LG Electronics Puts $350 Million in Play

Five Agencies Will Vie for Brand and Strategic-Marketing Business

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NEW YORK (Adage.com) -- A plum global account is in play: LG Electronics' $350 million brand and strategic-marketing communications business.
LG Electronics' four core businesses are mobile communications, digital display, digital media and digital appliances.
LG Electronics' four core businesses are mobile communications, digital display, digital media and digital appliances.

The marketer will hear presentations in Seoul, South Korea, early next month and a decision is expected by October, the company said. The review follows the appointment of a new head of global branding at LG, and covers worldwide communications, strategy, creative work and corporate branding for LG Electronics and its individual product companies.

The shortlist
The company has a shortlist of five agencies or agency teams from two global holding companies for the pitch. From Omnicom Group there are two: DDB Worldwide and a team made up of Agency.com working with TBWA. From Publicis Groupe, Saatchi & Saatchi Worldwide and Publicis Worldwide are participating. The fifth contender is London-based Bartle Bogle Hegarty, owned 49% by Publicis. The agencies have little or no previous LG business, indicating a desire by the company to take a fresh look at advertising.

There could be more than one winner. DDB and Bartle Bogle are pitching only for the mobile-communications business that is one of LG's four divisions (DDB handles electronics giant Philips); the other three agencies are pitching for the LG umbrella brand business and all four divisions.

LG Electronics' four core businesses are mobile communications, digital display (flat-panel TVs and monitors), digital media (computers and peripherals, audio equipment and video players) and digital appliances (air conditioners, washing machines and refrigerators, including a model equipped with TV and internet access).

Emphasis on branding
Though the business is healthy -- in July 2007 LG reported its highest quarterly profit in three years, $420 million for the second quarter -- LG Electronics' new vice chairman and CEO, Yong Nam, has a strong interest in branding. He took over in January 2007 after serving as head of strategic business for LG Corp., and spent seven years in management positions in the U.S. earlier in his 30-year career at the marketer.

The review is being led by Sung-Hun Han, LG Electronics' Seoul-based global head of brand marketing. Mr. Han is a former Procter & Gamble executive who has been at LG Electronics for about two years and headed marketing for South Korea before taking on a more global role early this year.

"We are delighted to have such a strong field of agencies involved in this competition," Mr. Han said. "Based on our initial briefings and engagement, we look forward to strong thinking as well as inspired creative work from all the agencies."

In August, LG conducted a separate four-agency review and awarded a global project for LG Electronics' digital-display business, called the Digital Display Co., to the Agency.com and TBWA team, led by Agency.com's chairman-CEO, Chan Suh.

No incumbents on pitch
The review does not include several incumbents on LG accounts, such as WPP Group's Y&R and Havas' Euro RSCG Worldwide. It is also unclear what role, if any, LG's former house agency, LG Ad, will play. LG Ad is partly owned by WPP, and used to be LG's main agency in south Korea. LG Electronics had no comment on incumbent agencies.

The company said media is not included in the review. Most media assignments have been made locally.
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