Hemingway’s famous saying, "Never mistake motion for action" applies well to Cheil’s growth story this year. 

Business was ripe—23% revenue growth Q1 to Q3 was recorded, marking a year-to-date surge of nearly 64%. Operating profit margin soared in strong double digits; digital tech division stretched 30%. All impressive numbers.

Bets in metaverse propelled innovation forward. Purchase of EVR Studio, a leading virtual content production company represented Cheil’s largest investment in Korea and opened pathways in visual effects, gaming and metaverse entertainment sphere for clients. Naturally, these efforts made for more effective creative output are reflected in its work and recognised by the growing award tally. Alliance in blockchain with Ground X and partnership with an artist group to develop NFT-based IP are all impressive moves to show promise in innovative thinking. However, Cheil’s focus in the metaverse might have conceded impressive results in 2022 but is deemed risky and does not guarantee future growth.

Performance targets were met in 2022, but in an otherwise economically tumultuous environment, amiss were well-defined management, DEI and sustainability KPIs. Once again, Cheil’s actions are not aligned with the company’s “humans are our best asset” vision. Without people, in the long-term, motions in business are nothing but time sinks. 

Category 2022 2021 Business B- C+ Innovation B- C+ DEI and sustainability C- D+ Creativity and effectiveness B B- Management C- C- *2021 scores adjusted to new numeric scale. Read about the grading methodology

Business (B-)

Cheil conveys a comfortable business story.  23% revenue growth was recorded till the end of Q3, that's a year-to-date surge of nearly 64%, with operating profit margin up 31%. 

Digital businesses launched under the digital tech division in 2021, consolidating marketing tech functions like digital experience planning, UX, and software design, thrived in 2022 with 30% Q1 to Q3 growth making digital revenue exceed over 52% of total revenue, a first for the agency. 

The South Korean-based global agency’s digital marketing business exceeded 52% of its full-year revenue driven by performance marketing. The consolidated digital tech division, launched in 2021, thrived with a 30% Q1 to Q3 growth rate. 

The agency claims that all its Asia-Pacific markets, including Korea, Greater China, Southeast Asia and Southwest Asia, contributed to this double-digit growth. Yet, its top ten new business wins all came from Korea with PRND (Hey Dealer), Kolon Industries, Ihateflyingbugs (Mildang English) and KBank among integrated marketing clients with top billings. SK Innovation, Samyang Naturals, Zigbang also made the new business cut. Global accounts like P&G Korea, Amazon (Thailand) and L'Oréal (Vietnam) were added for select services.

Overall, Samsung Electronics single-handedly asserts a hefty weight in the Samsung-owned agency’s earnings, followed by KT and Korea Ginseng Corporation. Given that billings to Samsung are almost 90 times the second biggest client, weakness forecasted for the tech sector in 2023, coupled with Samsung’s own profit plunge (69%), does not guarantee smooth sailings for Cheil and its ongoing bid to diversify from reliance on its parent. 

Innovation (B-)

The metaverse was ubiquitous in 2022. While Cheil’s Meta-formation pivot to feed its innovation machinery may be second-guessed now, it came with clear benefits. They poured KRW 17 billion ($13.35 million) in investments in EVR Studio, a leading Korean-based virtual content production company, for an undisclosed stake.

This deal represented Cheil’s largest investment in Korea, granting direct access to EVR’s proprietary technologies (used by major game developers) for tapping into metaverse-oriented content, such as creating virtual spaces, interactive content and AI-powered influencers, for its clients. It further strengthened its digital capabilities by signing MOUs with NFT-based IPs and allied with blockchain company Ground X. 

Cheil crafted a slick solution for Samsung with these sophisticated capabilities at the opening of the tech show CES 2022. More than 4 million visitors who paid a visit to Samsung’s virtual showcase could decorate their own homes with Samsung’s latest and customizable home solutions. Another effective and immersive experience for Galaxy S22 users with avatars and role-playing elements had 2 million visitors; average dwell time increased by 44%. The agency also distributed and managed NFT artworks for Chevrolet’s SUV Tahoe, but Campaign is not privy to its KPIs or ROI. 

With two out of three examples of innovative impact tailored for Samsung, once again, we’re wondering if the metaverse ambition is Cheil’s way of keeping up with the industry’s digital evolution or a means to service its biggest client a little better. Nonetheless, for expanding innovative business opportunities and diversifying tech collaborations, we give a B-. 

DEI & Sustainability (C-)

While innovation is not a concern, the agency has been repeatedly chastised for its appalling DEI figures. Unlike previous years, it is refreshing to see complete transparency in its gender split statistics. It's a shame we can't publish data here, but allow us to reveal that gender-split at staff level is nearly equal. However, that at leadership level is terribly low. The agency has not undertaken any gender or ethnicity pay gap survey or one for employee engagement; there’s little to suggest that 2023 will differ. 

With DEI provisions as primitive as 15 days of paternity leave, on-site daycare facilities for both parents, not just mothers, we wonder if Cheil’s rapid advancement in innovation is applied only to technology and not its talent.  

Cheil’s ESG management system set up in 2021 is helping them achieve a 2% annual reduction in energy usage. Last year, they signed an agreement with 96 partner companies to create eco-friendly content production conditions. Perhaps, a leadership call would have helped highlight the tangible results of this partnership.

Small and medium businesses with public certification for outstanding ESG practices get preferential treatment as vendors and contractors with Cheil— encouraging business partners to upgrade their climate-friendly policies is notable. We appreciate the agency for that. 

For its sustainability efforts, Cheil scored an "A" in 2022 ESG Ratings announced by the Korea Institute of Corporate Governance and Sustainability (KCGS). DEI is still in nascent stages, a lot of work needs to be done, but the transparency in numbers is refreshing and for that, we are raising the score one notch. The shop needs a turnaround from its past practices to put people and the planet at the forefront of its equation for long-term success. 

Creativity & Effectiveness (B)

The agency’s award tally is long, involving a slew of high-level names such as Cannes (4), LIA (4), Clios (16), Spikes Asia (10), D&AD (2), Effies (2), NY FAA (4), adding sparkle to its trophy cabinet. 

Quest for Dyslexia created for Samsung China, is as effective as it is brilliant. The concept is simple: roughly 15 million children are struggling with learning disabilities in China, less than 5% get diagnosed because of societal pressures and the stigma attached. The campaign aims to bridge that gap with early diagnosis. Machine learning tracks the players’ consistent misreading of common quests and creates a pattern to identify red flags.

Parents are then alerted to test their children. The campaign resulted in over a million tests conducted within one month, and over 25,000 were diagnosed. Naturally, the campaign has swiped several nominations and metals; for us, the campaign is a clear case of (effectiveness) squaring the (creativity) circle without becoming bland. 

“Bespoke Original Series” for Samsung is an ambitious one echoing the needs of millennials and Gen Zs working from home. It attracted more than 20 million online views. The effort with India-based EETech to create a hospital bed from non-biodegradable Covid wastes, such as face masks and PPE, is innovative and eco-friendly, though far from self-sustaining or impactful. 

Management (C-)

In a welcome change from previous years, the agency is candid about its 'people' statistics. Though we are not at a liberty to publish specifics, staff exists is in modest single-digits, attrition rate is healthy and below industry standards, average staff tenure is the same as last year (6.6 years). 

Top hires were males: In December, Jonghyun Kim got promoted to president and CEO, replacing Jeongkeun Yoo, who stays as chairman, Ian Millner became chief executive of Cheil Connec+ on top of retaining his chair of Iris Worldwide position, Kaushik Datta of Leo Burnett made ECD of Cheil India. Yet again, no effort there to fix the shoddy gender balance split at the leadership level.

Fair evaluation and compensation plans are in place, but details do not entail any attempt towards tackling gender gaps. The company allows for flexible working hours within a set framework; hardly an incentive in the post-pandemic world. The agency also talks of upskilling programs, but none are impressive. For a company that claims “humans are the best asset,” it does little to walk the talk. 

Digital (52%) Below-the-line (30%) Above-the-line (18%) Performance marketing Creativity backed by data Digital experience  Amorepacific Dongsuh Foods GM Korea Hankook Tire & Technology Korea Ginseng Corporation KT Samsung Electronics Shinhan Financial Group Volkswagen China Yili The agency declined to self-grade.