afaqs!

LG Electronics moves a chunk of its creative business to LG Ad

By Nandana Das and Anushree Bhattacharyya , afaqs!, New Delhi | In Advertising | May 30, 2011
LG has moved its entire home entertainment (HE) range, which includes all audio-visual products and televisions. It had already shifted the air conditioner and water-purifier accounts in the last one year.

First it was the air-conditioner business in July 2010, followed by the water purifier business in December. And now, it is the home entertainment (HE) range -- which includes all audio-visual products and televisions - that has moved to LG Ad, the in-house creative agency of LG Electronics. LG Ad, a part of GIIR Advertising Media Communications, was established in 1964 as an in-house advertising agency for the LG Group of Korea. LG Corporation holds 35 per cent shares of GIIR. Ogilvy and Young & Rubicam, two of the world's leading advertising agencies, (companies of WPP, one of the world's largest communication groups) acquired a 36 per cent stake in LG Ad in 2002.

Since last year the Korean electronic major has been shifting its advertising duties to its in house agency at regular intervals, since the agency's launch in July 2010. The in-house agency also handles the below the line (BTL) and out of home (OOH) duties for several LG brands as and when required.

While in India, LG Ad, is currently only working on LG brands, in Korea, the agency handles the creative mandate for other companies like Korean Air, and Daehan Investment & Trust, amongst others.

The development has been confirmed by L K Gupta, chief marketing officer, LG India, who, says, "We wanted to get the best creative solution for our brands, that was provided by LG Ad. Also the shift of the businesses is part of our global strategy, as globally including Korea, LG Ad handles the creative mandate of LG."

Rediffusion was called to present ideas only for the air-conditioner brand, and not the other two products. Even for the microwave and washing machine, LG Electronics has called the two roster agencies -- Rediffusion-Y&R and LG Ad, to present their creative strategy. A decision on the same can be expected soon. Rediffusion-Y&R is currently handling three businesses of the brand -- refrigerator, corporate and LG Mobile, besides microwave and washing machine.

The electronic major has an overall marketing spend of about Rs 770 crore, of which Rs 420 crore is being spent on ATL, and Rs 350 on below the line (BTL) advertising. The overall size of the account won by LG Ad that only includes above the line (ATL) spends is estimated to be worth between Rs 200-250 crore.

Dipansu Saha, creative head, LG Ad says, "LG wanted something new and innovative out of the agency. It is a gain for us."

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