Hyundai's Dedicated Shop, Innocean, Lands First Non-Auto Client in the U.S.

Move Comes Amid Adland Debate Over Agency 'Team' Model

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Since opening its doors stateside three years ago, Innocean, the Korean shop that handles advertising for Hyundai, has grown from 18 staffers to more than 250. It's expanded beyond its Huntington Beach, Calif. headquarters to open five more offices in Chicago, Detroit, Dallas, New York and Hawaii. And now, it has landed its first client outside of the auto sector.

The shop has been hired by the performance-wear maker for golf, FootJoy, to launch a repositioning campaign that includes TV, digital and social-media duties. It will break early next year. FootJoy's director of brand marketing, Rob Kelley, said in a statement that the agency "demonstrated a deep understanding of the game, our business and the ability to capture the consumer's attention through fully integrated campaigns across all channels, just a few of the factors that led to their selection in this review process."

In terms of spending, it's hardly a big client. But by nabbing a client outside of Hyundai, Innocean is demonstrating an effort to modify the single-client structure its operated under domestically since 2009.

Hyundai CMO Steve Shannon
Hyundai CMO Steve Shannon

That push to grow beyond its founding -- and very large -- client comes at a time when there's been much debate in adland over the potential for such dedicated agencies to be successful, especially given the lack of diverse creative opportunities afforded to talent that works there.

The largest holding company in the world, WPP, has poured immense resources into setting up agency teams, the most recent being Red Fuse for Colgate. All told, WPP has half a dozen of these now, and it's had mixed success. The biggest success story the industry can point to when it comes to these dedicated-agency structures is WPP's Team Detroit, which expanded beyond its founding client Ford to diversify its client base, as Innocean is now attempting to do. WPP's largest failure in this regard was Enfatico, which talked about wanting to grow beyond founding client Dell but quickly folded.

Steve Shannon, VP-marketing at Hyundai Motor America, told Ad Age in an email that he's eager to see Innocean add clients beyond his company.

"Creativity is the lifeblood of an agency, and the opportunity to work on a different business, in a different category, with a different target consumer group, allows them to stretch their thinking, grow their capabilities, learn new tools and challenge their creative teams."

Mr. Shannon is hoping the agency will be able to attract not just any accounts, but business in specific sectors that he feels are complementary to the auto space.

"Two areas of particular interest to me would be the luxury-goods sector as well as the millennial target audience," he said. "Hyundai's Genesis and Equus luxury sedans both compete effectively in the luxury-car space, so it is very important for us to keep current and understand how this particular 'modern premium' consumer audience ticks." He added that "to keep millennials interested in our brand, it is all about staying in constant touch with popular culture and technology, and communicating with them in an honest, authentic dialog. So ultimately, we hope that Innocean adds clients that complement these two target areas."

According to the Ad Age Datacenter, Hyundai ranks as the 69th-largest national marketer. In the U.S. alone it spent nearly $560 million last year on advertising.

In April of last year, Ad Age took a close look at Innocean's model. Even then, the shop bristled at the association with being an "in-house" shop. Innocean's Korean management had made clear that it was not only important to them to set up a full-service agency that offers creative, media planning and buying and promotions capabilities for Hyundai, but it also wanted to prove its chops beyond the auto sector. If it can, it would mimic the model of Innocean's headquarters in Seoul, where more than half of the revenue comes from business outside of Hyundai or Kia.

Asked whether the single-client model is problematic from a creative perspective, Innocean USA Chief Creative Officer Greg Braun answered, "A creative department can be inspired by a diverse creative diet."

Still, we probably won't see Innocean quickly scale by adding accounts in a number of different sectors; it has not appointed a head of new business and new accounts will be pursued by a collective of staff. Said Mr. Braun: "Hyundai is a best-in-class brand and FootJoy is a best in class brand. We're definitely not doing the thing where we're perusing anything that comes along or just anyone that 's interested in the agency."

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