UM parts ways with McCann Erickson Guangming Ltd to tackle China alone

Until this year, UM operated in the country as part of McCann Erickson Guangming Limited. Simon Woodward, who was appointed as CEO of UM China at the beginning of the year, will lead the new operation.

“This is an evolutionary process. UM’s independence means it is more consistent with UM’s operations in the US,” said Matt Seiler, global CEO of the agency.

While other media agencies parted ways from their local partners much earlier, Seiler said UM could benefit from the timing of its split. “I wish we had done this sooner, but there is an intuitive advantage to showing up late.”

According to one industry source, the decision to break away from Guangming could be part of UM’s need to position itself in a market where it has yet to establish itself as a strong player.

“UM cannot compete on scale with the likes of Mindshare, OMD and Carat,” said the source. “It needs to communicate more clearly what it stands for and what its offering is and this could be part of the reason behind this latest news.”

Ruth Stubbs, CEO of Mediabrands in Asia, suggested that UM’s particular focus could be in the digital space.

“We have an amazing digital team that has operated under a traditional agency structure,” she said. “We are going to invest and enhance this. We will see first-mover announcements in terms of our digital offerings.

While a joint venture arrangement was a necessity for international agencies when UM first entered the China market, the value of local partners has become less and less, from both a regulatory and business perspective.

“Foreign agencies have in the past relied on joint ventures to get into local business and build media and government relationships,” the source added. “But with the right talent,it is possible to do this alone, while at the same time build a strong brand.”

Seiler said the recent UM transaction will also help bolster Mediabrands’ offering of localised products and services for clients and reinforces its significant efforts to expand and deepen its marketing services operations across Greater China and Asia-Pacific.