Exclusive interview: Why KK Tsang remains bullish on the ad industry

It’s a freezing cold afternoon when I first meet KK Tsang, founder of The Bees Group, at his humble North Point office. Tsang, arguably the most affable advertising agency boss you could hope to meet, sat down with Marketing to share his views about the future of Hong Kong’s ad industry, the role of independent agencies and why he left the biggest job in media to launch a start-up.

What were the reasons for leaving GroupM to start an independent agency?

GroupM is a maturely developed media agency that won’t see any groundbreaking change within the next eight to 10 years. As the biggest media agency in the world, GroupM will easily remain in a profitably survival stage.

I’ve been with the industry for over 24 years. There’s no longer any incentive for me to jump around global agencies which are smaller than GroupM, the moment for me kicked in when I asked myself why not venture out and start my own business.

What’s your business philosophy?

Through entrepreneurship I try to bring out three messages, namely:

Self-strengthening: An advertising man should be equipped with a risk-taking spirit and the courage to try and to take adventure.

By chucking in a high paying job for a less profitable fresh start, which has never been an easy task, I am setting an example to all advertising fellows that taking risks creates opportunities for success.

Profit-sharing: Very seldom do global agencies employ a mature profit-sharing system and too often they see no profit-sharing at all. I believe the scheme helps enhance staff motivation, employee loyalty and productivity within the agency.

Strong adaptation: The market environment has been changing most rapidly within the recent 10 years mainly due to the evolution of digital media. It is the survival of the fittest; only those who conform to the changing trend stay firm in the market.

Can you share with us the direction of your firm?

I haven’t really had a well thought out plan to start off my agency. The launch of Secret Tour Hong Kong is merely by a stroke of luck after the first arm The Bread Digital broke even.

That being said, I built my business on one simple blueprint – the 3Cs in communication, namely, content, channel and consumer. This is how we differentiate ourselves to other independent agencies.

Apart from local clients, we secured a slew of brands on a global scale, including Unilever, AmorePacific, Burt’s Bees and LG to name but a few.

What changes do you see coming in the media space?

Advertising is an industry that will only move forward and not in reverse. I don’t buy the saying that advertising is a sunset business or even a dying business. The industry is now undergoing a transition from traditional to digital and it changes the way people consume media. People of this generation are seeking more participation and collaboration from the media than ever before. Social media emerges in the midst of increased participatory needs.

That being said, traditional media shouldn’t cede its role. Local television viewership, for instance, steadily maintained its rating points at 20. TV remains central to media consumption as it is able to reach out to a large pool of audience simultaneously.

Never once in the advertising industry have we seen any media overtaking another. From newspapers, radio, television, digital to social media and mobile, they are all keeping pace with each other since the day they are born. In many ways, they serve as a complement to one another.

What are the prospects for independent agencies in the long run?

Independents are going head-to-head with global brokers, but still have plenty of room for growth. Low cost production, higher client intimacy and, what’s more, deeper local insight.

Some might argue internationals can also provide local solutions, however, the term “global consumer” doesn’t really exist.

In China alone, consumer behaviour differs hugely across provinces. IKEA’s Ludwig saga was one example of insufficient local capacity from a global firm.

Looking down the road in one to two years, the number of local agencies will keep on growing. We’ve seen some brilliant local work lately from Metta Communications or Turn Creative that has won widespread public approval in the city, and this is absolutely the way forward.

Any advice for independent start-ups?

Many new independent start-ups treat their firm as a job more than a business. But they need to have a bigger vision because agencies are scrambling for a limited pool of talent. Nurturing and retaining young talent is important for business succession, so as to contribute to the community.

Any last word for ad industry freshmen?

Advertising is a sustainable industry and the future should be promising. There will be hurdles lying ahead, but what’s important is to persist and carry on. The more problems you solve, the greater fulfilment you gain.