[ Investment > Interview ]

   Prior to the buy-in, WPP was well represented in Korea by Ogilvy and Detsu plus Young & Rubicam, among other interests. What was the particular attraction of LG Ad?

   LG Ad is far bigger in the Korean market than any international agency. I am not privy to the thinking of top WPP management, but clearly the purchase of LG Ad would give any international marketing services group a strong foothold in this market. But that¡¯s not all. LG Ad¡¯s own growth since 1962 has been consistent as well as meteoric. LG Ad ¡¯s participative management can provide very useful guidance in a market that has often been difficult for international companies to understand. Many of the most successful international operations in Korea have been the result of well-chosen partnerships where the interests of both parties coincide. I truly believe LG Ad¡¯s purchase by WPP ¡ª or more broadly WPP¡¯s partnership with LG ¡ª is one that will be taken by investing companies in the future as a model for success.

   What synergies are expected as a result of the buy-in? That is, what can LG Ad and WPP do for each other?

   Working on the coalface, this kind of decision is not mine to make. However, it seems clear that there exist a number of opportunities for LG Ad within the WPP group and vice versa. WPP¡¯s portfolio of marketing service agencies is the largest and broadest in the world. At the same time, LG Ad is a full-service agency ¡ª the second largest in Korea ¡ª offering a comprehensive range of services to clients in Korea and worldwide. Within the Korean market, LG Ad stands alone in its ability to offer a truly integrated market approach. By buying into LG Ad, WPP can provide a solid platform from which it can launch many services from the WPP portfolio on behalf of Korea¡¯s leading advertisers.
  Certainly, I believe, and everyone in LG Ad agrees that this has been a win-win decision. LG Ad was already building a network of agencies throughout the world ¡ª we have six offices outside of Korea ¡ª to service our largest domestic clients. We now can offer any of our Korean clients immediate access to a truly seamless global service, without the need for further investment. That¡¯s a great advantage over our competition. At the same time, we are able to benchmark global best practices. Our new COO, Eliot Kang has come directly to us from New York where he was founder of Kang & Lee Advertising, and we are working increasingly closely with our new partners, Ogilvy & Mather and Young & Rubicam. A perhaps surprising fillip has come as LG Ad employees themselves have understood that the quality and range of services we offer here do not differ so far from best practices in London or New York! That¡¯s a great boost to morale.

   How does WPP rate the creativity of LG Ad? What are some of its most distinguished campaigns?

  Just this year, for example, LG Ad won Nike¡¯s most prestigious award for innovation and cost effectiveness, the E=MC² Award. This was the result of a hugely successful integrated marketing campaign during the World Cup. We are immensely proud of this, not least as LG Ad¡¯s focus has always been on the effectiveness of the advertising that we produce rather than on unleashed ¡°creativity.¡± Having said this, one increasingly sees Korean ads take creative awards on the world stage. LG Ad, as one of the leading agencies here, naturally takes a big slice of these creative awards, including the New York Film Festival, CLIO and London International Advertising Awards. Many of our clients are non-LG and we are pleased to serve a cross section of the world¡¯s most prestigious brands. I¡¯m sure the longevity of some of these relationships along with the prestige of the clients will not have escaped the notice of WPP. Clearly such discerning advertisers would not stay with us for such a long time without reason! LG Ad is proud of the creative service we offer.

   How attractive is the Korean market?

  Advertising agencies have long had their regional bases in Southeast Asia. I am sure that the winners of the future will be those who see this for the anachronism that it is. The Korean advertising industry is the 11th largest in the world ¡ª so that alone justifies the need to have a healthy presence here. Beyond that, many predict Northeast Asia will not only become the growth engine of the world economy, but also a major trading zone in its own right. For advertisers, this means an increasingly affluent ¡ª and increasingly homogenous ¡ª demographic bloc. More specifically, the Korean market has already proven to be a useful test market for products and services in Northeast Asia. Having a grass-roots, well grounded presence here is sure to offer a great advantage to clients seeking to steal a march on their competitors without risking the whole shop!

by Charles Duerden(cad@kotra.or.kr)