Cheil steps up expansion plan

The deal is the first time Cheil, which is active in 29 markets, has taken a minority position of this nature. A spokesperson for Cheil said the move was part of its strategy to raise its international profile and establish itself as a “true global network”.

Cheil has traditionally based its operations on the servicing of one brand - Samsung - as the electronics company’s in-house advertising facility, and continues to suffer from a weak creative reputation outside of Korea.

“Cheil has no choice but to move in this direction, or continue to be perceived as Samsung’s agency middlemen,” said Steve Yi, strategic planning director at Grey Korea.

While the partnership with BMB will not initially lead to any new client relationships for Cheil, the spokesperson noted that it would significantly raise the level of strategic and creative capabilities within the network, and fuel ambitious plans by Cheil’s global chief operating officer Bruce Haines to serve a range of clients in Asia, the US and Europe.

In turn, BMB, which is reportedly seeking to develop an international micro-network, would benefit from Cheil’s broad global presence, said the spokesperson.

The agencies’ brands will not be affected by the deal, and both will continue to operate as separate entities while sharing resources. BMB’s clients include Carling and Diageo.

That contrasts with recent moves by Japanese giant Dentsu, which dropped the iconic CDP (Collett Dickenson Pearce) brand from its agency in London to rename it Dentsu London, also in an apparent effort to become a stronger player in the UK.

Cheil appears to be taking a different approach to international expansion than its Japanese counterpart in several areas. Although an industry source in Korea noted that the agency lacks awareness outside of its domestic market, over half of Cheil’s revenue is already generated from overseas.

The source added that the appointment of former Leo Burnett London chief executive Haines earlier this year reflected a commitment to understanding international markets, rather than following the centralised Dentsu model, which allows for little autonomy outside of Japan.

“Cheil can succeed outside of Korea,” the source said, though he pointed out that Haines would require the management’s “full support and wallet”.