LG ELECTRONICS CONDUCTS MARKET-BY-MARKET REVIEW

BrandBuzz Currently Handles the $50 Million U.S. Account

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NEW YORK (AdAge.com) – Technology giant LG Electronics is conducting a global market-by-market advertising review that throws its $50 million U.S. account into play.


LG Electronics USA is reviewing all advertising for its mobile phones, consumer electronics, digital appliances, and information and technology business in North America, spokesman John Taylor said. Spending in the U.S. is $50 million, according to TNS Media Intelligence.

'Not a reflection of BrandBuzz'
WPP Group's BrandBuzz, which currently creates advertising for each of the company's U.S. units, is defending. "BrandBuzz is our agency of record," Mr. Taylor said. "It is not a reflection of BrandBuzz's capabilities." Calls to BrandBuzz were not returned at press time.

The account is currently the agency's largest. A loss would be a blow for both the agency and its parent, which has tried to cultivate its relationship with LG Electronics and build it into a global client relationship. WPP bought a 49% of LG Ad, the company's in-house agency, with an agreement that LG's business would stay at the shop for three years until the end of 2006. Now LG will have to fight to keep that business in Korea. A small portion of it already moved in January when LG appointed TBWA Worldwide in Seoul, South Korea, to handle creative and promotion business in that country for two brands—X-Canvas high-definition TV sets and Flatron computer monitors.

The review "is part of a worldwide effort and an ongoing activity at LG to review each of its agency relationships," Mr. Taylor said. He would not comment on timing nor contenders for the process, though an executive familiar with the process said a decision is likely by late June.

Committee will review
Joon Jun, senior VP-corporate marketing, for LG Electronics, North America, is overseeing the review. A committee of executives will review agency finalists and recommend a decision. Michael Ahn, CEO of LG Electronics, North America, will make the final selection. LG is based in Seoul, South Korea, and has its U.S. headquarters in Englewood Cliffs, N.J.

LG consolidated its business at BrandBuzz in March 2005. Prior to that, the North American business was divided among multiple WPP Group agencies, including Marsteller Advertising, Ogilvy & Mather and JWT. BrandBuzz began working with the marketer in 2001 on projects for its appliances and cellphones.

LG is second in Korea only to Samsung and is a giant, family-owned conglomerate that produces products ranging from surface-launched defense missiles to financial services to escalators and toothpaste. It began in 1958 as GoldStar and became known in Asia as Lucky GoldStar. The company shortened its name to LG in 1995 to broaden its appeal worldwide.

Matthew Creamer and Laurel Wentz contributed to this report.

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