 address, will Asia fulfill its velocity promise? And here comes another very highly awaited session wherein unlocking answers to very thought-provoking topics. Will Asia fulfill its velocity promise? Who better to throw some light on where to find growth in Asia than our next speaker? Well, ladies and gentlemen, he's none other than Kent Vertine, the co-CEO Ogilvy Asia-specific. Well, Mr. Vertine has lived and worked in Asia for the past 30 years and has held very senior advertising and marketing positions based in Hong Kong, Bangkok, Tokyo and Singapore. His tenure with Ogilvy began in 1999, where he joined Ogilvy to head up the Ogilvy's Interactive Division. Mr. Vertine helped Ogilvy establish the largest interactive agency operations in Asia with offices in 12 markets. In January of 2004, he was promoted to the president of Ogilvy One Asia. In March of 2009, Kent moved to Japan and took on the added responsibility as the president of Ogilvy Japan. In 2010, Mr. Vertine was promoted to the chief operating officer and in 2016, he was named the co-CEO of Ogilvy Asia-specific. Thank you so much, Kent, for joining us and giving us your valuable time today at the E4M Conclave and to all the ones who are viewing this live. Do type us any questions if you could direct us to Mr. Vertine if time allows towards the end in the Q&A tab. Thank you so much, Kent, for joining us. I'd now like to pass the screen and stage over to you. Wonderful. Thank you for that introduction. Thank you for the invitation to speak with you today. Let me just pull up my slide so we can all see this. Okay, so wonderful. So I'd like to add to the discussion at the conclave by perhaps stepping back and looking at a very big picture question, which is really around growth and the future of growth and whether the growth that we saw and expected in Asia just a year ago is realistically going to materialize over the next couple of years and critically what are going to be the issues that will potentially stand in the way or need to be modified in our thinking about growth. I'm going to focus really on sort of three big topics in this. First of all, I'd like to talk a little bit about velocity and what we've seen or what we at least were expecting prior to COVID. I'm going to focus on some of the stats and the insights that we're gaining about the impact of COVID on some of the velocity drivers, some of the major factors that have been helping drive growth over the past several years, and then talk about some of the priorities at the end going forward. I think it would be fair to say that COVID has really been, if nothing else, a global stress test. And in the world of medicine or in the world of banking, stress tests often show a number of different things. Obviously, there are in systems immediate failures. And of course, we can look back across the year and see businesses shuttered. We can see failures in governments. We can see failures in health systems. And those are really the things that we can point to a year on that were the most immediate impact. I would argue that we're still very much so in the stress test. And the coming year will show potentially further fractures. These are not necessarily things that immediately fold, but that over time, businesses that are not able to continue to keep up, government systems that start to fail over time through lack of funding, and really sort of the echo of the economic impact that we're seeing right now. Ultimately, this really is about systemic change and what is accelerated through the stress test and what decelerates through the global, the ongoing global stress test. And I think the big concern, of course, is that one of the things that will be impacted longer term is really the global growth model that I think we all became fairly accustomed to prior to the edge of COVID. Now, as we sort of start out 2021, we do look at China in the end of 2020 and see that, in fact, China managed to get back to some growth. So there's nothing foretold that the future is going to be a bleak one that the world can't or won't recover in many ways the way it was prior to COVID. But I think there's also some really good arguments to be made and questions to be posed about the longer term changes or stresses to this global growth model. And in particular, I want to focus today on the issue of the middle class, at the growth of the middle class, but in particular the emerging middle class. And I guess there is a very big question right now, given the hit that a number of economies have taken as to whether this emerging middle class will emerge. And I don't think we can underestimate particularly on a global scale, but when we talk about Asia, the real impact of the global middle class and what it has done to the world in terms of reshaping the world over the past few decades. When we step back and look at the growth of the middle class, we see, of course, an enormous change that has happened in places like China and, of course, India. And also a view that a number of other markets around the world, particularly in Southeast Asia, large markets such as Indonesia, Vietnam, Thailand, will continue to have and will continue to add middle class growth, not to necessarily the detriment of the, quote unquote, Western countries, but really in outstripping and reshaping the contours of the middle class world. And, of course, when we look at the output we have seen, the dramatic changes over the decades, for a very good reason, Asia has been looked to and continues to be looked to as the source of future growth, particularly around the middle class. We've seen that, of course, in China. I don't think in the last 20 years there's been any more dramatic shift than it can be seen in what's happened in both the consumerism, but also the society in China. Of course, economic increases bring about a number of social impacts. We've seen up until COVID an enormous rise in things like Chinese tourism, which has really been a juggernaut of the tourism industry around the world, the rise of entertainment, the Chinese box office, similarly shaping and reshaping the world of entertainment, the rise of the digital society, and in particular commerce in China. So, of course, with economic growth comes a number of related changes, the least of which, of course, that I should talk to is the importance of the decline of poverty. The reality is that, while a lot of people have focused in the past few years on talking about the global cry of inequality and the wealth disparity amongst the richest and the poorest, on a PPP basis, there have been many more middle class consumers who have become enfranchised around the world. And the question, of course, is, with the COVID hit and what it's doing now to the loss of jobs and the changes of economies, whether that move towards equality, at least on a global basis, will go in December verse, and in fact, in some decline. The question also that we have to ask is, will the next billion middle class, the emerging middle classes, such a vital part of future economic growth, will it emerge and will it emerge in the way that people had projected for it to? China will, of course, if it gets back to its typical growth, continue to add a lot of middle class consumers. But I think what the expectations have been from the projections that have been done in the studies, including our own velocity study that we did, looking at modeling out future growth, is really looking at a future shift to South Asia becoming much more the epicenter of middle class growth and emerging middle class growth in the next 10 years. We did some modeling a couple of years ago looking at where the likely arc of global growth would come from. And not surprisingly, countries such as India, Pakistan, Bangladesh, but also Southeast Asia and Indonesia, Vietnam, Philippines, we're seen as being central to that growth. And of course, not limited only to Asia, but of course, in Africa and continuing in South America. And we need to look to the future to see whether in fact, that will be a realistic arc of growth. I want to stress, though, that this isn't just about economic growth. When we talk about velocity and the impact on the economic growth on consumer life, it really relates to the pace in which daily life social structures and public sentiment changes how societies continue to change. Throughout history, the middle class has been a driver of social change, a government change of demands for new services, for better performing services. And a key part of what we've been looking at in terms of the continued growth of Asia, particularly the emerging middle class, has been around women and increasingly the role that women are going to play, do play already in society, but will increasingly play in society. The diversity of culture in the next billion middle class, and the in particular, the technologically enabled voice that it gives the emerging middle class is seen as a major part of driving change and driving growth. Now, with that as a bit of background, I think we have to look at what has been happening in terms of COVID and perhaps some of the hits or changes that we have to anticipate to that trajectory that we saw a few years ago of the velocity markets around the world. The expectation that was very exciting for these particularly these 12 markets that I noted was really a tipping point of the middle class, truly becoming a middle class where you would see, according to projections, a majority of consumers actually moving into middle class states, the traditional definition of middle class, and sustaining ultimately some economic growth that has weight of being the majority of people. Now, what has happened in the past year has in fact been a step back that a lot of people couldn't have foreseen a year, year and a half ago. The concern of course is that we know the impact has been enormous in many countries around the world, taking trillions of dollars out of the expected GDP, but in particular there's been a hit of course to what we call developing Asia and South Asia absorbing some important hits to the economies, in particular because so much of the economy, the GDP and the employment of the Southeast Asian and South Asia region is related to the informal sector, which has been particularly hard hit in the downturn. I won't go through this chart in detail, but obviously growth in Asia varies by where in Asia you're talking about, but certainly we have seen that those countries that are particularly dependent upon travel and also on the local informal economy have been taking pretty big hits and the question will be that recovery as part of an emerging middle class story. Unfortunately what we've seen is that amazing run of the decrease of poverty is at risk of reversing and the Gates Foundation along with others have been publishing data about that reversal and in particular again I'll call out women as one of the areas where one of the sectors most hard hit by this. The concern of course with the new poverty or the reemergence of poverty is the hit that women will take compared to men, a slightly higher proportion and also women of an age range of 25 to 34 who are meant to be in their in their prime who would potentially not go forward and become participants in that emerging middle class, but in fact they would slip back into poverty. When we looked at the future of growth a couple years ago and the next billion middle class, the emerging middle class, women really were the biggest factor that we saw at the time and they still are just such an important part of the economic story and the social change of the future, but the reality is that women during COVID have definitely borne some of the pain of the economic slowdown and one would argue maybe an in proportionate amount of that pain. Part of what has been driving economic growth has been the improving numbers over the past several decades of female education, particularly higher education which has been leading to more and more senior women in the workplace in some markets women beginning to outstrip or continuing to further outstrip men in terms of even things like graduate degrees. Of course this is not even by all markets in the region, but women are an ultimate force in the change of the economy due to education as one of the baselines. What we unfortunately see as one of the dangers right now is that young girls are in fact at the most risk of not returning to school as some of the markets have had difficulty with schooling. Some people have opted out of schooling. There is a chance that we could see a reversal in some of these important gains. Also we have seen throughout the last several years an incredible growth of female entrepreneurialism, entrepreneurialism, globally 58% of women employed work in some form of informal economy and that has been particularly hard hit in the start of COVID, but we also see that women form an important basis of use of things like entrepreneurialism and other social media for social selling that really acts as a catalyst for other areas of growth particularly as women are seen as often putting money back into the family through education for the family. So question going forward will be around women and their role as they've been particularly hard hit with employment during COVID. This is one of the one of the concerns of course as we look at the loss of unemployment in Southeast Asia that women have indexed even higher than men and in fact have been taking on more and more unpaid care that soaks up important time where women previously were adding to the economy. So we continue to see as we look to the future the importance of women as an economic force and as a social force but with some caveats about where in fact the trajectory of employment and unemployment will take them. One thing to call out which is a very sad fact is that globally 70% of health workers and first responders are women but the pay gap that has been an issue for many years and discussed many places now is even worse in the health sector than it is on average according to the UN. So particularly at a time when women are primary caregivers in the health sector those kind of gaps have to be addressed. So we continue to look to the future with women as vocal proponents of change in middle class societies and we're going to have to see as I said whether there is some fundamental change that happens as a result of the COVID impact on employment and where people are needing to spend their time. Now another major factor we've seen of the velocity of growth in many Asian countries in the past several decades has been around urbanization of course. Urbanization particularly the mega city growth where projections looking out over the next several years are for an increase in some of the world's biggest cities that very much track to the velocity 12 markets that I noted at the start. Major centers that continue to creep even before COVID under infrastructure problems to keep up that now we'll have to deal with a number of different factors if COVID continues excuse me to wear on and requiring real change in the way cities are responding. It's important to note though that the story of velocity is not just the story of the mega city it's really the story of what we call urban or really the growth of new growth areas that often satellite or fill in between other large urban centers. The greater Delhi area being a great example of that growth that's been seen over decades. Throughout Asia the second and third tier cities have in fact been the area of greatest economic velocity places such as Hat Yai or cities such as Da Nang which is doubled are great examples of second and third tier cities that are real economic engines and they're not just engines through the growth of population from rural areas into the second tier areas but they're growth engines because so many businesses continue to look at expanding their footprint into these new growth areas they continue to be new venues for entertainment outside of primary urban locations housing and digital connectivity. So we certainly see that the impact of COVID on urban centers has been huge in terms of physical lockdown the hit it's taking to real estate the hit it's taking to entertainment. I think as we looked at the future there are some big questions to ask about reverse migration the move to access not just mobility within cities the greening of cities what they call tactical urbanism a move really to to do micro developments in urban areas particularly as people are more restricted to their neighborhoods a rethinking of course of workspaces which i think people have already talked about the shift of entertainment and really the relationship of where people are going to want to spend their time particularly as more people do decide to work from different locations other than the office. Technology has been the third area of greatest social drive in terms of velocity. I think this is of course the area where many of us now are looking to as really one of the huge areas of acceleration. All the stats that we're seeing continues to point the way for a continuation of more and more connectivity an extension of digital deeper into people's lives particularly through mobility and 5g coming on and of course the growth we've seen of commerce and the rotation to more logistics more commerce and more things that will continue whether it's food aggregators or new and emerging platforms that will continue to really accelerate this growth of course due to covid but it was already an enormous growth prior to covid. I think also in general the push to innovation which we've seen not not just in commerce but in areas like manufacturing fintech product design even product configuration will continue to accelerate so while there have been a number of hits to the economy there are certainly areas of new growth that portend velocity in the future that are exciting. So some of that impact of covid on digitalization has been the shift to commerce and logistics more direct to consumer more growth of digital payments and fintech connectivity growth and I can't stress enough content and video really as a way for the future along with the growth of influencers. When we look at the velocity consumer demands from consumers we see that as was covered I think in one of the prior presentations there has been an ongoing rotation back to more interest and support for buying locally whether that's through local ingredients or local products that are increasingly taking on international brands. We have seen of course a growth in a number of markets of brands that rely upon either local ingredient or local heritage and we see brands that have continued to dial in to some of the biggest growth themes around the velocity consumer one of those being an understanding of the increasing importance of the Muslim consumer and the growing block that they represent for the economy and the need frankly for many brands that do not have a halal compliant product lineup or one that really speaks to the Muslim population to be able to configure their products to talk to these markets and really satisfy these markets. We also see that consumers before COVID and after COVID are going to continue to make demands upon brands. We have seen in the past year a number of areas where through social change through economic degradation there have been major pushes for companies to go green to support local initiatives to play a role to play an active role not not just give it lip service but truly be game changers and make serious commitments to change and you know one could be concerned that perhaps given the focus on health that there'd be a rotation or away from some of these issues. I don't think that's going to be the case prior to COVID a lot of the research we did around the importance of social issues for these emerging middle class consumers was already in part around safety and health but it does have a stronger base around the environment economic conditions, worker health and safety, access to education that that will continue. So I think brands are not off the hook when it comes to the demands that consumers will make. I think equally we see that you know leaders corporate leaders recognize the importance of purpose and in fact that purpose even during COVID times is essential for the consumers but also to motivate really all those all the stakeholders the shareholders the stockholders government etc. So while certainly there's been an economic impact particularly on the purchase habits and the basket habits of many consumers some of those demands in fact many of them continue to be very resonant and will be important for brands to continue to look at. So I think if we try to summarize it it's important despite COVID to take a progressive view of where the market will ultimately continue to go. We don't know as I said whether you know the economic bounce back will you know happen as quickly as we want not everyone not every market will be China in its and its bounce back but we do think it's important to continue to maintain a progressive view that has focus and foresight and that will mean a number of things in terms of some of the velocity drivers that I've noted already the continued importance of stakeholder outreach programs not just communications but really continuing to do the things that are important for companies to show their commitment to the social change the ecological change that is important and will continue to be important before and after COVID. As I've noted female consumer programs and female employed programs wellness programs the importance of local area marketing particularly in second and third-tier cities but increasingly also of course in the in the urban areas particularly those that continue to have some change due to lockdown that will be important recognizing different groups within the consumers that continue to have issues that they or opportunities of being underserved in the way brands speak to them and also frankly just in areas such as entertainment the eSport growth virtual entertainment and then lastly looking at the market portfolios the emerging middle class middle class consumers the mid market you know there are people coming in and out of that where some of the categories we have certainly seen that a number of consumers are having to rebasket their priorities so looking at entry products in the mid market will be increasingly important if COVID drags on more and more geo targeting the use of related to what I said about local area marketing using technology intelligently connected commerce partnerships with the biggest platforms that seem to grow day by day in size and importance along with content partnerships social media management because the consumer is not going to go away in terms of being commentators on brands also the influencers that are important to the ecosystem that we all built today of discussion around brands and then things like government relations which although governments have been hard pressed many by what's happening with COVID they are important stakeholders in the future so these are some of the pieces ultimately I'm optimistic that we will get through COVID the COVID whatever trajectory it takes will not stop the positive velocity of where Asia has been going it certainly means some modifications and it will probably mean a number of sustained changes as people's lifestyles no doubt have some alteration but I'm still very much a believer that a lot of what we've seen in the these velocity drivers will continue to make progress and be important to all of us as we look at how to develop our marketing in the future with that it's back to you thank you Balana thank you so much Ken for joining us and giving us your valuable time well with this I'd also like to urge our attendees who are watching our slides to type in the questions in the Q&A tab if you have a Kurt would you be available for the next few minutes for a couple of questions from the audience absolutely happy to perfect so I just request the audience to please use the Q&A tab and post your questions if any also to the ones who are watching us live on Facebook please write it in the comments section with all your questions so Kurt firstly we do have one again we have one of the questions from the audience they ask that as co-CEO of the leading creative agencies what do you think are the biggest challenges thrown at creative minds by COVID-19 look the wonderful thing about creative minds is that they're always active so we've certainly seen and I've been very proud of all of our creatives in looking at new solutions when times are difficult during COVID looking to understand how people are changing looking at new ways to talk to them looking at as the prior speaker had talked about sort of resonating with them one of the challenges of course has been how do you make the things you want to make there have been some challenges but I think you know agency creatives have been quite inventive and working with people in production to find ways even with restrictions to still develop and create the kind of material that humans want to watch and resonate with I think the other important thing of course is that creatives are often always the best creatives look to find something to break through and you know there has been a bit of me to repetition around COVID messaging from a number of companies and I think you know creatives tend to be fairly irreverent in heart which makes them wonderful and there are also ones then not to necessarily fall into cliches and I think you know there is a fatigue of messaging that has set in around some of the COVID messaging that you know the consumer doesn't want to endlessly look in a mirror of depression around COVID they know times are tough but they also still want to smile they still want to laugh they still want to hear new things they still want to be inspired so I think being honest barometers of the fact that the consumers will resonate with many things still despite the fact that there is an overwhelming atmosphere created by COVID is important to keeping people in balance. Sure thank you so much again there's one more question which is coming is that just right now will brands be open to experiment and opt in new ways with creativity in 2021 or building place space what's your view on that? Well there's something wonderful about the market and its competition so brands you know I can't say what brands in general do there'll be plenty that will play it safe there will be many that want to try to stick to something tried and true but that will not stop some brands from going in and disrupting those brands or trying something new it will come down to each brand in terms of how how they see their future and what messages will resonate but I can guarantee you that we will not have a market where everyone just sits on their laurels they're always competitors out there ready to push the envelope and challenge brands for a share so I think what's going to drive it even during tough times marketing is about taking share it's about building a market but it's about taking competitive share so I think that you know brands will be at some risk if they don't continue to question every day every week every year what they're doing whether it still resonates with the market and whether their competitors are stealing a march on them. Sure Ken does one question which is common is that what is that one campaign that you were to guilty did during the pandemic that you would like to talk about a campaign that made you proud as a team what was that Ken? Oh look there's so much work that we're proud of it it is always hard to single out one as being worthier than another I think a lot of the generosity work that was done for Cadbury in India has been a wonderful example of pivoting and reminding people the humanness that you still have to touch again I don't think that messaging in tough times has to be about doom and gloom I think it's about staying thankful for what you have and the people you have around you so that would be certainly some of the Cadbury work that's been done over the past year I think has been stellar in its thinking and its intent and its execution but there's been work in many markets that you know that would be deserving but that would be my probably my most top of mind answer that a lot of the audience might be familiar with. Absolutely Ken there's one more question which is common is that how can digital minds evolve I know it's a very generic question but one of our attendees is asking that how can the digital minds evolve what does one have to prepare themselves for that one like you know you've been talking about evolution of digital minds so what's your take and could you guide our audience today? Well look the thing that I have done over 20 years of being involved in digital marketing every time I've spoken at a conference except for today I've asked the question in five years time do you think there will be more digital or less in 20 years I have not had a single person raise their hand and say you know what I think it's going to be less I think people are going to get tired of all this stuff so it's a bit like having tomorrow's newspaper today you can be well assured that the time people spend investing in understanding digital marketing the skills around it understanding data knowing the platforms is essentially a sure bet and I use those words very selectively you know back 20 years ago when the original sort of even longer when the original sort of stock market crash happened around the dot-coms people were looking simply at the wrong thing it has been a month on month year on year growth of digital use digital penetration for 30 straight years so I think it starts with making the commitment that this is this is the mainstay of marketing and that everything you need to do to be literate is worth your time where you go from there in terms of spending time depends upon the line of business that you're in but as I said you've got to be familiar with everything around data around the platforms around where technology is going and the wonderful thing in this world is if you don't know it search it you know most of the platforms if you're not familiar with them they've got a lot of training online even that they can be done so I don't think there's an excuse for people in our industry not to be familiar with what is happening in digital because it's really all on display if people are willing to spend the time thank you so much Ken for giving us your valuable time we really are excited that you could join us at the forum conclave once again a big thank you from outside thank you for having me it's been a pleasure thank you