Samsung Wraps Up Global Review; Publicis Groupe Still On Board
Samsung has wrapped up its global review, with incumbent agencies such as Publicis Groupe's Leo Burnett and Starcom MediaVest Group's Starcom retaining their portions of the business.
The company also added independent Wieden & Kennedy to the roster, as well as Publicis' BBH, according to people familiar with the review. In all, the results give Publicis some breathing room after what could have been a major loss.
Wieden & Kennedy
According to other executives familiar with the business, the U.S. piece of business, much of which is at MDC's 72andSunny, is not affected by the review. McKinney, which is part of Samsung-owned Cheil, also works on Samsung in the U.S.
The global review process has been a complex one. The marketer held four separate pitches for the global review: a creative pitch for large agency networks, a creative pitch for boutique agencies, a media pitch and a digital pitch. For the network creative agency pitch, incumbent Leo Burnett participated, as did WPP's Grey, according to people familiar with the review; for boutique, shops like MDC's 72andSunny, which handles U.S. work, Wieden & Kennedy, BBH and Cheil participated, according to people familiar with the review. For the digital and media pitches, Interpublic pulled in digital and media resources including BPN, its smallest media agency. (Interpublic's RGA currently handles a large chunk of digital in the U.S.) It's also believed a team comprised of staffers from WPP's media agency network GroupM participated.
The review is for a three-year contract, according to the RFP, obtained by Ad Age.
The global review, according to the RFI and RFP, was to be accompanied by a series of regional pitches in eight markets, though it was not immediately clear where those pitches stood in light of the global assignments.
Nearly all corporate decisions are handed down from the Seoul headquarters, according to a marketing exec who once worked for the company. While the U.S. marketing team has had some leeway on choosing agency partners, they are kept largely in the dark about the review process, this former marketer said. "It sounds insane, but it's absolutely true," the marketer said.
In 2013, Samsung spent $3.83 billion in worldwide advertising, according to the Ad Age DataCenter. The company also reported an additional $7.38 billion in sale promotion, representing 3.5% of global revenues. (Last year, Samsung ended its practice of reporting PR spending; in 2012, the amount totaled $558.8 million.)
Despite its comfortable lead in global smartphone sales, the manufacturer has struggled to maintain its market share. Its recent preliminary earnings report predicted that operating income will fall by some 24% due to slumping mobile sales. Samsung said its marketing expenditure rose during the three months, as sales promotions increased, but it does not expect a further hike in the upcoming quarter.
--Contributing: Malika Toure, Alexandra Bruell