Interpublic Group of Cos.' Foote, Cone & Belding and Initiative Media are currently Samsung's global agencies, and Interpublic is participating in the review along with its three rivals: WPP Group, Publicis Groupe and Omnicom Group, according to executives familiar with the situation.
No formal request for proposals has been issued yet, but Samsung has already visited several of the holding companies in the first step of a two-part process. The second stage will involve the individual operating companies selected to pitch.
budget likely to grow
With Samsung's growing profitability and Olympic Games sponsorship, the company's $400 million global budget is likely to grow.
Reviews managed at the holding company level are becoming more common. HSBC, for instance, is in the middle of an estimated $500 million global review that has the three biggest holding companies-Omnicom, Interpublic and WPP-pitching to HSBC execs in 12 cities. This is still such a new way of assigning a global account that Peter Stringham, the HSBC chief marketing officer in charge of the review, has said that a single holding company consolidation may turn out to be impossible, for conflict and other reasons. None of the holding companies would comment.
Although review plans are still at an early stage, Samsung is believed to be most interested in seeing creative, media and marketing services like Customer Relationship Marketing. Cheil Communications, Korea's largest ad agency network and Samsung's own in-house agency, plays a key role in managing Samsung's marketing communications and strategy globally and will continue to do so. Until recently, Cheil's main U.S. presence was a Cheil Communications America office in New Jersey that supported Samsung's U.S. operations. But about six months ago Cheil opened a small Manhattan office to help with Samsung's global brand marketing.
Holding company chiefs are now picking their way through Samsung's needs and their own conflict situations to piece together their teams. Take WPP, for example. Within that holding company, Ogilvy & Mather Worldwide handles Motorola mobile phones, and Young & Rubicam is a Sony Corp. agency.
The likeliest contender to pitch for the creative portion is WPP's much smaller fourth network Red Cell, serving as a global creative resource and working with J. Walter Thompson, which already has some minor Samsung assignments in Asia. Red Cell and JWT are currently paired in WPP's pitch for HSBC. On the media side, MindShare is ready to go after Samsung, although the third media network WPP is putting together is also an option. For direct and customer relationship marketing, WPP will probably pick either Wunderman or OgilvyOne, after counting possible conflicts.
The key decision-maker in Samsung's review is Eric Kim, the company's exec VP-global marketing since 1999. Samsung had no comment.
"It could happen very quickly, or it could drag on for the rest of the year," said an agency executive involved in planning his company's Samsung pitch.
contributing: claire atkinson and lisa sanders