Suppose you were given $100 million to make acquisitions. What would you buy in today’s market? Buz Sawyer is about to find out.
Cheil, South Korea’s largest ad agency and a Samsung Group affiliate, has just hired the former Wieden + Kennedy exec to create a presence for Cheil, which remains little known despite being in the U.S. for more than 20 years. The Cheil North American chief executive is looking for an agency to provide the company a profile and client base beyond Korean marketers like Samsung. Cheil has previously lost out on efforts to acquire successful independent shops like mcgarrybowen, New York, which went to Dentsu in 2008.
Now Sawyer is wasting little time as he begins his search for other agencies. In his first week on the job, Sawyer talked to Adweek about his plans for Cheil in the U.S.
Adweek: What are your initial priorities at Cheil?
Buz Sawyer: Right now I’m in assessment mode. The mandate is to build/rebuild Cheil’s operations in North America. There’s a lot of different components right now, with some of them doing some interesting work. But there isn’t a lot of focus to those component parts. There’s an entity called the One Agency, with people in Dallas (near Samsung’s U.S. headquarters) and several teams in New York, and we need to bring them under common leadership and a common vision. As is typical with a lot of Asian agencies, right now Cheil has really only one client, Samsung, and part of the plan is to develop an agency resource that can work beyond a single client. So that’s one priority and it may include the hiring of additional talent. I’m still assessing where we need to do that. Right now I have my eye on a person to run all of One Agency. I can’t go into details about that person, because we’re negotiating with him, but I’m very excited about it. It’s a guy with very strong strategic chops, which I think we really need. Once he’s in, then we’ll evaluate the current group and figure out what else we need to do.
Is it true you have $100 million to spend on acquisitions?
That is correct. This is why I like this job: It’s a huge shift for this organization, and I give the management in Seoul a great deal of credit for realizing they need to take a different approach to the North American marketplace and bring in local management and focus. That’s something they’re going to be doing around the world, not just in the U.S. Cheil realizes that to stay competitive you’ve got to have strong local knowledge. They’re really committed behind it and the money is there.
Tell us about your acquisition strategy.
We’re looking at how else can we expand (beyond adding staff), and that’s primarily through acquisition. Cheil acquired The Barbarian Group [in December 2009] and that’s been an interesting acquisition. But now the focus is on finding the centerpiece for the new Cheil in North America, which needs to be a highly strategically focused, creatively motivated group. We’re looking at a lot of different things; my predecessors started that process, and I’m re-gearing it up. There’s a typical list of agencies everyone defaults to—and we all know who they are—but I want to dig beyond that. My commitment to the company has been one of quality this year and that might come at the expense of quantity. I think it’s crucial that whatever we do here, it has to have the ability to last. I’ve not been promised a 500-person agency or even a 100-person agency. Who knows—it may be a 35-person agency that just has great potential. I’m going to spend a lot of time in the next several months digging into that here in New York, on the West Coast or, frankly, anywhere in the U.S., which is exciting.
What are you looking for in an agency acquisition? Do you want it to have a strong digital orientation?
I firmly believe you have to start with a group of people who really understand strategy, and then strategy must be connected to big ideas. To a certain extent—in using old terminology—it would be a general agency, but I would only be interested in a general agency that also has the ability to operate in all of the various mediums out there. It would be more "new school" than "old school," generally speaking. There’s a lot of cool folks out there that want to do nifty things and be really cool, but I’m also looking for people who have a solid business understanding.
Does the One Agency work with Cheil’s other U.S. holdings like digital shop The Barbarian Group and Beattie McGuinness Bungay, the London agency that’s opened in New York?
Right now the Barbarians are a stand-alone operation. There’s quite a bit of integration going on between One [Agency] and The Barbarian Group, but Barbarian is set up separately under [CEO] Ben [Palmer]. There’s no working relationship with BMB [Beattie McGuinness Bungay] at this point. At one time, Cheil had a fairly robust advertising practice in the United States and then it got a lot smaller. A couple of years ago, a decision was made to take the pieces that were left and put them underneath this title of the One Agency, which is a Cheil brand name that exists in the United Kingdom and now Europe. There are a lot of pieces left over from Cheil and now the trick is to actually turn them into something with a true focus and direction.
Traditionally, Asian agencies have had a tough time in America. What challenges do you face in breaking into such a competitive marketplace?
[Japanese agency] Dentsu is several years ahead of Cheil. They’ve been through many iterations in the U.S., and around the world, and now they seem to be on to something. I think a lot of that has to do with being more locally focused in management, which is what Cheil wants to do. A lot of these companies had an export mentality and, let’s face it, that’s what JWT did when it was called J. Walter Thompson and expanding internationally. But they realized you need local management, local knowledge. Wieden realized it very early on as we set up their Amsterdam office. We shipped a bunch of Americans over there, and within a year, we realized it wasn’t going to work. So then we started hiring a lot more Europeans. Cheil could have gotten to that point faster, but they’re there now, with a commitment to change. Is the Dentsu model an interesting one? You bet. I’m watching what they’re doing very closely.