Will Cheil's Move Pose Threat to Burnett?

NEW YORK Just two months after Cheil Worldwide bought a 49 percent stake in Beattie McGuinness Bungay, the U.K. shop is working on Samsung and will be handling assignments for the electronics company when BMB opens an office in New York this year.Korea's largest agency now wants to create a global network beyond its identity as Samsung's in-house agency. The man tasked with that effort, new Cheil global COO Bruce Haines, has said he wants to make BMB into an international micro-network. Samsung, with $400 million in global spending, may well be the engine to drive that expansion. In 2005, Samsung appointed Leo Burnett its lead global agency after less than a year with an ill-fated holding company arrangement with WPP Group. (Burnett, like WPP, works closely with Cheil, in which Samsung holds an 18 percent stake.)There's no love lost with Burnett: U.K. native Haines quit as CEO of Burnett's U.K. operations in October 2007 over his disagreement about his company's pairing with corporate sibling Arc. Haines has identified London and New York as his top priorities, and Cheil USA has been adding to its management team in the States.Adding more wrinkles to this group of unlikely bedfellows is the fact that outsiders like Burnett and WPP companies must first sell their ideas to Cheil, with the unit effectively acting as another layer of client approval even as Cheil USA is gearing up to become a more aggressive competitor.Haines and BMB partner Trevor Beattie declined interview requests. Jennifer Friedberg, gm at Cheil USA, said: "Leo Burnett handles a lot of initiatives with our global office. It has yet to be seen how it will all break down."Added a Burnett rep: "Nothing has changed. We're still Samsung's global lead agency and we work closely with Cheil."Haines earned creative credibility as a longtime business partner of Tim Delaney's in London's Leagas Delaney. He's moved from London to Seoul and has said he wants to create Cheil micro-networks built upon acquisitions and working with "talented groups of people."This week Haines comes to the U.S. to huddle with his growing team. Last week, Cheil tapped Timothy Bruns, a former ecd at Draftfcb, as the agency's creative chief. Bruns was hired by Cheil USA's Friedberg, who joined in September. (Friedberg had earlier led the global efforts on Motorola at Draftfcb.) This week, Cheil plans to announce another Draftfcb exec is joining as head of business strategy. In January, Michael Kim, a Cheil headquarters' veteran, became president of the U.S. Doron Wesly, from Millward Brown, was also named Cheil's global media director that month.Sources working with Cheil in the U.S. describe the experience as one where the Korean outpost took outsiders' ideas and produced them at a lower cost. Bruns, who has also worked at TBWA\Chiat\Day and Avenue A/Razorfish, said his traditional and digital backgrounds underscore the changes he'll make with Cheil's core offerings.Three-year-old BMB almost sold to TBWA last fall. BMB clients include Ikea, ING Direct, Diageo and Unilever. Beattie -- who made his name with work like FCUK for French Connection and "Hello boys" for Wonderbra-pegged the worth of 100 percent of BMB at $89 million.Haines' efforts to build a wider roster of clients beyond Samsung could prove tricky, as some advertisers may harbor concerns about a partner so closely affiliated with such a large global marketer. Additionally, the cultural differences between Asian industry business practices at home and abroad have already been demonstrated by other companies like Japan's Dentsu, which has struggled to build international networks.

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Will Cheil's Move Pose Threat to Burnett?

Noreen O'Leary

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Noreen O'Leary