While David Cameron’s visit to Moscow on Monday, 12 September, can hardly be regarded a full ‘reset’ in quite ‘chilly’ UK-Russia political ties, it should definitely have a positive impact on strengthening bilateral business relations between the countries. Talking business without politics, Russia has long been and still is an appealing market for UK companies in some key economic sectors. Taking into account a growing number of Russian companies looking to create and develop strong national brands, and, on the other hand, Britain’s vibrant expertise in branding and design, UK and Russia seem to be ‘uniquely placed to help each other grow’ in this direction, indeed.
Some of the UK design industry stalwarts, such as The Brand Union, have realised that and made serious steps on their way to succeed in Russia. We were lucky to interview Simon Bolton, Worldwide CEO at TBU, who told us about the company’s plans and strategy in Russia, first achievements of the Moscow office, as well as discussed the current state of both Russian and UK brand and design markets.
E.B.: The Brand Union has got 20 offices in all parts of the world up to date, and the latest one was established in Russia, Moscow back in 2010. Why did you make a decision to enter the Russian market? What business opportunities vs threats do you see in this region in short and long terms for TBU?
S.B.: We believe the Russian Market is critical for The Brand Union. We’ve set ourselves the task of being one of the major international branding providers in the key emerging or emerged markets such as Russia.
We are there for 2 main reasons. Firstly, because we have multinational clients who are operating in the country and second because we see Russia as being a rapidly developing market with great ambition to build international brands from this national platform.
We did a good deal of research before entering the market, whilst we considered acquisition as a strategy for immediate entry we could not find the right partner or capability so then concluded that it was best to build The Brand Union bottom up.
E.B.: What’s your business development strategy in Russia — i.e. will you be serving the needs of existing global clients such as Henkel, JTI, SABMiller on the local Russian market or are you proactively looking for some new projects/clients, therefore, you might partner with some external communications/PR agency in Moscow to raise your media awareness?
S.B.: As I’ve already said we are there for our international clients but we also want to work with ambitious clients who have their eye on world growth. You are right that the awareness of The Brand Union is still low, but we have plans to grow awareness amongst the larger and most prestigious members of the marketing community. We have a bespoke process which we will encourage Russian Clients to engage with and in turn they can feel the full experience.
We are combining international and local Brand Union resources; we will also seek to build our range of external services to achieve our goal.
We want to be seen as the pre-eminent branding and design firm in the market.
E.B.: Over a year since December 2010, what major updates has happened at the Moscow office? Do you have a local team of designers, strategists, researchers in Moscow by now? Or do you ‘outsource’ the work for the Russian clients to other international offices within TBU network? What does the process look like?
S.B.: Ismael Ibnoulouafi, a long-term Brand Union leader (he originally launched our office in Paris over ten years ago) pioneered the office opening in Russia. Ismael and the team have achieved considerable progress since we opened in Moscow. We have a solid base of local resource, full- and part-time, capable of solving any client issues. Today some of our projects in Moscow are served only by the local team. We also do outsource some of the projects or branding challenges to The Brand Union international network. To date we have involved: London, Paris, Dublin, Johannesburg and New York, depending on the type of assignment and client needs and expectations. Recently we have a new addition on the ground to our management set up; the Moscow team will be led by Oleg Kuzmin.
Oleg has a rich background in communications (creative agency Y&R, marketing consulting Added Value, innovation and client side marketing at Mars Russia) and he is charged with the further TBU business development in Russia.
E.B.: In your opinion, which industry sector in Russia may need professional brand consulting, brand design and strategy services most? Retail? Real estate? FMCG?
S.B.: We see a lot of potential for the world-class branding expertise in categories where Russia is recently being strong: finance, real estate, retail, telecom. Next, some of the local internet resources represent an emerging area with a great need to build stronger and more focused brands. The Russian state, being behind some of the important social and political areas, like sports and Olympic Games, also can benefit from the best in class visual identity work — we are hoping a great deal in this sector.
We also acknowledge the hunger of the energy, telecommunications and financial service industries, companies such as Lukoil, Beeline, Sberbank and VTB are potentially global brand horses.
As for the major international FMCG clients, they tend to work more with their HQs when it comes to the global brands, leaving more basic and technical assignments to the local markets. Still, it makes a good sense for international FMCG companies to pay more attention to developing brand identity when it comes to the local brands. Unfortunately, sometimes you get the impression that this part of the work is being less cared for.
E.B.: I assume you must have conducted some market research before ‘landing’ in Moscow? What do you think of the Russian (Moscow) brand and design market in terms of supply vs demand? Do you see any strong competitors among established local brand & design service providers? Any names, figures?
S.B.: The Russian market for branding services looks very active and competitive. There are many strong and established local players, (like Depot WPF and Mildberry), with some new ones emerging all the time. The Cannes award to Depot this year marks a significant achievement for the local branding industry. Still, in terms of strategic depth and some extra added value services (like employees engagement, for example) the local players still have some development to make. Amongst the international networks the presence so far is more limited. And we are happy to be the first WPP branding agency in Russia for this purpose.
E.B.: On the other hand, looking at the UK, how can you describe the current state of Britain’s market of creative services (brand and design, in particular) — again, in terms of supply vs demand? Do you think that UK creative agencies (depending on their size and capabilities) might be interested in exploring so called ‘new’ emerging markets in attempt to find new clients?
S.B.: Thanks for showing interest in the UK. Yes I think it’s a sophisticated market that has all the different constituent players. There are the multi-nationals such as ourselves, although The Brand Union was born out of the provenance of Sampson Tyrrell, Terry Tyrrell still operates as our Global Chairman today, and Tutssels Design, and Glenn Tutssel is still the Executive Creative Director.
But of course there is a huge variety of other agencies here in London for those who are better known for pure strategic work as well as the independent design agencies. It’s a highly competitive market but it’s most exciting to see how multi-national it has become with strategists and designers coming from all over the world. I can tell you that The Brand Union London has about 110 people representing over 20 different nationalities and over 30 different languages. It’s literally a melting pot and very exciting as we move through the different gears.
What really distinguishes The Brand Union from some of its competitors is the ability to deliver a more rounded solution, since we believe the brand is the ‘organising principal’, we provide strong brand engagement.
E.B.: What would you recommend to your UK peers who are looking to enter the Russian/CIS market?
S.B.: Be bold and ready to work in a challenging context. Stay flexible to adapt to changing environment and conditions. Be ready to protect and assure your level of experience and expertise on the background of strong and still growing competition. Prepare to face some very challenging and demanding clients, which don’t take anyone just for a face value.