizul, which began operations in 1985, was ranked right up there with international agencies with 50 to 70 years of history.

“The CREAM result was a real surprise. It’s quite humbling that there is a perception out there that we’re a good agency,” Tang says.

“This year we’re entering our 26th year. The survey actually shows it takes time to establish the credentials and reputation of the company and brand. If you stay there long enough – remain steady – people will start saying this brand is good.”

The agency is clearly on the mend. But Iqbal says it is not resting on its laurels. “We’ll continue to build for the future,” he says.

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