Since Asia's economic crisis began in Thailand mid-2006, events in Thailand have often proved a forerunner of those elsewhere.

Last year, budget cuts on caused total Thai advertising billings to fall by 8 percent to 38 billion Baht, according to Advertising Association of Thailand. The Association also reckoned that around 20 percent of Thailand's 250 advertising agencies closed down last year.

For the survivors, it is not business as usual. Recession has dealt a sharp blow to the concept of traditional "full service" agencies. Many Thai advertisers are looking to reduce advertising costs by turning both to independent media houses, where commissions may be 3-4%,( compared with 15-17.65% traditionally charged by agencies), and to low cost creative or production boutiques to churn out the ads. MindShare, Zenith, Starcom and the like have helped Western agencies respond quickly to change.

And now it is Dentsu's turn to respond. Seventh-ranked Dentsu (Thailand) is now seeking a partner to set up a media company. According to interviews with Dentsu Thailand's president Kazuhiro Nobuta, the initiative is the first step in a longer term plan by the agency to overhaul its entire billing structure, and move towards a fee-based system of payment. The move was prompted by the growing number of cash-strapped companies in Thailand rejecting traditional agency commission levels. "We are re-appraising our business and are looking for strategic partners who have the same working chemistry to survive this situation. It is now very difficult. If the industry doesn't move to a different system, 50 per cent of all agencies in Bangkok will collapse," Nobuta reportedly said.

While unwilling to show its hand, a spokesman for Dentsu in Tokyo conceded that "some of the Dentsu agencies in Asia are studying possible counter measures to protect themselves against the inroads being made by media companies penetrating their business in each market." "This, therefore, means more than just the feasibility of setting up media companies. This is also not just about Dentsu (Thailand)," added the spokesman, declining to elaborate further.

Of course it need not have worked out like this. For much of 1998, Dentsu was talking to Tempus about the possibilities of the two working together in Asia. According to one source familiar with the talks, an Asian business model could have been developed from CIA's partnership with CDP in the UK, with CIA providing media services to a number of Dentsu agencies. Those plans however foundered when Tempus made it clear they would also with to open in Japan. Working closely, on a network basis, with an independent media company was also a worrying idea to some Dentsu executives who hesitated at the idea of 'outsiders' becoming privy to Dentsu's workings on such a broad scale.

While boosting critical mass, working with local partners in a number of countries is hardly likely to improve Dentsu's grasp of modern media planning technologies, the service Western agencies have rapidly rolled out across Asia. Though the planning penny has yet to drop, Dentsu nonetheless is steadily becoming a stronger competitor for international agencies in Asia. Last year, for the second year in succession, Dentsu emerges as the top agency in Taiwan.