Behind Cheil Worldwide’s investment in iris

Yesterday news broke globally that Korean creative agency Cheil Worldwide, also largely known for being Samsung's in-house marketing arm, would be investing in iris Worldwide, with the eventual goal of a 100% acquisition in the next five years.

Industry players are lauding the complementary nature of the deal. While Cheil is traditionally known more for classically ATL work, iris has a strong foothold in retail marketing, offering an integrated offering.

But several industry watchers say that the deal is likely driven by Samsung’s goals to globalise its creative account.

Greg Paull, principal consultant at R3, said that the brand was the driving force behind the deal as the company looks to take on global markets.

In the past few years Samsung has ramped up its global marketing star power. In a bid to break into the global markets such as the US and UK, it has over the years hired several high profile global marketers such as Todd Pendleton. Pendleton, who currently serves as chief marketing officer of Samsung Telecommunications Americas,  joined Samsung with over 17 years of brand marketing and communications experience. His role prior to Samsung was global brand communications director of Nike.

Just in March this year, P&G’s Vince Hudson was also hired by Samsung to lead brand strategy in the US. Meanwhile last year, Samsung Electronics UK also brought on board former Unilever marketer Russell Taylor to head up the new role of vice-president of corporate marketing.

Clearly, a global presence is at the top of the Korean tech giant’s mind as competition in both mobile and the consumer electronics arenas heightens.

Hence, pushing to partner up with an agency such as Iris with a strong grip over Western markets should come as no surprise, said Paull.

“Cheil has a strong hold over Asia and iris has a strong presence in Europe. Together, the partnership would be unique and complementary as there does not seem to be a big client conflict overlap," said Paull.

One question raised ove r the partnership is the clash of cultures. But this shouldn’t prove a problem, opined Paull.

“While cultural differences could exist, Cheil has changed its operating structure over the last five years to become more multinational and global,” he said. In markets that the Korean agency has acquired smaller shops, it has kept the existing structures in place, said Paull.

Meanwhile Sandeep Khanna, current APAC MD of Brand Learning and former vice president of corporate marketing APAC at LG Electronics, added that the obvious advantage would be the extension of both the agencies globally and breaking into new markets.

“Cheil will also be seen as a serious player in its own right, breaking out of the perceptual baggage of being seen as an in-house agency which might still persist in some geographies. The partnership would certainly benefit large clients who will now be able to get serviced under a common umbrella,” said Khanna.

Khanna added that any merger or acquisition is a time where there can be some employee tension. However what both agencies need to be mindful of is that this can be proactively handled by investing in capability building programs around new ways of working and strengthening the employee value proposition.