‘The time of adap­ta­tion of­fices is com­ing to an end’

Ser­vi­ce­plan Group CEO Flo­rian Haller ex­plains why the Mid­dle East is in fo­cus for the Ger­many-head­quar­tered in­de­pen­dent, launch of me­dia spe­cial­ist Me­di­aplus, and how the ‘part­ner­ship’ model is work­ing, glob­ally. In con­ver­sa­tion with Gokul Kr­ish­namoor­thy.

Campaign Middle East - - FRONT PAGE -

Ser­vi­ce­plan Group’s Flo­rian Haller ex­plains why the Mid­dle East is in fo­cus, and why he’s launch­ing me­dia spe­cial­ist Me­di­aPlus here

“In­te­grated com­mu­ni­ca­tion is not about a piece of pa­per. It’s about ac­tu­ally work­ing to­gether,” says Flo­rian Haller, CEO of Ger­many-head­quar­tered Ser­vi­ce­plan Group. Which is why, the 1970-born group, which set up shop in Dubai in 2010, is mov­ing to­wards es­tab­lish­ing its fully in­te­grated ‘House of Com­mu­ni­ca­tion’ (HOC) model here too.

The three big pil­lars are cre­ative (Ser­vi­ce­plan), me­dia (Me­di­aplus) and dig­i­tal (Plan. Net), notes Haller. Re­search (Facit) be­ing the fourth pil­lar, is as im­por­tant but not as big. The phi­los­o­phy of ‘House of Com­mu­ni­ca­tion’ is to bring the three un­der one roof. So while Ser­vi­ce­plan and Plan.Net are here al­ready, the in­tent is to launch the ded­i­cated Me­di­aplus brand over the next 12 months. The agency has been help­ing on me­dia plan­ning for clients even now. A team of four al­ready works on me­dia, han­dling buy­ing through another en­tity. The new unit will com­plete the in­te­grated of­fer­ing from within the HOC.

Glob­ally, what started as a tra­di­tional ad­ver­tis­ing agency un­der the watch of Flo­rian’s fa­ther Dr Peter Haller, has stayed in­de­pen­dent, and built on two cores – HOC, and a model of part­ner­ship. The agency would not, in prin­ci­ple, sell stake to a hold­ing company. If Haller ju­nior has his way, it won’t. The part­ner­ship model en­sures it doesn’t have to, for the sake of ex­pand­ing its foot­print.

Ex­pan­sion not driv­ing agenda

The model has worked else­where, for the group to claim the ti­tle of ‘largest and most di­ver­si­fied owner-man­aged and part­ner-man­aged agency group in Europe’. The brand now has a pres­ence in 29 ci­ties across the world, with 45 dif­fer­ent agency units cat­e­gorised un­der the four broad busi­nesses.

To put things in per­spec­tive, in its fi­nan­cial re­sults for the year-end­ing June 2014, the group recorded gross in­come (fees and com­mis­sion) of Euro 252 mil­lion (USD 315 mil­lion at cur­rent rates), up from Euro 218 mil­lion the pre­vi­ous year. In­ter­na­tional sales amounted to Euro 38 mil­lion in 2013-’14. The CEO es­ti­mates that this fig­ure would cur­rently be at 45 to 50 mil­lion Euros. The 16 per cent growth of the last fi­nan­cial year was not just from in­ter­na­tional ex­pan­sion. As re­cently as the last week of Oc­to­ber, the agency’s Ham­burg of­fice bagged ‘ a large beer ac­count’.

On the di­vi­sions, the Ser­vi­ce­plan brand brought in 32 per cent of rev­enue. Plan. Net con­trib­uted 22 per cent, while Me­di­aplus ac­counted for 21 per cent.

Haller ex­plains that the in­tent has been to cre­ate a solid cre­ative agency, and then add the me­dia of­fer­ing. This is the process now be­ing fol­lowed in Dubai, he notes.

“We do plan for ev­ery HOC. The strat­egy would be dif­fer­ent based on the mar­ket sit­u­a­tion. In China, for ex­am­ple, we’re rel­a­tively new, so we’re fo­cus­ing on be­com­ing a great cre­ative agency first be­fore we launch me­dia. Dubai, is go­ing to be­come the next HOC,” ex­plains the global CEO.

The agency is clear that it does not want to ex­pand ‘too fast’, ei­ther ge­o­graph­i­cally or in terms of business units. The launch of a spe­cial­ist me­dia agency, it says, is driven by clients seek­ing spe­cial­ists who can op­er­ate within an in­te­grated frame­work. The trend, as Haller points out, is of clients mov­ing in­creas­ingly from spe­cial­i­sa­tion to an in­te­grated of­fer­ing.

Ge­o­graph­i­cally, un­der Haller’s lead­er­ship, the agency has ex­panded us­ing dif­fer­ent means, from Latin Amer­ica to Syd­ney and from New York to Tokyo. The process of ex­pan­sion started in 2006. One av­enue for ex­pan­sion was by up­ping its stake in Liq­uid Cam­paign to over 50 per­cent, which meant of­fices in Korea, In­dia and Rus­sia came un­der the ‘ Ser­vi­ce­plan’ um­brella since Septem­ber 2013.

“Cur­rently, our ob­jec­tive is not about open­ing as many agency of­fices as we can. The core fo­cus is strength­en­ing the hubs we have; strength­en­ing fo­cus as HOC,” notes the CEO.

The dig­i­tal ‘Plan’

Plan.Net has grown, as one would ex­pect, faster than other di­vi­sions. The agency head un­der­lines that it has not been a case of growth in dig­i­tal at the ex­pense of clas­sic ad­ver­tis­ing. Clients still need the cre­ative core idea, but also want the e-shops to bring the cam­paign to life on dig­i­tal.

Ser­vi­ce­plan Group was in the news ear­lier this year for ac­quir­ing ‘one of Ger­many’s lead­ing e-com­merce agen­cies’, hmmh mul­ti­me­dia-haus AG. It was an­nounced that hmmh would be in­cor­po­rated into Plan.Net. The move added 340 em­ploy­ees to Plan. Net mak­ing it Ger many’s largest and mar­ket-lead­ing dig­i­tal mar­ket­ing agency, in­formed the Ser­vi­ce­plan web­site.

Glob­ally, the group now has close to 2,000 peo­ple. While in­te­gra­tion is the way for­ward, there is a ra­tio­nale to keep­ing Plan.Net and Ser­vi­ce­plan dis­tinct, rea­sons Haller.

He notes, “It was a de­lib­er­ate decision not to put ev­ery­one into one agency. It is a bit of a dif­fer­ent cul­ture.

Dig­i­tal spe­cial­ists come from spe­cialised ar­eas like Big Data and per­for­mance. In dig­i­tal, you do have spe­cial­ists who are not com­fort­able just be­ing an ‘ad agency per­son’.”

He is quick to add that at the same time, Ser­vi­ce­plan peo­ple should not feel like ‘off­line peo­ple’. With TV spots and on­line videos get­ting ‘very close’, the blur­ring of lines is real.

Lo­cal tal­ent, one cul­ture

Most of the peo­ple in the Dubai of­fice of the agency have been re­cruited from Dubai, with good rea­son. Like most agen­cies, their na­tion­al­ity could be Le­banese, In­dian, Euro­pean or some­thing else, but they are re­cruited lo­cally.

“You don’t want an agency built on peo­ple with no con­nec­tion to the area,” rea­sons Haller. While the agency han­dles BMW (among oth­ers) in sev­eral global mar­kets (in­clud­ing the Mid­dle East), it would like the team to bring to the fore the flavour and un­der­stand­ing of a ‘lo­cal’ agency, along­side its global learn­ings on the brand.

Sit­ting along­side his col­leagues in Dubai at Ser­vi­ce­plan Mid­dle East is the MD JanPhilipp Jahn, who has moved from Ham­burg. “It’s not very dif­fi­cult to get peo­ple to move to this mar­ket,” quips Haller.

On a se­ri­ous note, he adds, “It is im­por­tant to trans­fer peo­ple from dif­fer­ent re­gions. We want to en­sure we have a common cul­ture. We’re small enough to know each other and share that common cul­ture.”

Lo­cal­i­sa­tion should also re­flect in the work, feels the CEO. “We have global clients. But each HOC also has its share of clients from its own re­gion. We be­lieve the time of ‘ adap­ta­tion of­fices’ is com­ing to an end. In Italy, we don’t have BMW as a client, for ex­am­ple. All the clients are lo­cal. The same is the case with Paris,” he rea­sons.

A com­bi­na­tion of th­ese fac­tors is ex­pected to help grow the share of in­ter­na­tional business for the pow­er­house in Ger­many, ac­cord­ing to Haller. From close to 20 per cent, this will rise, grow­ing even at its cur­rent growth rate of 35 per cent. The tar­get set by the agency’s lead­er­ship is 25 per cent. Haller un­der­lines that the Mid­dle East will be a fo­cus area to re­alise this growth.

The agency’s struc­ture of part­ner­ships helps sta­bil­ity too, points out its global head. Each of the part­ners is a ‘sub­stan­tial share­holder’. This is not just dif­fer­ent from a credit-funded model that brings with it some per­ils, but makes a big dif­fer­ence as it shapes the lead­er­ship – and hence each agency.

“The lead­ers are sub­stan­tial share­hold­ers, rather than sol­diers mov­ing from one agency to the other,” notes Haller. Among them is Ser­vi­ce­plan Mid­dle East man­ag­ing part­ner Rami Hmadeh.

Awards mat­ter

No con­ver­sa­tion with an agency head is com­plete with­out dis­cussing awards. Es­pe­cially, when it’s an agency that’s just been crowned the ‘In­de­pen­dent Agency of the Year’ at London In­ter­na­tional Awards 2014. For Ser­vi­ce­plan, eas­ily the most awarded cre­ative agency in Ger­many, the vi­sion is to be ‘in­no­va­tive’, as it is recog­nised as ‘cre­ative’, says its global CEO.

“There used to be a time when we did not re­ally care about cre­ative awards. We have changed our opin­ion. Awards are the only real mea­sure we have of the cre­ativ­ity and in­no­va­tive­ness of an agency,” of­fers Haller. Awards also de­ter­mine the at­trac­tive­ness of an agency to tal­ent, he ex­plains.

‘Small is beau­ti­ful’

Aske Haller about whether he be­lieves ‘Small is beau­ti­ful’, and pat comes the re­ply: “What is small?”

The size of 50 to 60 peo­ple per of­fice, in of­fices spread across the world, is op­ti­mum, feels the agency head. He ad­mits that in­te­grat­ing peo­ple from dif­fer­ent parts of the world into a common cul­ture is a con­scious ef­fort. Ev­ery Mon­day, teams from across the world con­nect on a video con­fer­ence, dis­cussing work, al­low­ing scope for col­lab­o­ra­tion. An event hosted twice a year sees them meet­ing phys­i­cally too.

“It makes it eas­ier for us com­pared to oth­ers (global net­works). In a re­cent project in Dubai, for ex­am­ple, we needed some spe­cific app de­vel­op­ment to be done. A pro­gram­ming team from France worked on a project in Dubai,” re­veals Hmadeh.

“I be­lieve a sin­gle agency of more than 50 or 60 peo­ple tends to be­come slow and im­per­sonal. In our case, we man­age to keep it per­sonal be­cause of our size.

“On the other hand, clients want an ad­van­tage of a larger group – on which we can de­liver too,” sur­mises Haller.

Haller (left) and Hmadeh

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