ASIA: New AD Venture for WPP in Korea

WPP is now a major player in Korea after buying a majority share in AD Venture, but the promotion is too late to help the group win Unilever’s media account.

Media communications company WPP Group is now a major player in Korea following its acquisition of an 80 per cent stake of the country’s tenth-largest agency, AD Venture Worldwide (billings &£50m).

AD Venture was a joint venture between three large Korean advertisers: Maeil Dairy, Hite Beer, and Aekyung Industrial. The three advertisers will retain a minority shareholding in the agency and agree to leave their business with it for several years, during which time WPP will gradually buy the remaining 20 per cent of the agency.

Rather than merging AD Venture with one or other of its three Korean agencies – J Walter Thompson (JWT), Ogilvy & Mather (O&M), and Dentsu Young & Rubicam – WPP will run it as an independently managed agency within the group. The deal will help WPP catch up with rival Omnicom, which has bought three Korean agencies in the past few years, making it the largest foreign agency group in South Korea.

Though AD Venture adds to WPP’s presence in Korea, the deal comes too late to make an impact on Unilever Korea, which has shifted its 12bn won (&£6.5m) media account from its agency of record McCann Erickson to Cordiant’s Diamond Advertising. The decision, which takes effect from April, follows pitches by McCann and Unilever’s two other globally aligned agencies in Korea – O&M and JWT.

Unilever Korea marketing director Fumio Kuroyanagi says: “Diamond is the third-largest agency in Korea and consequently has more buying power than our regular agencies. We found that this would enable us to have a greater flexibility in our media planning.”

Diamond joined the Unilever club when sister agency, Diamond Bates, was appointed to handle creative for Pond’s skin care products last November, replacing O&M. In a campaign by Diamond Bates, a popular Korean singer appears wearing the heavy make-up of the Peking Opera. Only when she removes it using Ponds face cream do people recognise her. “It is early days, but initial results from this campaign are very promising,” says Kuroyanagi.

When asked whether Unilever was disenchanted with O&M, Kuroyanagi said: “No, not at all, its work for Dove is very good and is an important contribution to the brand’s growing success.”

Kuroyanagi also emphasised that Diamond Bates’ appointment on Ponds would not lead to any change in the brand’s concept or positioning.

Diamond Bates is, nominally at least, one of Procter & Gamble’s aligned agencies, though this is not an issue here as it does not handle assignments in Korea.

A natural development following the acquisition of AD Venture would be a formal launch of MindShare in Korea. AD Venture’s buying power, allied with the planning skills of WPP’s other agencies, could make MindShare a powerful competitor in Korea. But this step does not seem likely for some time, at least not until AD Venture’s management and clients have become comfortable with its new owners.

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