Brand-new challenge for advertising chief
With Omnicom heavyweight Michael Birkin's move to Asia, hard sell is under way to lift the profile of group agencies
MICHAEL BIRKIN IS an enthusiast for the power of brands. 'I love brands and believe in them,' declares the vice-chairman of Omnicom, the world's largest advertising group. 'They are amazingly good value for money.
'Having a brand means you don't have to articulate the merits of a product every time you sell it. A successful brand is about the ability to excite people, create trust and generate loyalty. That makes for an enormously valuable asset.'
Mr Birkin's belief in the importance of brands in business is no surprise. As chief executive of Interbrand, he established the marketing company as the world's leading brand consultancy before selling out to Omnicom in 1993.
Since then, he has used his expertise in client branding to lever himself all the way to the vice-chairman's office at the Madison Avenue giant; no small achievement for someone who has never worked on the creative side of the advertising business.
Now the 46-year-old Englishman is facing the toughest challenge of his career: promoting Omnicom's own in-house brands to clients in Asia, where the holding company came late to the party and lags sadly behind its principal competitors. Omnicom is the world's largest advertising and marketing services company by sales, with revenues of US$9.75 billion last year. But outside its core markets of North America and Europe, it ranks a dismal fourth. In the world's fastest growing markets, last year Omnicom managed barely half the sales of arch-rival WPP.
That is not to say the company is a minnow in Asia. Mr Birkin points out that Omnicom has some 7,500 employees in the region, more than 100 offices and more subsidiaries than he can easily count. Omnicom's TBWA advertising agency is well established, with major clients including Nissan. But the holding company's two other main agencies, BBDO and DDB, have less of a presence.
And, critically, the group as a whole lacks the heft of its rivals. That message was brought rudely home last year when two of the region's biggest client accounts, HSBC and Samsung Electronics, were snatched by the No2 advertising holding company, WPP. That success, believe many in the advertising industry, was helped considerably by the propensity of WPP group chief executive Sir Martin Sorrell to parachute in and lend his personal weight to client pitches.
Mr Birkin's job is to redress the balance. In January, he was appointed as Omnicom's president and chief executive for the Asia-Pacific, based in Tokyo, the first time the New York-based holding company has despatched such a senior executive to the region.
The stakes are high. Some observers believe that if Mr Birkin can succeed in grabbing a greater share of the fast-growing Asia-Pacific advertising market for Omnicom companies, he could catapult himself ahead of his internal rivals and clinch the post of chief executive of the whole Omnicom Group when supremo John Wren retires.
That would be an impressive coup. For a major player in an industry famous for its flamboyance, Mr Birkin comes across as remarkably restrained. He is elegantly, though soberly dressed. When he talks, he speaks quietly, picking his words deliberately, with none of the hyperbole and jargon in which advertising executives so often indulge.
And he's surprisingly modest. 'I don't really know what my primary skill is,' he admits. 'I suppose I am a good businessman. I know what it's like to build a company from scratch and I know what it's like when things are not going so well. So I can relate to a lot of executives and add value to the process they are going through.'
There is nothing diffident about the way Mr Birkin has thrown himself into his new job, however. Last week, Mr Wren told Wall Street analysts that he had approved a list of 10 companies put forward by Mr Birkin as acquisition targets since his arrival in Asia.
'Having a senior holding company representative in the region enables investment decisions to be made faster and with more focus,' explains Mr Birkin. 'And quicker decisions mean faster growth.'
Even so, Mr Birkin insists that Omnicom is not in the business of buying companies simply to grow revenues. 'We want to be the best, not the biggest. Our focus is on recruiting talent first and foremost. If we have to acquire companies to acquire talent, then fine; just as long as we are not acquiring in order to get big.'
Other advertising holding companies have tried that, says Mr Birkin, and the jury is still out on whether the strategy can succeed in the long term. In some markets, for example India, he plans to hold off from making purchases. 'I don't think the prices being discussed are realistic,' he says.
Mr Birkin's other main job is to generate more business from existing clients in the region. With about 170 subsidiaries worldwide, Omnicom companies encompass almost every aspect of the advertising and marketing business, from creating advertisements and planning campaigns, through to buying media space, market research, direct marketing, public relations and customer relationship management. In the past, however, the group's approach has been fragmented and its companies have failed to co-ordinate as well as they might have done.
'We can handle any of our clients' needs in any market in the region,' says Mr Birkin. 'My first task is to make sure our clients are fully aware of our range of services. That alone will generate growth.'
But although he is spending much of his time meeting customers, Mr Birkin insists he is not going to get involved in pitching for accounts in the style of WPP's Sir Martin. 'I'm not here to make headlines by landing Omnicom a big piece of business,' he says. 'Our approach is to let our in-house brands do the talking. It's not a turn-on for the client to have someone from the holding company suddenly turn up at a pitch. It undermines the stature of the senior people already handling the business, which is not a sustainable strategy in the long term.'
Naturally, expanding Omnicom's businesses in China is a critical element of Mr Birkin's plan to win market share in the region. Next month, the holding company will open an office in Shanghai to complement its existing subsidiary offices and Mr Birkin intends to spend one week in every month in the country.
But unlike many industry executives, Mr Birkin does not believe new techniques, such as targeted internet marketing and special events, will eclipse traditional advertising in coming years. Instead, he stresses the primacy of the old-fashioned ads you see on television or roadside billboards. 'Traditional advertising will remain our biggest single business,' he says.
He acknowledges that electronic marketing and what he calls 'brand activation': one-on-one marketing and events designed 'to enable people to get the touch and feel of brands' will become more important. But ordinary advertisements will still be crucial.
'I believe to my core that traditional advertising is the best way to build a brand,' Mr Birkin says. 'It gives you a way to create a story and an image. The other activities are all vital, but they are useless if there is no image.'
It is a belief that plays to Omnicom's strengths. According to Mr Birkin, the group's greatest advantage over its rivals lies in its strength in creating ordinary, old-fashioned advertisements for clients.
'We are the most creatively focused of the holding companies, and creativity is the most important thing in this business,' he says. 'The best ideas are never going to die.'
Michael Birkin, 46, is vice-chairman of Omnicom, the world's largest advertising group. He was formerly chief executive of Interbrand. The marketing company was sold to Omnicom in 1993.
In January, Mr Birkin was appointed as Omnicom's president and chief executive for the Asia-Pacific region, based in Tokyo. He is the most senior Omnicom executive to be sent to the region, where the United States-based group lags its international rivals.