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kh's agency search

Korean Ad Agencies on Sale!

Korean Ad Agencies on Sale!

Korea is the world 10th biggest advertising market and has global #1 advertiser, Samsung. As Korean economy has achieved amazing fast growth for 60 years after Korean War, Korean advertising industry has become $9.4 Billion size market. 2002 was the best year for Korean economy, especially for media companies and ad agencies when Korea-Japan Worldcup was successfully held. But for a decade after 2002, Korean ad market has stayed flat or grown a little. And many Korean ad agencies on sale now!

 

(source : Cheil Communications)

(1 USD = 1,063 Korean Won/ 2013 figure is estimated)

Background/ What is the characteristics of Korean Ad Agency or Market

-Chaebols and their in-house agencies lead the market

 Korean major Chaebols have their own in-house agency and they are representing more than 50% of Korean advertising market. Cheil Communications (Samsung), Innocean Worldwide (Hyundai Motor), HS Ad (LG), Daehong Communications (Lotte), Hancom (Hanhwa), Oricom (Doosan), SK Planet (SK) are the major in-house ad agencies and key players in the market.

-Global big names expand

WPP, Ommnicom, Publicis, IPG, Dentsu. All global giants are expanding their business in the market. TBWA Korea is leading agency among global ad agencies followed by Dentsu Korea, JWT Korea, BBDO Korea, Leo Burnett, DDB etc. In the media side Group M, Carat, Starcom and Dentsu Media are very active in business but have limited influence in the market. In digital area locals are more powerful than global names. Comas Interactive, Dartz Communications, PostVisual, 9 Fruits, Chai Communications, DTribe are the major and WPP acquired Post Visual last year. Global names such as Tribal, Proximity are all underdogs at the moment.

-Government Guide

 Korean government did the major role in the making of Korean ad industry in 1982 when the government made KOBACO which had overall control power in broadcasting advertising sales as sole agent. Since then KOBACO had been the center of Korean ad industry. All related policies and informations, researches, studies, trainings and public campaigns are happened with KOBACO support.

-Total service agencies

Different from western countries, Korean ad agencies are mostly total solution providers, media, creative, digital, BTL, etc. under one roof. They are normally working with outside specialized agencies in digital or BTL. For example, Cheil has digital partners pool for co-op.

Who & Why (on Sale)

Many agencies on sale. Some Caebols are trying to sell their in-house agencies. And some independent agency owner(s) has same idea. Why?

-Government’s pushing fair trade policy to Chaebol companies. Chaebols normally give all advertising business to their in-house agencies. But as Korean government pushes  Chaebols for fair trade and mutual living with ‘small to mid size companies’ they should allocate some portion of advertising budget for open competition.

- No more attractiveness in ad agency business

Digital changed the whole marketing landscape. Marketing budget has not spread out through the same route. More competition, less profit for agency. And always changing is really hard job.

-For cash-out and retire for founders

Some agency founders are in their 70’s and 60’s. It’s easily understood. For other founders and owners want partial selling for money and partnership or network resources.

-Who are they?

Contact me khhan60@gmail.com  

 

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