Features

Casey Loh on GOVT split: ‘It was the right time for us both to go on our own’

As part of Mumbrella's ongoing series examining Asia's independent agency scene, editor Eleanor Dickinson talks to the former GOVT Malaysia head about breaking away from GOVT to form The Clan, the Malaysian advertising scene and why he has embraced performance-based pay

When Casey Loh decided to break away from the agency he had founded five years ago, it was admittedly during one the worst financial years in Malaysia for some time.

As one of the original three founders of Singaporean independent agency GOVT, the creative chief had spent the previous three years building the company’s presence and client base in Kuala Lumpur, while his cohorts Aaron Koh and Leon Lai went on to win spate of major accounts on home turf. 

While from a distance things seemed rosy, out of the blue last summer, both Loh and GOVT suddenly announced their intention to part ways, with GOVT KL rebranding as The Clan. Other than the joint statement issued at the time, both parties have so far remained tight-lipped on what really went down before the severance.

Loh: “We wanted a change in direction.”

While GOVT continues to service its flagship client OCBC, The Clan has gone on the land its first longterm client with Malaysia’s U Mobile. A number of projects for Kose, Sunway Medical Hospital, Habib Jewels and Nespresso have also helped prop the agency up as Malaysia’s economy recovers from its currency dive and uncertainty around the upcoming general election.

Meanwhile, the agency has also closed in on GOVT’s territory with the tentative opening of an office in Singapore under the leadership of ex-We Are Social planner Yasser Ismail.

As The Clan prepares to close in on its first year, Loh outlines his vision for the agency’s direction and explains why he is optimistic about Malaysia’s advertising landscape in 2018.

Last year when you announced the split, you and GOVT were very coy about the reasons behind it. Can you share more now some time has past?

“It was a very amiable departure. We have always been here as GOVT Malaysia, but perhaps because of a change in direction and our point of view about business is different, we decided it was better to go our separate ways. It was a very honest and simple understanding.”

So how exactly is The Clan different from GOVT?

“Singapore is a very strategically aligned market; there are a lot of clients running through Singapore as their regional hub. Malaysia is very different, so we cannot do the same brand activation and work that Singapore does very well at. For us, the focus right now is on digital transformation; helping clients specialise and develop e-commerce.

“Our work is more geared to a shift in what clients want. Even our billing reflects this: we are billed through performance and a lot of clients, like Grab, are moving to that. Every time we meet a potential new client about business we propose that: we cap the fee at a certain point, but if we perform higher, the pay goes up. For example, does our campaign work drive acquisition and conversion? I won’t say GOVT don’t look at that; I’m sure they do, and can handle digital as well as we can, just the focus for us is more streamlined.”

Why did you pick the name The Clan?

“The name comes from our mantra: ‘We the people’, which is from the American Bill of Rights. And it’s about people first. We want to allow our talent to be a lot more independent: we want them to be able to run their own businesses. Our creative group head is a DJ; our former creative head is a tattoo artist and would tattoo clients. It just means a cluster of people: a ‘family’, although that name does not sound as cool. It’s about independent, individual talents coming together.”

Was it a difficult decision to split away and go completely independent? You must have had something of a backbone propping you up with the Singapore office. 

“Well I was part of the original three GOVT founders: Leon, Aaron and myself, with Tim [Chan, GOVT ECD] coming on board later. When we became a seven-man shop, I decided it was time to go back to Malaysia because there were opportunities there. But we never shared any clients. So when the split happened, it wasn’t daunting, but it felt like time lost. It was the right time for both parties to go on their own. Here, we were really keen to see what else we could do.

“When we then won the pitch with U Mobile, that was a good sign for us that we could be a real contender here. We were the only independent that pitched in a list that included TBWA, Ogilvy and Society. Sitting there just made me realise we really were independent: I couldn’t call Singapore for advice. But we put our heads down, did the work and won. And that gave us the assurance, that we can work everything out ourselves.”

You mentioned earlier that you see The Clan was moving into the digital transformation space. Given that’s an area even big creative shops are struggling with, how do you plan to succeed where others are struggling? 

“The transformation business is not easy and not everyone has a magic formula, but the consultancies have a step up. They have the data and they understand how to build sustainable, efficient agencies. Brand-building was for the agencies, but now they are buying agencies and have room to enter that space. And that’s where we are aiming for. It won’t be easy: we’re looking for a technology partner or a group of different companies to tap into. But it’s not something we can just buy or create ourselves; it needs to be moulded and re-moulded from experience.”

“The name comes from our mantra: ‘We the people’, which is from the American Bill of Rights. And it’s about people first.”

Going back to your comment about performance-based, some in the industry have said it’s become a necessity for marketers given their concerns around transparency and ROI. But where is the benefit for you as an agency? Doesn’t it leave the ball in the client’s court?

“I’ve been in the advertising business all my [working] life. And I have seen clients, not exploit agencies, but work explicitly towards their KPIs. Clients will ask any agency to given them their best price to meet these: and there is always someone out there who will say I can do it for half and then quarter. Being exploited is a matter of whether the client feels they get value from the agencies. All the news about click farms and ad fraud has made clients more sceptical about the value they get. So I feel that if we were really able to provide value and have a direct impact on the client, then they would be transparent enough with us to work towards profitable growth together.”

How are you weathering the troubled market conditions in Malaysia? Last year was difficult economically for the country surely?

“Last year was probably our worst: it was the toughest year for advertising and across the board. Property was very soft and our currency was so de-valued. It’s bouncing back now and everyone is holding their breath. 2016 was great and in the first three years it was easy to see growth. And now the market is looking more promising. There are the elections, which is difficult because no brands want to swear party allegiance, but it gives Malaysia an end in sight. We can all look towards what happens next; people put their budgets out and there’s a lot of optimism.”

Do you have a long-term plan or an exit strategy lined up for The Clan? There is a shift towards consultancies buying small, independent shops – would you consider those a viable buyer for you?

“It would be easy to sell to a consultancy. I have friends who are buying agencies. But the agencies being bought are not in the top tier, except maybe ADK and Bain. It’s not our ideal. If there is an exit plan, we would have to bring something of value to that business. Maybe a conglomerate model: The Marketing Group may not be the best example, but binding together as like-minded individuals who swap shares and who you drive towards change with feels more right for me – rather than just Deloitte saying here’s a blank cheque. But we would like to keep the business going and evolve so that The Clan can be bigger than just an agency or consultancy. We want to have brand and cultural-commercial value.”

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