[Independent Agencies' China Problem, Part 1] Without a Soul Figure, Creativity Is Just Talk

The more glorious these "creative hot shops" once were, the more forlorn they look in the Chinese market today.

One day six months ago, nine employees in the Shanghai office of Wieden+Kennedy (W+K) received the same email, telling them to leave the company by 11 a.m. that day.

That is the layoff figure W+K confirmed in an earlier interview with the marketing outlet Campaign Asia. But according to a former employee who spoke to QDaily, about 20 people left around the time of that formal layoff email, nearly a fifth of the entire staff. Most came from the creative and design department or were foreigners, and several were highly paid. The exodus came right after W+K failed to renew its contracts as creative agency for Shanghai Disney Resort and the mobile app Momo. W+K Shanghai is the only China office of the Portland-headquartered agency, so for W+K it effectively is W+K China. And of W+K's offices in eight countries, the China office has the fewest clients: just Heineken, Nike and Tiffany.

Only at Nike is W+K the leading agency, the role that steers strategy and creative and is usually the most valuable partner among a brand's many creative agencies. Even that owes more to the unusually close ties between W+K Portland and Nike. Beyond that, the headphone brand Beats, which W+K had served since 2013, chose not to renew when its contract expired early this year, even though Jason White, the brand's global vice president of marketing, was once managing director of W+K Shanghai.

From its founding to the present, W+K has been one of the most respected independent agencies in the world, and W+K Portland grew up alongside Nike. In 1988, W+K co-founder Dan Wieden, drawing on the last words of a man facing execution, wrote "Just Do It" for Nike. It became the brand's most famous slogan and went on to shape Nike's whole approach to marketing. The series of ads the agency made in 2010 for Old Spice, Procter & Gamble's men's fragrance brand, won the Grand Prix at that year's Cannes Lions International Festival of Creativity and drove sales hard.

When an independent creative agency of this rank arrived in Shanghai in 2005, the advertising industry expected a great deal. But in its 10 years in China, W+K has not delivered the surprises people imagined. It has lost one client after another, and it has never built influence in China to match its international reputation. We are not questioning the creative quality of this office. In 2012 it made Nike's "Find Your Greatness" social media series, a successful Olympic campaign for Nike. And Let Your Body Do The Talking, the campaign idea it created in 2013 for Levi's Revel line, was later rolled out worldwide.

A print ad for Let Your Body Do The Talking

Even so, W+K Shanghai could not hold on to its clients. Internationally, W+K is more often called a "creative hot shop" than an "independent agency." Think of it as the advertising equivalent of an independent designer label in fashion. Others of its kind include M&C Saatchi, BBH and AKQA. Nearly all were founded in the 1980s and 1990s. Unlike the international 4A agencies, which were born on Madison Avenue long ago and have since grown mature and process-driven, these independents did not spring up in one place, and they are smaller and more nimble. Their founders often have something of a legend about them, or have made work now considered classic. Each has its own style, and what they share is creative work that is "sharper" than the 4As'. If you follow advertising, or know something about it, you may be able to tell them apart from the character of the work alone.

Like W+K, these distinctive and varied companies do not seem to be having an easy time in China. Leagas Delaney (LD), which entered China in 2009, made Shanghai its first stop in Asia and, after more than two years of cautious testing, announced its formal opening in 2011. It won clients during that period, including Media Markt, the Japanese printer brand Brother and the triangular chocolate Toblerone, but things went less smoothly than expected after the opening. Between 2013 and 2014, LD went through a trough that creative partner Li Zhaoguang found very painful: it had only five or six clients, and it lost nearly a third of its staff, shrinking from more than 30 people to about 20.

M&C Saatchi, the first of them to enter China, moved into Hong Kong in 1995 and opened a Shanghai office in 2000. Today there is nothing "independent" left about it in China. In March 2013, M&C Saatchi announced a joint venture with the local creative company aeiou, with aeiou holding the majority stake. It was not a peaceful deal: nearly all of M&C Saatchi China's existing employees were asked to leave, including its China CEO, Xu Pingfen. In May that year, after its revenue had dwindled steadily, the Hong Kong office closed after 18 years. The Beijing office, added in 2009, had a brief life and has since vanished from M&C Saatchi's global map.

AKQA and BBH, which entered China around the same time as W+K, lost their independence in the advertising industry's acquisition wave of summer 2012, when they were bought by Britain's WPP, the world's largest communications group, and France's Publicis, the third largest, respectively.

They may have lost the aura of the "creative hot shop" along with it. The many independent creative agencies and 4A agencies QDaily interviewed for this story all clearly felt one thing: people are an agency's core resource, and also its biggest problem.

For these independent agencies, which arrived in China on the strength of their international reputations, the problem in China is a shortage of people, or more precisely, the absence of a soul figure. Huang Feng, China creative director of Fred & Farid (FF), compares creative hot shops to designer fashion labels: as long as the soul figure is there, the culture is there. "In the Chinese market, as a rule, very few founders or soul figures come here and really get to know China, and they rarely pass their culture on to the company here. The difference between creative hot shops and 4A agencies is that the 4As are already systematized and run by routine. Whatever the country, their model is the same: a CEO, a CFO, an ECD (executive creative director, the top creative position) and so on, in one process. Creative hot shops don't win by process. They depend much more on their soul figure, and that person is extremely important."

The soul figure is the core of the creative hot shop, and to see why, we have to go back to where their success began.

Dan Wieden (photo: Adweek)

In 1982, Dan Wieden and David Kennedy left the agency they worked for, taking with them Nike, then a newborn sports brand, and set up on their own in Portland. That company became W+K. When Wieden wrote "Just do it" for Nike, Nike co-founder Phil Knight was skeptical and rejected the proposal: "We don't need that stuff." Wieden replied: "Trust me!" Nike went on to overtake its rival at the time, Reebok, and W+K became famous. In the 33 years since, Nike has never replaced its creative agency. It has taken on more agencies, but W+K has held firmly on to its place as leading agency.

Wieden has won many honors, including a place on Inc. magazine's "25 Most Fascinating Entrepreneurs in America," Time magazine's "50 Cyber Elite" and Advertising Age's "100 Advertising People of the 20th Century."

BBH's name likewise comes from the surnames of its three founders, John Bartle, Nigel Bogle and John Hegarty, in keeping with an advertising-industry tradition. "When the world zigs, zag" was the first work by this company, founded in Britain in 1982, and it was made for the jeans brand Levi's. Levi's golden age came in the 1990s. The classic 501 deserves much of the credit, but the brand idea of "zagging" also won it plenty of fans. The line also stands for BBH's own motto, and the agency took the black sheep from the ad as its logo. Hegarty is still the company's creative director, and in 2007 he was knighted by the Queen.

LD likewise began in London. One of its founders, Tim Delaney, is a leading figure in British advertising copywriting; many British ad people grew up reading his textbooks. Delaney entered advertising at 15, became a copywriter at 19 and, at 31, creative director and managing director of BBDO London. In 1980 he went out on his own and founded Leagas Delaney, where he still works as a copywriter today.

Nearly 20 years ago, Tim Delaney wrote this copy for Patek Philippe: "You never actually own a Patek Philippe. You merely look after it for the next generation." It comes close to the essence of luxury, though today's industrialized luxury business seems to have lost it.

M&C Saatchi was founded by the brothers Maurice and Charles Saatchi, who had earlier built the international 4A agency Saatchi & Saatchi with their own hands. When they started out, Charles was 27 and Maurice 24, and everything they owned came to US$60,000 in borrowed money. In the company's early days, Britain's Health Education Council commissioned them to make a public-service ad against teenage and unmarried pregnancy and in favor of condoms. It showed a "pregnant" man with a swollen belly and a bewildered look, under the line: "Would you be more careful if it was you that got pregnant?" The ad made the Saatchi brothers famous overnight.

What truly made their name was a 1978 campaign ad that helped Conservative leader Margaret Thatcher become prime minister. It showed a long queue of people waiting to collect unemployment benefit, under the headline "Labour isn't working." The pun mocked Labour's policies as failing to solve unemployment. The ad won public support for the Conservatives, helped open 18 years of Conservative rule, and gave the Saatchi brothers' agency an enormous reputation.

In 1995, after a steep fall in the share price, and because of the brothers' lavish spending, the board of Saatchi & Saatchi pushed them out. The furious brothers immediately founded M&C Saatchi to compete head-on with Saatchi & Saatchi. Clients such as Gallaher Group, Mirror Newspapers and Dixons followed them. After winning British Airways, M&C Saatchi grew fast. The more glorious these agencies once were, the more forlorn they look in the Chinese market today.

Fred & Farid, by contrast, looks somewhat different, because its soul figures are present. FF is a young company, founded in Paris in 2007, and its first branch was the Shanghai office, opened in 2012. Fred graduated from the Créapole design school in Paris, where he majored in "concept research and creativity." Farid came from Sciences Po in Paris, with degrees in the cultural industries and in international economics and business. When they met at the international 4A agency RSCG, neither was a creative. Fred worked in strategy and Farid in client service, and each found the other irritating. During one pitch, Fred asked to team up with Farid. His reason: "Put two people who are like fire and water together and you might just get a huge spark."

The huge spark turned into a chain of explosions. After a week of working together, the two decided to move into the creative department as a copywriting team. A week later, they quit together. From then on, from France to Britain to the United States and back to France, they changed jobs as a team every time and never split up again. In today's slang, they are a "CP," an inseparable pair.

In 2001, at John Hegarty's invitation, Fred & Farid oversaw the planning at BBH London for the biggest product launch in Microsoft's history, the Xbox (a US$500 million launch), and created the Xbox TV commercial that shook the industry: "Life is short. Play more." The ad won a Gold Lion at Cannes in 2002 and ended up competing with Nike for that year's Grand Prix. In 2002, Fred & Farid were hailed as "London's most sought-after French creative duo," and the French business magazine Stratégies nicknamed them "the two Zidanes of French advertising" (Stratégies, September 27, 2002).

Five years later, Fred & Farid was founded with the backing of the French financier Vincent Bolloré. Fred Raillard and Farid Mokart own 70% of the company. The brand-new independent creative communications group went on to win almost every major pitch in France, grew remarkably over the next five years, and reached revenue of 44 million euros in 2011.

The reason it came to China sounds even less likely. Huang Feng had spent more than ten years at the French company, working with Fred and Farid the whole time. So when he prepared to return to China for family reasons, Fred and Farid thought it would be a great pity to end so close a relationship, and decided to open a company in Shanghai. They came to Shanghai looking for a small office for 20 to 30 people. But on their fourth day there, Fred, on his first visit to China, made a startling decision: he would move his whole family to Shanghai. They dropped the idea of a small office and took a 1,000-square-meter space at once. At the time, the office had just two people in it: Huang Feng and Fred.

This 1,000-square-meter office has grown from two people to 150

FF's Shanghai office now has 150 people, and for its current workload it is still 20 to 30 short. It serves more than 30 clients. Rather than mainly serving the international brands its headquarters already worked for, FF has won more local clients in China, including Tencent, the womenswear brand Lily, Bosideng and Metersbonwe. It has since opened a Beijing office, mainly to serve CCTV and the Starlight Plaza shopping mall. Even international clients such as YSL and Lacoste were won recently, in China, without help from its French headquarters.

That is why its fate in China is different. If you only serve headquarters' clients, you never have any real say. It is also why the former W+K employee we interviewed believes winning Momo as a client may be more valuable and meaningful than serving Shanghai Disney. "But one problem with the China office is that the staff here aren't as tight-knit as in France, and turnover is relatively high," Huang Feng told QDaily.

"Our only competitive strength is people, and clients come with people. So there's no need to analyze whether company A is good and company B is bad. Just look at the people. That includes the leadership: do they have vision, how do they want to do things? And it includes the ordinary staff: what kind of people you hire, because people create the culture. Over these dozen or so years I have seen a lot of ups and downs. Some companies do very well and rise steadily; some swing between boom and bust; some do badly and even vanish without a trace; some had problems before and then leapt ahead... All of this has happened in this industry. So the conclusion is that, in the end, it comes down to people," Lun Jieying, chairwoman of Lowe China, told QDaily.

Frequent changes in leadership are probably another of W+K Shanghai's difficulties. Since 2014, its executive creative directors Michael Simons and Li Yaobin, and Shanghai managing director Jason White, have all left one after another. Yang Yaozong, formerly North Asia executive creative director and China chairman at JWT, then filled the ECD post, the top creative job. For W+K, Yang may be a creative closer to the Chinese market. Mark Fitzloff, W+K's global co-executive creative director, said: "Yang represents new leadership for us. He has many years of experience in advertising in China and Asia and a deep understanding of the region's creative community. His experience in the region, especially his past eight years in China, will open up new possibilities for W+K and the Shanghai office."

Let us hope so. W+K is a famous company, and although it is no longer a "creative hot shop" in the strict sense, we still hope it wins the clients, standing and creative work its name deserves. We hope the same for the other independent agencies.