Magazine article Marketing

Cuts Hit Hong Kong; Nearby Asian Boom Saves Some

Magazine article Marketing

Cuts Hit Hong Kong; Nearby Asian Boom Saves Some

Article excerpt

Cuts Hit Hong Kong

HONG KONG: Mark Jones gets straight to the point when asked how Hong Kong's ad industry fared during 1991.

"I think it's a year better forgotten," he says.

He should know.

As director of advertising at the Wright Company, a Hong Kong-based management consultancy and advertising headhunter, Jones can gauge the health of the industry by the number of professionals who come to him looking for jobs.

Whenever an ad agency goes out of business or there are major staff cuts, Jones' phone starts ringing.

"On the whole, it's been a very tough year," he says. "Certain agencies that did exist this time last year don't exist anymore. There have been major layoffs by some of the large agencies as well.

"It started off very badly with the war in the Middle East," he says.

"A lot of clients out here, particularly at the luxury end and travel-related clients, immediately stopped spending money during the first quarter.

"And I don't think they caught up in terms of spending this year."

At least four Hong Kong advertising agencies closed their doors in 1991, including Amdur Tobin Momentum, Medicus Intercon, Peter Partnership and Communication Plus.

Others laid off employees. BSB Hong Kong, for example, pared its staff down by 10%, to 110 employees.

Even Dentsu Young and Rubicam, one of Hong Kong's top 10 companies in terms of billings, is hurting after losing several major clients, including a $9-million Hong Kong Tourist Association account and a $3-million Remy Nicholas account.

But not everybody is suffering. The introduction of a new satellite television network aimed at Asia's rapidly growing and affluent middle class, Hong Kong-based STAR-TV, has begun to open new doors for advertisers and innovative ad agencies.

DDB Needham has picked up STAR-TV's $9.1-million account following a tough fight with competitors Ogilvy and Mather, Leo Burnett and BSB.

Despite the hard times, other agencies, such as Saatchi and Saatchi, actually managed to increase billings in 1991 by pulling in lucrative accounts from the Peninsula Group and Toyota.

Hong Kong admen managed to cushion the blow by expanding business in Asia's emerging industrial powerhouses. …

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