‘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.
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.