"We were enormously interested in size, but the mission now is to translate size into quality of the end product both the creative itself and the level of service we give our clients,"says Moriera."My job is to bring a professional orientation, rather than thinking just of size or finance, and that is what I am working on."

As agent of change, Moriera is supported by three Asia veterans as deputy regional directors. In Tokyo, home to McCann's most prominent Asian shop, Koji Oshita oversees Japan and Korea. Oshita joined McCann in 1960, when it opened in Japan, and rose to become president and now chairman of the agency there. From Singapore, Brian Watson looks after Greater China (the mainland, Hong Kong, and Taiwan), Southeast Asia and four developing markets: Indochina, Indonesia, India and Pakistan. And in Sydney, Tony Hanmer has responsibility for Australia, New Zealand and the Pacific. Last May, the company added additional support to Japan when it dispatched John Fitzgerald, former vice chairman of McCann North America, to Tokyo to become president and ceo of the operation there. Moriera has kept his base in New York, arguing that's where McCann's multinational clients plan their pan-Asian strategies.

"I'm in New York to make sure my region is represented at decision time," he says.

. But he spends about half his time in Asia, alongside his three field marshals.

"They know what they are doing; I shouldn't be looking over their shoulders. My role is to bring added professional value to what they do. I'm trying to contribute strategic thinking and quality to the work itself," explains Moriera.

Strategic thinking, focused on a deeper understanding of Asia's rapidly changing consumers, is the core of McCann's new Asia vision. Moriera has appointed Chris Beaumont, head of Infoplan, McCann's research subsidiary in Tokyo, as chief strategy officer for Asia. Beaumont's role is to help McCann's Asian offices understand consumers and their relationship with brands better than anyone else.

"More than ever before, a sensitive understanding of consumers is pivotal to developing advertising and marketing strategies," says Beaumont.

McCann's need for new vision stems directly from the dramatic changes that have shaped Asia in the last two decades. Growing populations, rising incomes and increased opportunities for education have created a new and increasingly affluent Asian middle class. By the year 2000, the number of non-Japanese Asian households earning $18,000 annually is expected to increase fourfold to 75 million. Nearly half of the people in South Korea, Taiwan, Hong Kong and Singapore are now considered part of the middle class. In Thailand, Indonesia and Malaysia, nearly 20% are headed the same way. As a result, new market forces have come into play, creating opportunities that are challenging and more complex than before.
Alongside Asia's transition to prosperity has developed a newfound sense of national pride, a regard for each country's own culture and values, and a sensitivity to how cultural values are reflected in advertising. Increasingly, a local touch is necessary to reach the Asian consumer. Centrally controlled global advertising strategies, which were common currency in the 1980s, have run their course. For McCann, this has meant an about-face from the way it has traditionally worked for many clients. The agency still handles its founding clients in Asia--Coca-Cola, Nestle, Unilever, Del Monte, Gillette, Nabisco, Esso and General Motors--in 10 or more markets across the region. More than 20 other multinationals have joined the roster, many for advertising in several countries, including Hong Kong's Cathay Pacific Airways, which appointed McCann in 1993 for 28 countries, and Ferrero, which added McCann last year for 13 countries. McCann says only about half of its Asian business comes from Western multinationals, or "system clients," with the balance from local companies. The ratios vary considerably, from 100% local in Brisbane to 100% system in Vietnam. Japan, its largest market, hovers around the midpoint. Some agencies, such as those in Japan, Hong Kong, Taiwan and Singapore, handle over 30 system clients each.

"We are enormously fortunate to have the kinds of clients we do, and to have been able to pioneer [advertising] in the countries they went to," says Moriera. "For several of these clients, the idea of centralized control, the idea of 'one sight, one sound, one sell,' was very, very important. For the many decades where that was the word, I think McCann delivered in spades." As Asia changed, however, cultural factors gained importance, and markets broke down into more discrete stages of development. "There has been a rapid evolution from global to multicultural advertising. The idea of one sight, one sound, one sell has become passe," says Moriera. "A brand can have a consistent personality, but it may need many different expressions. We understand that well. Having lived through the phase of centralized control, we understand the importance of relevance and cultural fit to this new world. That is what I'm trying to do in Asia."

The shift in vision came too late to satisfy longtime McCann client Coca-Cola. This February Coke moved its creative for Greater China (China, Hong Kong and Taiwan) from McCann to a combination of DMB&B and Batey Ads. Ian Rowden, vp, Coca-Cola China Holdings, says McCann had "stayed in the past with Coca-Cola advertising and hadn't come up to date with where the brand is today." It was a tough blow, coming shortly after Coke brought Hakuhodo on board to develop launch creative for Fruitopia in Japan and pulled Japanese media buying from McCann in favor of Dentsu, which has formidable media clout in the region. "We were disappointed. Financially it was not a substantial loss, but emotionally it is, and we are determined to correct that," says Brian Watson. The loss was all the more painful because China is Watson's top priority for growth. McCann has been in China since 1979 and has majority ownership of a national joint venture started in 1991 with Guangming, the mainland's second largest newspaper publisher.
The loss was a catalyst for McCann to restructure its China, Hong Kong and Taiwan operations. The new organization, called McCann-Erickson Greater China, unites the agencies in Taipei, Guangzhou, Beijing, Shanghai and Hong Kong. "[The Coke loss] was one of the stimuli to our reorganization," says Watson. "Many of our clients are looking at the three Chinas as one market and managing it as such. Coca-Cola is doing that, and other clients are moving in the same direction." But for most clients, the McCann system performs consistently well. "We use them in just about all the markets of Asia. That association has been ongoing for all of the 12 years I've been in the area," says Norman Roberts, vp of Gillette Asia/ Pacific in Singapore. "They are partners in our business, which is growing dramatically. There are no obvious weaknesses that come to mind." Tim Fitzsimmons, Cathay Pacific's general manager for marketing, says, "We've found two great strengths in working with them. The first is some excellent creative work. The second is that they bring consistency and discipline to our worldwide communications, which we haven't had before."
Greater China may be the Asian economic powerhouse of tomorrow, but until then Japan remains the region's unrivaled superpower. About 60% of Asia's advertising budgets are spent in Japan, and McCann's agency there, with $852 million in billings, is its biggest shop worldwide. Japan is also a stagnant market, however, with little prospect for growth in the near future. Total ad spending last year increased a mere 0.8%, to 5.2 trillion yen, and that was the first increase in three years. In Japan, too, McCann's old order is changing. At the start of 1994, McCann's 34-year joint venture in Japan with Hakuhodo, the country's second largest agency, came to an end. The parting was amicable: McCann had established its foothold in Japan, and Hakuhodo had gained experience in Western agency practices. "It worked out well for both of us," comments Takashi Shoji, Hakuhodo's president. McCann already held majority ownership and management control of the joint venture, so no business was lost, but some of McCann's Japanese executives think the separation made the company feel "a little lighter." In May of that year, when John Fitzgerald moved from McCann's New York headquarters to Japan, he arrived at a time not only of change for the agency, but crisis for Japanese business as well.

Japanese companies are now facing at home the [economic and competitive] problems their counterparts face in other advanced countries," says Fitzgerald. "We bring a frame of reference that combines an intimate understanding of the Japanese marketplace with a global perspective--we know what's going on in the rest of the world. This combination enables us to deal with the current business situation in Japan, where companies are interested in some non-conventional Solutions."

A New Yorker with boundless energy, Fitzgerald came to Tokyo looking for fresh challenges. He quickly set about updating the U.S. ingredients of the bicultural agency's style. Out went much bureaucracy, in came matrix management and multidisciplinary teams to develop business opportunities. He also brought staff numbers down to less than 500. An early retirement program, an unusual approach in Japan, enrolled more than 50 staffers alone this spring. "I wish we could do the same," says a senior executive at a leading Japanese agency saddled with rigidly hierarchical management.
Fitzgerald was also instrumental in developing McCann's partnership in Japan with Wieden & Kennedy, a relationship that helped the agency win Nike this March. For a moment it seemed as if the new partners would win Nike's advertising throughout Asia, but the business for China went to J. Walter Thompson, McCann's closest rival. Undaunted, Fitzgerald remains committed to finding new solutions to build business in Japan. McCann's strength in Japan, where it is the country's ninth-ranked agency, lies partly in its ability to create opportunities to work elsewhere for its Japanese clients. Of McCann's 187 clients in Japan, 119 are Japanese corporations, many of which are marketing overseas. Internationally, McCann's Japanese clients include Casio in 26 countries, Canon in 13, Sega in 7, Sony in 9 and Fuji Photo Film in 5. "Developing these opportunities is an important priority," says Oshita. Much is changing in McCann's culture, but many of the core ideas from 25 years ago remain valid. Oshita says there are a couple of main reasons for the agency's success in Asia. "We go wherever our clients go, and sometimes we go ahead of them," he says. Second, "We've built our agencies from the grass roots, rather than looking for acquisitions, and wherever possible we have 100% or majority ownership. This means McCann culture is an intrinsic part of each agency. "The third reason is the people we have in each country. It all sounds deceptively simple, but it was by no means as easy as it sounds," adds Oshita. The entrepreneurial push that first led McCann to Asia is still important, since Asia's advertising map continues to change in unpredictable ways. India, Indonesia and Vietnam are all set to grow into major advertising markets, which will lessen Japan's dominance of the region. Watson already has operations working for system clients in each country. Just a short drive from McCann's Seoul agency, toward the 38th Parallel and through the tank traps, North Korea offers tantalizing prospects. McCann will be there alongside its clients, says Oshita. Adds Moriera,

"The excitement that exists in this company about Asia is unbelievable."