Soon, 50% of TBWA APAC’s revenue will come from stuff it wasn’t doing two years ago
A shift in client demand at TBWA’s APAC agencies hints at what’s to come for the global network.
A still from TBWA\Bolt's CNY campaign for BMW / TBWA\Bolt
Few agencies are as closely associated with highbrow, above-the-line advertising as TBWA. For decades, the company’s stock in trade has been the kind of ads that end up the subject of water cooler conversations or between the glossy pages of coffee table books.
Yet its Asia Pacific agency president Sean Donovan is convinced that it will soon derive at least half of its revenue from activities well outside the traditional definition of advertising. To him, this means social creator strategies, metaverse activations or digital transformation projects. ”It’s only a matter of time,” he says.
And while it might not sound unusual coming from another agency leader, bear in mind that this is the network that made Amazon’s Alexa a Christmas must-have and helped transform Apple into a superbrand – and did it with classic, Big Idea creative.
According to Donovan, the agency is taking more and more revenue from ’innovation’ – that is, business activities it had barely experimented with before the pandemic.
”’Innovation’ is deliberately vague because it means different things for different clients,” he says. ”The fairest definition is ’anything we didn’t make money on two years ago’. We’ve tracked that and we’ve seen that grow over the last two years quite significantly. We now make about 35% of our money from non-traditional stuff and that was a move up from, say, 15% in 2019.”
In plainer terms, that has meant creating playbooks for BMW on Douyin or leading brands through activations on emerging social platform Bilibili.
TBWA\Bolt’s Chinese New Year work for BMW included a short film, but also invited users on Bilibili to add their own content to the campaign as well as posters and limited collectibles accessible through the brand’s app. A recent activation for the Nippon Foundation saw the agency’s Tokyo arm build a contactless, talking public toilet.
TBWA’s clients in China and the wider Asia Pacific region are often quicker to investigate new forms of digital marketing than their peers in the US or Europe, he says, and the agency is following that demand. ”We’re seeing a lot of early adoption in this part of the world.”
Innovation framework
Coordinating TBWA’s more experimental work is an internal team called Next, based out of Sydney and led by chief innovation officer Luke Eid and head of innovation in Asia Pacific Tessa Conrad.
But high client demand for activations previously considered on the fringe to other forms of marketing ”has forced revenue from traditional into innovation quicker than in certain other markets,” says Donovan.
That shift led TBWA to hire a global chief creative experience officer – Ben Williams, formerly of R/GA – rather than a traditional CCO last October. When that appointment was announced, worldwide chief Troy Ruhanen hailed Williams as someone who could ”redefine categories to innovate and create products that influence culture,” and whose work ”sits at the nexus of advertising, experience design and innovation”.
Donovan, meanwhile, says Williams’s appointment acts as a ”compass” to new hires and the company’s future direction (Dentsu Creative’s Perry Essig was brought in this month as a chief creative experience officer for APAC, ahead of regional counterparts in Europe and the US).
Holistic focus
Could TBWA’s focus on innovative marketing come at the cost of its traditional focus on premium advertising? For Donovan, at least for now, ”it’s impossible to answer the question because you don’t know how a dollar got divided up – you just know you got a dollar”.
However, he concedes: ”Inevitably, it’s going to be at the expense [of advertising] but it’s not at the expense of overall growth. TBWA has done pretty well over the last few years; the top line is growing but the innovation revenue is growing too.
”Maybe people will be offended by this, but I don’t see the difference between a TV ad, a 28-minute piece of content that’s created purely for online and shot by a leading director and a very smart six-second pre-roll on YouTube.”
In any case, the agency’s diversification held firm through the recent heavy economic weather in APAC. Despite the impact of lockdowns in Chinese cities, growth is ”still on track as predicted,” he says.
With brands able to better monitor and engage consumers more effectively outside traditional promotional moments, restricting its products to advertising would lead to stasis, he concludes. ”If you’re not changing to a more holistic relationship... that’s probably not a great place to be.”