Creative Agency Rankings & Strategy Toolkit

Singapore 2014 Creative Agency Rankings & Strategy Toolkit Marketing Services Opportunities Overview: opportunity & competitive analysis relative to other marketing services Agency Rankings & Performance Index:, brand consultancies and content marketing Key Industries for Creative Services: Highest growth and top spenders in creative services Jessica Li, Quek Eng Peng, Emily Gong

Table of contents Executive Summary Marketing Services Opportunities Overview 3 4 Marketing services opportunity size & competitive analysis Agency remuneration model trends Agency selection criteria Holding companies dominance across marketing service Whitespaces in newer marketing service areas Agency Rankings & Performance Index agency Brand consultancies Content marketing services Key Industries for Creative Services 13 20 Annex Industry creative services expenditure growth and size Key industry fact sheets preferred agencies, marketing budgets size and allocation, loyalty to agencies, and preferred remuneration models 1. Methodology 2. Sampling 3. Definitions and exchange rates 29

Executive Summary Despite a saturated marketing services landscape in Singapore, there are opportunities for advertising and marketing agencies to grow their business and defend their positions in respective marketing service areas (i.e. creative, media planning/buying, public relations, event marketing, direct marketing and market research). The growth strategies for different types of agencies are unique due to different competitive forces in each marketing service area. However, agency growth objectives often result in them jumping on the bandwagon to offer upcoming marketing services. This often leads to silos being created within agencies, with new teams set up in agencies to focus on this expertise that may not be fully integrated into the rest of the company s work. Unintentionally, agencies may focus too much on the new tool rather than the clients problems and needs. Therefore, agencies must constantly make it a point to give the client a seat at their agency strategy planning table. In this report, Marketing Research breaks down three key insights into the Singapore creative services landscape in 2014: 1. Creative agencies can bolster their positioning and grow by offering a wider range of services in relatively unconquered territories of brand consulting, digital and content marketing, but must do so with client marketers needs at the heart of the agency strategy planning. is the second largest component in the marketing budget, a result of the large share of their marketing budgets that clients allocate to creative services (19%). Therefore, competition is also highly intense the highest among marketing services in Singapore. However, there is still considerable whitespace in newer marketing services of brand consulting, digital marketing and content marketing, where independents have emerged and where there is still no dominant player. 2. WPP, Omnicom and Publicis agencies dominate the creative agency rankings in Singapore, with varying levels of overall perception vs. agency performance among existing clients. Ogilvy is the clear leader in the creative agency space, with strong overall agency rankings and performance index. DDB is next and other global agencies trail. Despite relatively lower overall rankings, BBD, TBWA, JWT and Dentsu s good relationship with existing clients is demonstrated through strong agency performance index scores. However, independents have emerged in both brand consultancy and content marketing agency rankings, earning strong agency performance indexes an indication that these are potential areas where smaller independent agencies can specialise in to carve a position for themselves. 3. Most top spender industries in Creative services are expecting relatively lower growth in creative services expenditure, but continue to be important. Client marketers from the Education industry will be an important target for creative agencies, where these clients are expecting relatively large increases in their existing large creative services expenditure. Key client accounts for creative agencies are likely to come from Consumer Products, Financial Services, Arts & Entertainment, IT/Telecoms, Travel and Healthcare, industries with historically large creative budgets. Other growth opportunities exists with clients in Automotive & Energy/Government industries, which are growing from a relatively lower creative spend base. ABOUT THE REPORT This report is based on findings from the 2014 Marketing Spend Benchmarking study, which collected the feedback of 1223 client marketers in Asia. In Singapore, a total of n=489 responses were collected. The study was carried out by Marketing Research, the research unit of the Marketing magazine. Only aggregate results are published, and individual company information is held in strict confidence with Marketing Research.

Marketing Services Opportunities Overview Creative agencies can bolster their positioning and grow by offering a wider range of marketing services, especially in brand consulting, digital marketing (social, mobile and search) and content marketing.

The marketing services landscape in Singapore is saturated Opportunity size score Among marketing services in Singapore, creative services fall into the top-left quadrant, where the opportunity size is relatively larger but competition is also among the highest. Once clearly defined, the lines between separate areas of marketing services are now blurred. Agencies are constantly evolving to the needs of clients briefs, adopting new marketing techniques and developing new expertise areas. This presents new opportunities for agencies to develop deeper relationships with their clients, and also to enter new marketing spaces for growth and differentiation. However, before agencies invest in new service areas, it is critical for senior management to fully understand the various marketing opportunities that is, how big is the opportunity and how stiff is the competition? Figure 1 puts into perspective the landscape for various marketing services opportunities. Based on a survey of almost 500 client marketers in Singapore, Marketing Research calculated an opportunity size score (x-axis) and a competition score (y-axis) for each marketing services area. The opportunity size score considers the share of marketing budget allocated to each marketing services area, the growth forecast and the incidence of use among client marketers. The competition score considers the number of players in that area, the average number of agencies used by marketers, and the strength of preference for top tier agencies. The marketing services landscape in Singapore is saturated, evident from the fact that no service area falls into the top-right quadrant of larger opportunity size and lower competition. The creative agency space is mature, with many agencies fighting for a share of clients creative budget. The opportunity size is relatively larger but competition is also among the highest. Among marketing services in Singapore, the opportunity size for creative agencies is the second largest, trailing only event marketing agencies. Yet, creative agencies operate in the most competitive environment among marketing services. Figure 1: Marketing services opportunities landscape 2014 Singapore Smallest opportunity Largest opportunity Larger opportunity, higher competition Smaller opportunity, higher competition (including sponsorship) Larger opportunity, lower competition Smaller opportunity, lower competition Highest competition Competition score Lowest competition

Largest opportunities in event marketing, creative services & media planning/buying is arguably the most attractive service area, with largest opportunity and relatively lower competition., event marketing and media planning/buying services mostly fall into the larger opportunity, higher competition quadrant (Figure 1). agencies operate in the most competitive environment out of all marketing services. It is the marketing service with the highest number of players. Furthermore, top agencies are well established, with high share of preference among client marketers (Figure 2). The opportunity size for creative services is large, trailing only event marketing. This is due to the large share of the marketing budget (19%) that marketers allocate to it (Figure 2). STRATEGY TIP: is a challenging area for boutique/new agencies to cut through the clutter, and also where top agencies must defend positioning through greater differentiation. is arguably the most attractive marketing service area in the short term, having the largest opportunity size among marketing services, with relatively lower competition. In line with this, event marketing takes up the largest share of the client marketer s budget (2) (Figure 2). Yet even though there are already many event marketing companies, there is still no dominant player, unlike in other marketing services. STRATEGY TIP: There is an immediate opportunity for event marketing agencies to establish themselves in this space to become a dominant, preferred agency. However, this is only likely to be a short-term opportunity, where agencies need to act fast with aggressive sales and marketing efforts. agencies in Singapore face intense competition, as they fight for the 13% share of the client marketer s budget. Compared with other Singapore marketing services, the opportunity for media agencies is the third largest, after creative and event marketing. Yet it faces the second most intense competition, with top agencies maintaining a stronghold in marketers share of preference. Overall, media and PR agencies operate in a similar environment. Figure 2: Business environment of marketing services for 2014 Singapore Share of marketing budget 2014 Incidence of use Total number of agencies Stronghold of top agencies Fragmentation in the agency long tail 19% 89% High High High 13% 89% Medium High Medium 2 87% High Low Medium 72% Medium Medium Medium 1 74% Low Medium Low 7% 57% Low High Low

Similar opportunity size for direct marketing and PR, but lowest competition for direct; small opportunity in market research needs tapping into other marketing budget areas for growth. STRATEGY TIP: As with creative services, it will be difficult for boutique/new media agencies to carve a niche in media services. Top agencies must defend their positioning through greater differentiation. and market research fall into the smaller opportunity, lower competition quadrant (Figure 1). has an opportunity size similar to that of media planning/buying and PR, and it enjoys the lowest competition among marketing services in Singapore, making it an attractive area to specialize in. is one of the least fragmented marketing services in Singapore, with the lowest number of different agencies mentioned in the direct marketing services agencies rankings (Figure 2). STRATEGY TIP: is an area where independent/boutique agencies and new entrants will find it relatively easier to carve a position for themselves, compared with other marketing service areas in Singapore. is often the least important item in the client marketer s budget, with just over half of Singapore marketers using market research at all. It also receives the lowest share of marketing budget, with an average of 7% allocated to it (Figure 2). However, the environment that market research agencies operate in is relatively less competitive, being the least fragmented among marketing services in Singapore. The main challenge that market research agencies face is the stronghold of the top agencies which have a high preference share among marketers. This is largely a result of limited marketing efforts by research agencies in Singapore, which are generally the least active in awards participation and business-to-business (B2B) marketing efforts. Even though several global market research agencies enjoy a large market share, Marketing Research s agency rankings results highlight the dominance of one agency Nielsen (Figure 8). This is partly due to Nielsen s focus on syndicated media research, which has propelled awareness and consideration among marketers who are often concerned with audience data. STRATEGY TIP: Boutique/new agencies have a chance to establish themselves before the market leaders step up in their marketing efforts. Established market research agencies need to invest in B2B marketing in order to improve consideration among client marketers that have control over the marketing budget allocation. Growth will require market research agencies to upgrade their offerings to tap into other areas of the marketing budget, and/or provide active education to marketers as a whole as to the importance of market research to increase adoption. PR services predominantly falls into the smaller opportunity, higher competition quadrant (Figure 1). PR agencies operate in a relatively similar environment to media agencies, with slightly smaller opportunity size and corresponding lower competition. The relatively smaller opportunity size in PR is driven by the lower incidence of use of PR services among client marketers (72% in PR vs. 89% in media) and lower stronghold of top agencies (Figure 2). STRATEGY TIP: PR agencies must differentiate themselves with expertise areas, and build deeper client relationships to solidify client marketer preference.

New business opportunities exist from increased outsourcing A shift away from engaging agencies on retainer accounts is due to less loyal and increasingly demanding clients; but also possibly a result of perceived poor client account servicing by agencies when remuneration is based on retainer models. Overall, Singapore-based marketers are increasingly outsourcing marketing functions. From 2013 to 2014, there has been a 6% increase in the proportion of marketers who outsource marketing services (Figure 3). However, there is a shift away from retainer remuneration models to project-based models. This is an indication that marketers are increasingly demanding and perhaps less loyal, preferring not to be bound to retainer arrangements (Figure 3). Figure 3: Agency remuneration model usage and satisfaction for 2014 Singapore Agency remuneration model trends (% change from 2013 to 2014) -6% -6% All work done in-house Retainer models +12% Project basis While retainer accounts could allow a deeper relationship to be built between the client s organization and the agency, it could also hold companies hostage to agencies they are not satisfied with. With a higher proportion of dissatisfied marketers with retainer accounts than project basis models, it is unsurprising that marketers are shifting from retainer to projectbased models (Figure 3). The shift to project-based remuneration models is led by clients in Energy, Utilities & Government, Education, and Consumer Products (Figure 5). Financial Services is an exception, shifting a small proportion of the existing outsourced work back to in-house arrangements. (%) Satisfied (%) Dissatisfied Figure 4: Agency remuneration model trends by industries for 2014 Singapore Consumer Products Energy, Utilities & Government All work done in-house Retainer models 52-14 39-7 Project basis - -6% -10% -14% 24% Education -1-3% 18% Financial Services 3% -1% -2% Healthcare -10% -12% 23% IT/Telecoms -1% -2% 3% Travel -8% 2% 6%

Clients willing to pay more if agencies are creative and are trusted advisors Clients want to be understood yet silos within agencies are often created, with agencies developing new expertise areas that are not always aligned with clients business problems. Agency growth objectives often result in agencies jumping on the bandwagon to offer upcoming marketing services. However, this often creates silos within organizations, with new teams set up to focus on this expertise that may not be fully integrated into the rest of the company s work. Unintentionally, agencies may focus too much on the new tool, rather than the client s problems and needs. Agencies must constantly make it a point to give Figure 5: Agency selection criteria for 2014 - Singapore the client marketer a seat at their strategy planning discussions. With the client marketer s business and marketing objectives at the heart of the agency strategy, agencies must then carefully evaluate the various marketing services opportunities against internal organizational expertise and cultures, before implementing new business units and creating new offerings. Quality over cost While cost of marketing services will always be important to marketers, understanding of needs and creativity are key. Client marketers often prioritise these areas ahead of cost (Figure 5). Understanding of needs Creativity & ideas Cost & remuneration Portfolio of past work 52.4% 70.6% 69.3% (#3) 68.1% (#2) The capability assessment goes beyond the agency s reputation or regional/global networks (both of which have slipped in ranking from 2013 to 2014), and takes into account end-to-end agency performance and results. Key agency personnel Client servicing Research & insights capabilities Reputation/ track record Referrals from others Relationship with account head Regional/ global network Current clients/ conflicts Prior working relationships Awards won 43.1% 40.1% 33. (#8) 28.8% (#7) 19.0% 14.7% (#11) 13.3% (#10) 9.0% 7.0% 2. Up in ranking vs. 2013 Down in ranking vs. 2013 Account directors will need to focus on being a trusted advisor to their clients by developing an understanding of different clients needs across industries, and demonstrating strong research and analysis skills. Clients are increasingly interested in research and insights capabilities (up one ranking from 2013). However, given that every impactful creative idea starts with a consumer truth, it is perhaps surprising that research and insights capabilities is not ranked higher than it is. With increasing emphasis on return on investment, big data and analytics, the importance of research and insights capabilities is likely to rise quickly in the next few years.

Additional expertise in brand consulting or digital marketing could improve loyalty Creative and event marketing services face highest degree of promiscuity among clients, indicating a need to improve loyalty by bundling the right marketing services where client loyalty is higher. Overall, client marketers are least loyal to creative and event marketing agencies, with the average client marketing using close to two agencies for each of these services (Figure 6). Therefore, creative agencies that are exploring ways to improve client marketers loyalty will need to investigate alliances with other marketing service areas where loyalty is higher. Digital marketing is in high demand, but being a relatively new area, expertise in this area is scarce. As a result of the lack of digital expertise, digital marketing is an area where client marketers are relatively more loyal at the moment, using fewer agencies on average compared with most other marketing services (Figure 6). Overall, the digital agency landscape remains untapped, and global advertising companies have yet to establish themselves with dominant positions (further discussed in Figure 8). There is therefore a short-term opportunity for agencies to improve client loyalty by offering digital marketing services. Among the different marketing services, brand consulting enjoys the highest degree of client marketer loyalty. This is intuitive due to the nature of brand consulting, which requires an in-depth understanding of a brand s values and identity, as well as the client organization s strategic goals. In addition, a huge whitespace (73% non-users of agencies) presents a first-mover opportunity to educate client marketers on the value of brand consulting. A strong brand consulting or digital marketing offering could improve loyalty among client marketers, but will need to be evaluated alongside the agency s organizational structure. Figure 6: Number of marketing service agencies that client marketers work with Singapore >= 3 2 1 Do not use agency type 17% 9% 1 10% 10% 12% 8% 17% 22% 34% 2 44% 38% 31% 31% 48% 54% 30% 34% 36% 38% 4% 9% 2 62% 4% 22% 73% Media planning /buying Digital marketing Brand consulting Average number of agencies worked with (among those who use agency type) 1.97 1.72 1.65 1.98 1.79 1.78 1.52 1.30

Media planning/ buying Brand consulting Digital marketing Loyalty/CRM Mobile marketing Content marketing Search engine marketing Social media marketing Singapore 2014 Creative Agency Rankings & Strategy Toolkit WPP, Publicis and Omnicom are dominant players, but whitespaces still exist Brand consulting, digital marketing and content marketing are potential areas where agencies can focus for competitive advantage. In Singapore, the most prominent global advertising networks are WPP, Omnicom and Publicis (Figure 7). Mentions of agencies belonging to the Big Four correlate with the size of each holding group. As the largest, WPP agencies hold a correspondingly large presence in clients top-of-mind preferences, with Omnicom coming second and Publicis a close third. Yet while WPP s agencies combined clearly take up the largest share of client marketers preference in mature marketing services of media planning/buying, creative services and PR, Omnicom competes with WPP for leadership in brand consulting, digital marketing and loyalty/crm., despite being a traditional marketing method, is still highly fragmented. In contrast, when it comes to non-traditional marketing areas content marketing, and digital/search/mobile/social marketing these areas are largely untested. This means that only a handful of client marketers can bring to mind agencies with these capabilities, leaving the field wide open for boutique/local agencies (Figure 7). As highlighted earlier in Figure 6, digital marketing and brand consulting services are areas where client marketers use less agencies on average. Therefore, the whitespace in these areas, as well as content marketing, offer potential services that agencies can focus on for a competitive advantage to further strengthen their positions in Singapore. Figure 7: Overall agency rankings (client marketers preference share) by network/ownership for 2014 Singapore WPP Omnicom Publicis IPG Edelman Other holding groups Independent Highly fragmented: >60% dominated by independent agencies 31% 8% 4 5 59% 64% 66% 68% 68% 72% 73% 7 81% 8 18% 10% 32% 10% 14% 27% 3% 9% 3% 6% 3% 6% 4% 6% 14% 12% 4% 14% 6% 10% 6% 17% 17% 17% 12% 4% 7% 3% 4% 12% 12% 6% 4% 4% 10% 3%

Brand consulting, digital and content marketing are unconquered territories Ogilvy & Mather wins votes from clients that have limited experience across various marketing services, largely due to halo effect of its expertise across marketing services. Due to the halo effect of prominent agencies with a global footprint, these agencies tend to receive votes from clients across the range of marketing services. Figure 8 is an illustration of the overall Singapore client marketers agency preference for various marketing services, regardless of their level of experience with the agency/marketing services. It is an indication of overall awareness and perceptions that client marketers have towards agencies operating in the Singapore marketing landscape. Ogilvy & Mather, with expertise across a range of marketing services, tends to be the across-the-board leader, garnering votes from clients with limited experience in various marketing services. However, as we explore the strength of agency preference among more experienced clients, it starts to move away from the agencies belonging to large holding groups, sometimes giving space to independent, boutique agencies. Despite a substantial share of WPP and Omnicom agencies in brand consulting agency rankings (Figure 7), there is still no clear leader in this space. Newer marketing territories of digital related marketing services (mobile, search and social) and content marketing are also relatively unconquered areas, with no dominant agencies as yet (Figure 8). Figure 8: Overall agency rankings by number of votes in each marketing service for 2014 Singapore Ogilvy & Mather DDB Mindshare Dentsu Zenith Optimedia MEC Global Saatchi & Saatchi Leo Burnett OMD Starcom MediaVest Group Nielsen Edelman Mediacom Loyalty marketing/crm Digital marketing Search marketing/seo Social marketing Mobile marketing Brand consulting Content marketing

Agency Rankings & Performance Index Ogilvy leads with strong overall rankings and performance index; DDB is next and other global agencies trail. Despite relatively lower overall rankings, BBD, TBWA, JWT and Dentsu s good relationship with existing clients is demonstrated through strong API scores.

Agency rankings vs. agency performance index Agency performance index scores are shown alongside spontaneous agency rankings to provide an additional layer of context for understanding the agency ecosystem. i. Agency expertise % of votes the agency received in that marketing service area, compared with other areas Agency s stated expertise in that area ii. Client marketer perception % of votes in that marketing service area that went to the agency Votes by current clients of agency for that type of marketing service given extra weight iii. Agency-client relationship Extra weight given to agencies that received votes from current clients, as it demonstrates client satisfaction Agency performance index (API) The API scores are shown alongside spontaneous agency rankings to provide an additional layer of context for understanding the agency ecosystem. Agency rankings: Spontaneous mentions for agency most likely to be engaged with by client marketers. API: A meaningful indicator of agency performance that encompasses three main components: agency expertise, client marketer perception and the agency-client relationship. API is a composite score out of a maximum of 10 points. i. Agency expertise: Clients perceptions of agency expertise are not always aligned with the agency s focus areas. API removes this bias by taking into account the proportion of votes that an agency received for a marketing discipline out of the total votes it received overall, as well as the agency s self-proclaimed expertise areas. ii. Client marketer perception: Inevitably, when asked to identify an agency they would like to work with, clients most often name agencies they have seen or heard the most about, skewing the rankings towards larger agencies. This heavily disadvantages smaller agencies which might be building strong relationships with a smaller cluster of clients. The perception component of the API is largely based on the raw rankings scores, but gives higher weighting to those clients who currently work with an agency in that marketing area, as they are best placed to understand which agencies actually deliver results. This removes the big agency effect in the agency evaluation. iii. Agency-client relationship: The client relationship rewards agencies that received votes from clients they currently work with, attesting to the quality of their services and their ability to build a good rapport with clients.

Creative space dominated by big hitters Ogilvy is the clear leader in agency rankings; although lower than Ogilvy in agency rankings, BBH, TBWA, JWT and Dentsu outperforms Ogilvy in performance index. In the creative agency rankings, Ogilvy leads the pack by a substantial margin, in addition, earning a strong agency performance index (API) due to votes from experienced client-side marketers and a formidable proportion of votes from current clients. This attests to the agency s solid campaign execution and client management skills (Figure 9). Despite being lower down in the spontaneous agency rankings, BBD, TBWA, JWT and Dentsu outperforms Ogilvy in API, achieving a higher API score than Ogilvy due to stronger positive recommendations among existing users of the respective agencies. The top three agencies with the highest API scores and preference among current clients are TBWA, Dentus & JWT (Figure 9). While DDB comes in second in overall agency rankings, it has a relatively lower API, due to majority of mentions of DDB coming from client marketers who are not currently engaging DDB. Overall, the dominance of holding groups in creative agency rankings is increasing. However, not all holding groups are increasing in share of creative agency rankings. Overall, WPP s agencies total share of creative agency rankings leaps ahead, so does Publicis, with Publicis overtaking Omnicom to become the holding group with the second largest share of client marketer preference for creative agencies. WPP leads with the largest increase in share of creative agency rankings, further solidifying it s leadership. WPP s share of rankings climbs from 21% in 2013 to 32% in 2014. Omnicom s share of rankings softens from 12% to 10% in 2014. Publicis share of rankings edges up from 8% in 2013 to 18% in 2014, Figure 9: Top ten creative agencies agency rankings and API for 2014 Singapore Belongs to a holding group Independent Agency performance index Ogilvy & Mather 11.4% 9.01 DDB 5.7% 8.12 Saatchi & Saatchi 3.3% 8.65 BBDO BBH TBWA JWT 3.1% 2.8% 2.7% 2. 8.86 9.06 9.17 9.13 70% of clients currently engage creative agencies Leo Burnett 2.4% 8.91 Dentsu 2.0% 9.17 Y&R 1.8% 8.95

Brand consultancy poses opportunities for independent agencies Ogilvy leads, based largely on strong perception of its expertise across many marketing services; Futurebrand comes in second rank due to its strong brand consultancy specialization; Independent agency Dia comes in third. Ogilvy is at the forefront once again, with 10% share of brand consultancy rankings. It also lands itself a high API score based largely on strong client perception of its expertise across a range of marketing areas. Futurebrand, an IPG agency is ranked second due to its specialisation in brand consulting. Independent pure play brand consultancy Dia comes in third rank, largely due to client marketers strong recognition of the agency for having specialisation in this area. Dia prides itself as a winning design, innovation and strategic branding consultancy. Dia s relatively lower API is largely due to a smaller portfolio of clients limiting the proportion of positive feedback it receives from existing clients. Brand consultancy offers a viable niche for independents to differentiate and specialize. It is also an attractive area for large agencies focusing in other marketing areas to focus on for growth and increased client loyalty. With clients still relatively inexperienced in brand consulting (only 27% currently using), there is an opportunity to become thought leaders and experts in this area through educating clients on the value of brand consulting. Additionally, brand consulting is also an area where client s loyalty is high (Figure 6). As the brand consultancy space heats up, focusing on rarer but more intensive processes like company rebranding allows agencies to build portfolios of success without having to provide a resource-draining suite of comprehensive marketing services. Figure 10: Top ten brand consultancies agency rankings and API for 2014 Singapore Belongs to a holding group Independent Agency performance index Ogilvy & Mather 10.2% 9.38 Futurebrand 6.0% 7.95 DIA 2. 6.81 DDB Interbrand Saatchi & Saatchi TBWA 2.3% 2.1% 2.1% 2.1% 9.07 7.43 6.49 8.91 27% of clients currently engage brand consultancies BBDO 1.9% 6.06 Landor Associates 1.9% 8.74 McCann 1.7% 6.69

Content marketing is the next frontier, but needs to be more clearly defined Content marketing adoption still in infancy stage, but likely to grow as digital and social marketing matures. Click2View and White Horse have started to gain a foothold, being among the first pure play content marketing agencies Majority of marketers still do not understand what the term content marketing encompasses, limiting its current usage. However, as digital and social marketing matures, clients are diverting more of their budgets into that space. Investment in engaging digital content and platforms will correspondingly increase, and those who have staked their claim on this new frontier will reap the benefits. Only 9% of respondents submitted a vote for content marketing agencies, a testament to the challenge of education and evangelism that marketers face to promote growth of marketing expenditure in this space (Figure 11). For most client marketers, content marketing might be considered a part of the broader creative remit given to advertising agencies, or they might lump it together with digital and social marketing areas that many clients devote little budget to because they assume creating a Facebook page is enough. Yet the consumer relationship is an ongoing one, rather than a sporadic series of irrelevant updates, or worse yet, a complete lack of activity. Therein lies the appeal of content marketing that can take the reins of a company s public digital presence to ensure that its audience receives a regular stream of engaging content. Independent agencies Click2View and White Horse Digital perform particularly well in the content marketing space, both receiving high scores based on specialization in content marketing, and mentions from clients who are currently engaging their services (Figure 11). As specialists in this narrower field, they benefit from being able to devote a majority of their resources to consumer engagement activities. This is unlike larger agencies which have to spread efforts and focus more thinly across a range of responsibilities. Therefore as the content marketing opportunity evolves, pure play content marketing agencies stand to benefit from a niche focus. Figure 11: Top content marketing agencies agency rankings and agency performance index (API) for 2014 Singapore Belongs to a holding group Independent Agency performance index Ogilvy & Mather Click2View White Horse Digital DDB Dentsu 4. 4. 4. 4. 9.1% 7.55 9.29 8.42 7.02 5.59 9% of clients currently engage an agency for content marketing MEC Global 4. 5.59

Top creative agencies by agency rankings Figure 12: Top 25 creative agencies by agency rankings for 2014 - Singapore Top 25 Creative Agencies (by spontaneous agency rankings) % Share of agency rankings Average Rank (out of top 3 ) Agency Performance Index (API) Ogilvy & Mather 11.4% 2.00 9.01 DDB 5.7% 1.93 8.12 Saatchi & Saatchi 3.3% 2.17 8.65 BBDO 3.1% 2.15 8.86 BBH 2.8% 2.16 9.06 TBWA 2.7% 2.09 9.17 JWT 2. 2.14 9.13 Leo Burnett 2.4% 2.05 8.91 Dentsu 2.0% 2.12 9.17 Y&R 1.8% 2.19 8.95 McCann 1.7% 2.50 8.70 Hakuhodo 1.0% 2.00 9.49 OMD 1.0% 2.22 7.94 Asatsu-DK 0.9% 1.50 9.32 LOWE 0.8% 1.83 8.85 Kinetic 0.7% 1.60 8.80 MEC (Mediaedge:cia) 0.7% 2.00 8.21 Publicis 0.7% 2.29 8.30 Go React 0.6% 1.50 8.04 Havas Creative 0.6% 2.00 8.49 PurpleClick 0.6% 2.00 6.86 Grey 0.6% 2.20 9.26 Ace:Daytons 0.6% 1.75 8.95 Group M 0.6% 2.20 8.00 MediaCom 0.6% 2.50 7.15

Top brand consultancies by agency rankings Figure 13: Top 25 brand consultancies by agency rankings for 2014 - Singapore Top 25 Brand Consultancies (by spontaneous agency rankings) % Share of agency rankings Average Rank (out of top 3 ) Agency Performance Index (API) Ogilvy & Mather 10.2% 2.04 9.38 Futurebrand 6.0% 2.06 7.95 DIA 2. 2.14 6.81 DDB 2.3% 2.00 9.07 Interbrand 2.1% 2.17 7.43 Saatchi & Saatchi 2.1% 1.80 6.49 TBWA 2.1% 2.17 8.91 BBDO 1.9% 1.50 6.06 Landor Associates 1.9% 2.33 8.74 McCann 1.7% 2.20 6.69 BrandStory 1.7% 2.50 6.53 Brand Union 1.7% 1.75 9.38 AS Louken 1. 2.40 6.52 Dentsu 1. 2.40 8.75 Asatsu-DK 1.4% 2.25 9.45 BBH 1.4% 2.25 8.26 Brand Courage 1.2% 1.00 8.93 John McNeil Studio 1.2% 1.00 9.20 Publicis 1.2% 2.50 8.78 Ruder Finn 1.2% 1.00 6.83 Anthem Worldwide 1.0% 1.50 9.17 Grey 1.0% 2.75 6.93 Immortal 1.0% 1.50 9.17 JWT 1.0% 2.75 5.95 Strategicom 1.0% 1.50 7.00

Key Industries for Creative Services From 2014 to 2015, creative agencies should focus on clients in Education, Automotive, and Energy, Utilities & Government industries for largest growth opportunities. However, key client accounts still likely to come from top spender industries in creative services Consumer Products, Financial Services, Arts & Entertainment, IT/Telecoms, Travel, and Healthcare.

Low growth of creative services expenditure among most top spenders Growth in creative services expenditure (CAGR from 2013 to 2015) Creative agencies will need to focus on Education, Automotive, Energy/Utilities & Government industries for growth; Key client accounts will still come from top spending industries in creative services despite relatively lower growth. Figure 14 shows the industry opportunities for creative services in Singapore. To give insight into the comparative potential of client industries for creative services across sectors, clients projected growth in expenditure from 2013 to 2015 is plotted against the current spend size for all industries in Singapore. Education is a key sector for creative agencies, being the only high spending industry of creative services that is also expecting high growth in creative services spend from 2013 to 2015 (Figure 14). For growth opportunities, creative agencies should focus primarily on clients in the Automotive and Energy, Utilities & Government industries, where Figure 14: Industry opportunities for creative services for 2014 Singapore growth of creative services expenditure is expected to be the highest from 2013 to 2015. Key client accounts for creative agencies will still come from the top spending industries in creative services. Despite relatively lower growth among industries, clients in Consumer Products, Financial Services, Arts & Entertainment, IT/Telecoms, Travel, and Healthcare will continue to be important due to their historically large media budgets. The factsheets in the next few pages details the unique agency relationship, marketing budget profile and preference for creative agencies for key industries for creative agencies (i.e. high spend and/or high growth industries in creative services). Lowest growth Highest growth Lower spenders, higher growth Business Services Lower spenders, higher growth Engineering & Manufacturing* Logistics* Media Owners Property Retail Automotive* Energy, Utilities & Government* Travel Healthcare Education IT/Telecoms Financial Services Arts & Entertainment* Higher spenders, higher growth Consumer Products Higher spenders, lower growth Lowest Spenders Average spend per company on creative services Highest Spenders

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Education industry deep-dive Figure 15: Industry fact sheet for 2014 Education* in Singapore Education: Higher spenders, higher growth in creative services Average Singapore Client Marketer Average Client Marketer in Education Industry $1 - $100k 30% $1 - $100k 46% $100k - $250k $100k - $250k $250k - $500k 1 $250k - $500k 18% $500k - $1m 12% $500k - $1m 4% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 0% 0% 7% 14% US$3.80m Average marketing spend per company in Education 7% 14% 24% 21% Other areas 3% 4% 27% 2 14% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.00 1.84 All work done in-house % change from 2013 to 2014-6% All work done in-house % change from 2013 to 2014-1 Retainer basis 23% -6% Retainer basis 19% -3% Project basis 61% 13% Project basis 70% 18% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 4% 1 81% *Note low base interpret with caution

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Energy & Government industry deep-dive Figure 16: Industry fact sheet for 2014 Energy, Utilities & Government* in Singapore Energy, Utilities & Government: Lower spenders, higher growth in creative services Average Singapore Client Marketer Average Client Marketer in Energy, Utilities & Government Industry $1 - $100k 30% $1 - $100k 24% $100k - $250k $100k - $250k 18% $250k - $500k 1 $250k - $500k 18% $500k - $1m 12% $500k - $1m 24% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 0% 0% 6% 12% US$4.18m Average marketing spend per company in Energy, Utilities & Government 14% 7% 24% 21% Other areas 6% 8% 12% 19% 27% 19% 9% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.17 1.82 All work done in-house % change from 2013 to 2014-6% All work done in-house 6% % change from 2013 to 2014-10% Retainer basis 23% -6% Retainer basis 12% -14% Project basis 61% 13% Project basis 82% 24% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 6% 12% 82% *Note low base interpret with caution

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit IT/Telecoms industry deep-dive Figure 17: Industry fact sheet for 2014 IT/Telecoms in Singapore IT/Telecoms: Higher spenders, higher growth in creative services Average Singapore Client Marketer Average Client Marketer in IT/Telecoms Industry $1 - $100k 30% $1 - $100k 28% $100k - $250k $100k - $250k 13% $250k - $500k 1 $250k - $500k 4% $500k - $1m 12% $500k - $1m 13% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 0% 9% 9% 24% US$5.00m Average marketing spend per company in IT/Telecoms 14% 7% 24% 21% Other areas 10% 17% 33% 8% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.33 2.03 All work done in-house % change from 2013 to 2014-6% All work done in-house 22% % change from 2013 to 2014-1% Retainer basis 23% -6% Retainer basis 28% -2% Project basis 61% 13% Project basis 50% 3% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 17% 13% 70%

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Consumer Products industry deep-dive Figure 18: Industry fact sheet for 2014 Consumer Products (FMCG) in Singapore Consumer Products: Higher spenders, lower growth in creative services Average Singapore Client Marketer Average Client Marketer in Consumer Products Industry $1 - $100k 30% $1 - $100k 19% $100k - $250k $100k - $250k 10% $250k - $500k 1 $250k - $500k 17% $500k - $1m 12% $500k - $1m $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 10% 12% 21% US$6.93m Average marketing spend per company in Consumer Products 14% 7% 24% 21% Other areas 18% 7% 9% 10% 20% 2 14% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.35 2.33 All work done in-house % change from 2013 to 2014-6% All work done in-house 7% % change from 2013 to 2014 - Retainer basis 23% -6% Retainer basis 41% -8% Project basis 61% 13% Project basis 52% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 18% 67%

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Healthcare industry deep-dive Figure 19: Industry fact sheet for 2014 Healthcare* in Singapore Healthcare: Higher spenders, lower growth in creative services Average Singapore Client Marketer Average Client Marketer in Healthcare Industry $1 - $100k 30% $1 - $100k 22% $100k - $250k $100k - $250k 13% $250k - $500k 1 $250k - $500k 13% $500k - $1m 12% $500k - $1m 4% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 0% 9% 9% 30% US$5.61m Average marketing spend per company in Healthcare 7% 21% 14% 24% Other areas 7% 8% 10% 29% 19% 12% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.00 1.94 All work done in-house % change from 2013 to 2014 All work done in-house % change from 2013 to 2014-6% 9% -10% Retainer basis 23% -6% Retainer basis 17% -12% Project basis 61% 13% Project basis 74% 23% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 91% *Note low base interpret with caution

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Financial Services industry deep-dive Figure 20: Industry fact sheet for 2014 Financial Services in Singapore Financial services: Higher spenders, lower growth in creative services Average Singapore Client Marketer Average Client Marketer in Financial Services Industry $1 - $100k 30% $1 - $100k $100k - $250k $100k - $250k 14% $250k - $500k 1 $250k - $500k $500k - $1m 12% $500k - $1m 19% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 27% US$4.06m Average marketing spend per company in Financial Services 7% 21% 14% 24% Other areas 13% 13% 8% 21% 27% 12% Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.17 1.87 All work done in-house % change from 2013 to 2014 All work done in-house % change from 2013 to 2014-6% 17% 3% Retainer basis 23% -6% Retainer basis 36% -1% Project basis 61% 13% Project basis 47% -2% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 3% 17% 81%

Usage of pitch consultant Agency remuneration model Average number of agencies used 2014 marketing budget allocation 2014 marketing budget (US$) Singapore 2014 Creative Agency Rankings & Strategy Toolkit Travel industry deep-dive Figure 21: Industry fact sheet for 2014 Travel in Singapore Travel: Higher spenders, lower growth in creative services Average Singapore Client Marketer Average Client Marketer in Travel Industry $1 - $100k 30% $1 - $100k 26% $100k - $250k $100k - $250k $250k - $500k 1 $250k - $500k 19% $500k - $1m 12% $500k - $1m 10% $1m - $5m $5m - $10m $10m - $20m More than $20m 3% 2% 17% US$3.12m Average marketing spend per company in Singapore $1m - $5m $5m - $10m $10m - $20m More than $20m 2% 6% 4% 23% US$3.49m Average marketing spend per company in Travel 14% 7% 24% 21% Other areas 13% 14% 13% 18% 21% 1 Other areas Creative agencies Creative agencies Brand consultancies 1.30 1.97 Brand consultancies 1.18 1.91 All work done in-house % change from 2013 to 2014 All work done in-house % change from 2013 to 2014-6% -8% Retainer basis 23% -6% Retainer basis 39% 2% Project basis 61% 13% Project basis 50% 6% Use Plan to use Do not use 7% 14% 79% Use Plan to use Do not use 8% 1 77%

Annex

Annex 1: Methodology This report is based on the responses to selected questions from the Marketing Spend Benchmarking Survey 2014, which was undertaken during January 2014. The data was collected via an online questionnaire which was completed by a total of 1223 respondents from Hong Kong (n=419), Singapore (n=489) and Malaysia (n=315). Genuine advertising decision-makers and influencers across industries were well represented in the survey. Across all three countries, 100% of respondents were client-side marketers/ communications professionals, and about 80% were manager-level decision-makers and above, with at least 3 from the most senior ranks C- level/vp/director-level marketers. A detailed breakdown of Singapore respondents by seniority levels, business-to-business (B2B) vs. business-to-consumer (B2C) marketing focus, company size and industry is shown in the next page. Only aggregate results are published, and individual company information is held in strict confidence with Marketing Research. The results reported are considered the most accurate reflection of client marketers preference for marketing and advertising agencies, marketing budgets size, allocations and expected growth, as well as trends in the marketing landscape in this region, because all the analyses are based on primary research findings directly reported by those closest to the actual marketing budgets planning client marketers. About Marketing Research Marketing Research is the market research division of the Marketing magazine. With its extensive databases, highly respected brands and deep relationships with industry leaders and senior decision-makers, Marketing Research is in a unique position to provide insights to businessto-business (B2B) decision-makers in Asia in the form of benchmarking reports, market sizing data, agency and vendor rankings reports, and best practice reports, all of which are distributed online via the Marketing Research Centre at www.marketing-interactive.com/research. In addition to its suite of syndicated reports, Marketing Research also provides specialized customized research services to leading companies. Marketing magazine is published by Lighthouse Independent Media, which also publishes other B2B media brands. For more information about Lighthouse Independent Media and its brands, please refer to www.lighthouse-media.com. Report Contributors Jessica Li, Research Director Marketing Research Quek Eng Peng, Research Analyst Marketing Research Emily Gong, Research consultant

Annex 2: Sampling Marketing Research interviewed 489 respondents in Singapore across various seniority levels, who are key decision-makers or influencers of all marketing, media and advertising decision-making for their company. This research was conducted across 15 industries with a good sample mix consisting of small, medium and large corporations of both local as well as regional market presence. The research sample includes marketers who are in charge of B2C marketing as well as B2B marketing. Detailed respondent profile as shown in following charts: Profile 3: Seniority in the company 21% 6% Top Management Vice Presidents/ Directors 26% Managers Executives 47% Profile 1: Industry Profile 4: Company origins & operations 6% 8% 9% 10% 9% 1 10% 12% Media Owners Consumer Products Travel Property IT/ Telecoms Business Services Financial Services Education Retail 23% 53% 24% Local based organisation operating in local market only Local based organisation operating in more than one country Organisation based outside of local market Healthcare Others Profile 2: Company size Profile 5: Business type 29% 4 Small companies Medium companies Large companies 49% 51% Business-toconsumers (B2C) Business-to-business (B2B) 26%

Annex 3: Definitions and exchange rates DEFINITION OF INDUSTRIES Arts & Entertainment: Art houses, theatre companies, museums and entertainment resorts. Business Services: Accounting firms, law firms and organizations that provide training and development. Travel: Airlines, travel agents, hotels, resorts, and food and beverage. Retail: Physical stores with a cash register, and online stores that accepts payments. Financial Services: Banks and insurance companies. Automotive: Companies that sell and lease motor vehicles and parts. IT/Telecoms: Computer and telecommunication manufacturing and services. Consumer Products: FMCG companies (fastmoving consumer goods). Healthcare: Hospitals, clinics and pharmaceutical companies. Energy, Utilities & Government: Power and gas companies, and all public administration organizations. Property: Real estate, construction and building, engineering, metal works, and piping. Education: Private and public education institutions. Logistics: Transportation services, couriers services and corporations that specialize in relocating executives. Education: Private and public education institutions. Engineering & Manufacturing: Mining and agriculture. Media owners: Companies that own any type of online or offline media that marketers can advertise on, including publishers, website owners etc COMPANY SIZE Small: Companies with local headcount of less than 100. Medium: Companies with local headcount between 100 and 500 inclusive. Large: Companies with local headcount of more than 500. EXCHANGE RATES 1 USD = 7.76 HKD 1 USD = 1.23 SGD 1 USD = 3.04 MYR (Note: Exchange rates used are based on fieldwork period in January 2014)