Essence APAC CEO on why expansion into Malaysia is not yet on the cards

Essence, a global data and measurement-driven agency under GroupM, has footprints all across Asia Pacific (APAC) since starting with four employees in Singapore six years ago. Today, it has some 500 employees across nine offices in APAC, including Jakarta that opened last year.However, the team currently does not have operations in Malaysia. In an exclusive interview with Marketing, Essence APAC CEO Kyoko Matsushita said that currently, Malaysia’s activities are serviced out of Essence's Singapore office. While she wishes to expand into the market, Matsushita sees that not all companies are prioritising the shift towards digital and data activities yet.She said, "They want to [digitalise], but their internal structure is not necessarily allowing them. So, even if we want to help, we are sometimes limited. The key is identifying the kind of clients we can support and then, going into the market."So, would I go into Malaysia or not? I would like to, when we have the right business opportunity and partnership.While most clients now understand the importance of data and its powerful predictive capabilities, markets vary in the progress of having the infrastructure for measurement and data extraction. Markets such as Malaysia, said Matsushita, is probably still in the process of building it. Interestingly, using Japan as an example, she said the nation is not nearly as advanced as it is perceived to be. “You might think that the industry in Japan is far ahead, but no. Consumers are tech-savvy, but the back-end is not. In the United States, you don’t even discuss [back-end functions] because it’s already in place,” said Matsushita.Growth for EssenceMatsushita is of the view that agencies should grow with their clients - just as Essence has done with Google. Google was an entry point for Essence, which had about 50 people servicing the account in Singapore. With Singapore set up as a hub, Essence broke into the Japan market which Matsushita said is the third largest economy in the world and has a high spending."The Singapore hub team really helped Japan to take off. I brought about 10 people over to Tokyo to work and live there for six months. They knew nothing about Japan but they have the skills. When Japan stabilised, we made sure Singapore scaled up to service the rest of Southeast Asia. When a business is digital-first, some operations can be centralised, so we started to service multiple markets in Southeast Asia out of Singapore,” said Matsushita.In 2015, Essence was also able to ride on a wider support network after it was acquired by WPP’s media investment arm GroupM. It ventured into high-growth markets with a hunger for digital and innovation - namely India, Australia, Korea and Indonesia. Matsushita, who joined Essence a year after it was set up in Singapore, said that the acquisition expanded its horizons to become a full-service agency.According to her, Essence integrated with some of GroupM agencies a year ago and received new traditional businesses such as  television and outdoor. She said, “It allowed us to look at [clients] more holistically. What we are doing today is taking a step further and putting that data and measurement elements to the offline part of the business. How do you actually connect the impact of television all the way down to digital and conversion? You can only do it when [you see all of it]. It’s hard when you only manage digital."Future clients?Currently, the majority of Essence’s clients are from the technology and eCommerce industries, but Matsushita said she would like to help more “slow-moving” industries. Online education is one of which she has her eyes on.“There are more and more online education services. They will get data, but it’s still relatively new in this region. I think they will want to scale their business, and will need some consultancy and marketing to do so. Their product is already digital - it’s a good opportunity for Essence to go in and give some advice,” she said.Another industry that Matsushita thought has potential is the luxury market, where people enjoy the merchandise and want to purchase for others. While GroupM has quite a few big clients in the sector, it is still a new frontier for Essence. According to the Julius Baer Lifestyle Index, the cost of luxury living in 2018 rose 2.91% for its best yearly growth. The index continues to maintain its upward trajectory since its launch eight years ago, underscoring the strength in demand for luxury goods and services in Asia.Essence, whose mission is to make advertising more valuable, deploys campaigns in 71 markets via offices in Bengaluru, Chicago, Delhi, Düsseldorf, Jakarta, London, Los Angeles, Melbourne, Minneapolis, Mumbai, New York, Salt Lake City, San Francisco, Seattle, Seoul, Singapore, Sydney, Tokyo and Toronto. The agency is more than 1,700 people strong, manages US$4 billion in annualised media spend globally. Clients include Google, Flipkart, Nando's and the Financial Times.