Samsung's $400 million ad challenge

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Executives from Samsung Group headquarters in Seoul, Korea, met with several ad shops in New York last week, including incumbent AG Worldwide, as they hunted for an agency of record to launch an estimated $400 million global image campaign.

Samsung's challenge is to find an agency capable of handling a global campaign but with a client roster that doesn't pose a conflict problem.

WPP Group's Conquest and sibling media shop MindShare, as well as FCB Worldwide, are vying for the AOR assignment, according to executives close to the review. It could not be determined at press time whether those shops had met with the electronics marketer's representatives last week.

THE FAT LADY SINGS

According to an insider at Samsung, AG is expected to be dropped from the global agency of record review. "We are still in the review," insisted Peter Arnell, AG's chairman. "It ain't over until the fat lady sings."

AG is partnering with Interpublic Group sibling shops, including Initiative Media, in the battle for the account.

However, according to the Samung insider, the marketer has been disappointed with AG's fashion-heavy branding efforts, which feature b&w images of runway models embracing technology -- everything from computer monitors to microwave ovens.

"Let's put it this way," said the insider, "six years ago we had a small share [of the U.S. electronics market], and six years later, we still have the same share. Samsung has not excelled in that time period."

EXPANDING AD SPENDING

Although Samsung spent $50.3 million in measured media in 1999 and for the first six months of 2000, according to Competitive Media Reporting, the company is expected to dramatically increase its ad spending next year in order to extend the brand globally. The marketer plans to challenge more-established electronics companies in North America, including Sony Electronics, Matsushita Electric Corp. of America's Panasonic brand and Sharp Electronics. The review is expected to be decided by the end of September, and a campaign will roll out by early 2001.

Agencies have been tiptoeing around a minefield of client conflicts in order to get into the review. BBDO Worldwide, New York, had discussions with the marketer, according to an executive close to the review, but the agency declined to participate because of conflicts with clients Pioneer Electronics and Sony, which it handles in some European markets.

Ogilvy & Mather Worldwide also was in the mix, according to another executive close to the review. But conflicts between client IBM Corp. and Samsung's computer products and between Motorola, which Ogilvy is currently pitching, and Samsung's telecommunications division have forced WPP to shift the pitch over to Conquest. Based in Milan, Italy, Conquest has a reputation for being WPP's "conflict agency," thrust into reviews in which other WPP shops cannot venture.

CLIENT CONFLICTS

Meanwhile, FCB has Compaq Computer Corp., another client that may have competitive issues with Samsung's computer products.

"Everyone has got a conflict," Mr. Arnell said. "I know they are saying they don't, but they do. People are on the phone making a lot of excuses to their clients because they want to see if Samsung is really talking about the numbers they are talking about."

AG has been pitching the business not as a solo shop but as part of a "configuration based upon the IPG network," Mr. Arnell added, who claimed his arrangement is conflict-free.

`THE UNDERDOG'

"We are the underdog in all of this," he said. "We are the global non-global. After six years, it's a tough thing to get a call saying they are no longer going to do territory-by-territory and they want to create one unified whatever. Thank God we have IPG. That is a powerful partner."

In the meantime, AG continues to work on Samsung Electronics' account, which the incumbent might retain, according to the insider.

The electronics unit, based in Ridgefield Park, N.J., where Samsung North America is headquartered, will launch a fourth-quarter campaign, estimated at $25 million, in mid-October. Spots were being produced in Los Angeles last weekend.

The fall effort will extend Samsung Electronics' current tagline, "DigitALL, Everyone's invited," to specific products, including Yepp, Samsung's portable digital MP3 player, Tantus HDTV-ready TVs, wireless phones from Samsung's telecommunications group, and TFT computer monitors and displays.

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