Those watching the Olympics this summer are unlikely to overlook the high-profile marketing efforts of Korean electronics giant Samsung Electronics. Meanwhile, the marcomms industry will be watching a contest of a different sort, as holding companies battle to win Samsung Electronics' US$400m global advertising, media and PR account.
What is becoming increasingly clear is that Samsung affiliate Cheil Communications is central to both these events. The Seoul-based agency is handling Samsung's sports marketing in Athens - and will be working closely with whichever of the big guns wins the Samsung pitch.
Established in 1973, Cheil (the word is a prefix meaning 'the best' or 'the most') is today the top player in Korea - the world's seventh largest ad market - and over twice the size of its nearest rival.
It has supported its flagship client, Samsung Electronics, in highly successful sports marketing intitiatives; in 2003, it was ranked by Advertising Age as the world's 18th largest agency in revenue terms. It is a heavy hitter financially: a listed company since 1998, it had, according to its audited annual report, billing revenues of US$358 million in 2003, with ordinary profits of US$52 million. Now it is gazing beyond Korean shores.
"Cheil has defined our direction for change and competitiveness as globalisation of the company," says a source in the company's global planning department.
"We have established ourselves as the best partner for Korean enterprises in global markets, and we plan to secure local clients in overseas markets in three to four years."
Cheil boasts 22 regional offices around the world; in 2003 it established a global strategy center in New York tasked with giving the firm 'international oversight' - "it is basically a think-tank", according to the company source. Cheil also works in tandem with Samsung's current global AOR FCB, and has partnerships with Edelman and Carlson Marketing Group. In Korea, Cheil has handled local market work for multinationals such as Dunkin Donut and GM-Daewoo. But as the 800-pound gorilla of the Korean ad market, Cheil does not lack critics.
"Cheil's postion is similar to Dentsu's in Japan," says a local market watcher. "They have this big, solid, client base in Samsung Electronics, lots of volume - so you could say they lack the creative edge: with a relationship like that, you don't want to do anything too cutting-edge, too risky. Also, they aren't too international."
Cheil's most glaring weakness may be its excessive reliance upon Samsung.
Apart from KT&G (previously, Korea Tobacco and Ginseng) and the Korea National Tourism Corporation, its international client roster is virtually all Samsung affiliates - Samsung Electronics, Samsung SDI, Samsung Electro-Mechanics, Shilla Hotel, Samsung Technwin. This reliance is reflected on the board, with only two outside directors hailing from beyond the Cheil/Samsung fold.
How will the company expand beyond this? "Our first priority, internationally, is representing Korean clients abroad," admits the company source. Cheil is currently bidding competitively in India for Hyundai Motor - a client that, if it wins, should prove that Cheil can move beyond Samsung Group to other major Korean firms.
The Samsung pitch, meanwhile, elicits little official comment from the company. "Cheil will be playing the agency of record role for Samsung global brand communications, performing a brand steward role on behalf of Samsung," says a company spokesperson. (Nobody from the company agreed to be quoted for this article). "The global agency will align with and support Cheil in accomplishing Samsung's goal."
How such a sensitive relationship will work in practice is hazy. "It depends on which agency wins the bid, and that is a Samsung, not a Cheil decision," continues the source. "But basically, Cheil will be cooperatively involved in all disciplines - strategy, creative, media."
However, Cheil's track record with FCB is patchy, while some sources claim BBDO pulled out of the global pitch because of concerns over Cheil's role. And an industry watcher suggests that the current pitch for Samsung may result in one of the big international holding companies buying a stake - or control of - Cheil.
The critical question facing Cheil must now be whether it can break beyond its narrow client roster and secure international accounts in the global marketplace. Observers may think the odds are stacked against Cheil - but as Korean firms have proved time and again, that is not necessarily a safe bet.