Thai ad industry skeptical of 25% fee plan

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BANGKOK -- The Thai advertising business is reacting with some skepticism to an announcement by Vichai Suphasomboon that his new Siam Advertising Co will charge clients an agency fee of 25%. Vichai, who announced he was leaving Ammirati Puris Lintas Thailand in October, said the industry standard rate of 17.65% of the client's production cost is normally inflated by other charges. "We don't do that and will try to keep the 25% rate final," Vichai says.

Saravut Krykard, a former creative director and co- founder of Damask/ BBDO Co, says: "This rate will be hard to handle, even though Vichai will claim to provide better services. Advertising creativity is difficult to judge."

Vichien Linchongsubongkoch, president of the Advertising Association of Thailand and managing director of Chuo Senko Thailand Co., says: "Today, agency fees are a worldwide standard that has long been in use, but we should give Vichai an opportunity to prove his idea. He seems to be positioning his services in the premium grade at an expensive price. However, it all depends on the decisions and satisfaction of clients."

Vichai has said he expects Siamese Advertising to handle about 10 clients in its first year. He hopes each client will have an advertising budget of at least $400,000.

Copyright January 1997, Crain Communications Inc.

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