The Cordiant group this week set its sights on Hyundai business
across the world after taking over the home market agency of the South
Korean industrial giant.
Diamond Advertising, whose acquisition was exclusively forecast by
Campaign last month, will form the hub of a new network intended to
fulfil the group’s desperate need for a major globally aligned
client.
Working alongside the Cordiant-owned Bates network, the Diamond
operation will expand to meet Hyundai’s requirements in a number of
undisclosed markets.
The new arrangement will not affect Hyundai’s current relationship with
Bates USA, which handles the company’s pounds 68 million car business in the US, or with George Patterson Bates, which runs Hyundai in
Australia.
But it will result in Atlas, the unit set up by Bates in the UK to
handle a pounds 13 million pan-European campaign for Hyundai, being
rebranded as Diamond.
Atlas was established to avoid conflict with Bates’ pounds 100 million
pan-European SEAT business.
Cordiant will pay up to pounds 82 million over the next two years for an
80 per cent stake in Diamond, South Korea’s third-largest agency. It was
set up by Hyundai in 1983 and the company will retain a 20 per cent
share of the agency, which handles 80 per cent of its domestic
business.
Cordiant, which has had a relationship with Diamond for the past three
years, was able to take advantage of the battered state of the South
Korean economy.
Now Cordiant bosses are hoping that the acquisition will be the catalyst
for a global alignment with Hyundai.
The company, whose portfolio includes not only the Hyundai and Kia car
brands but electronics, construction and engineering interests,
organises its agency arrangements on a country-by-country basis.
’There’s a lot to go for,’ Michael Bungey, Cordiant’s chief executive,
said.
Bates has struggled to find sufficient global business to bind its
network together since its almost catastrophic dumping by Mars five
years ago.
British American Tobacco and Warner Lambert currently provide the global
glue but more is needed.
Cordiant acknowledges that the Korean ad market was hit hard by the
South East Asia recession but says it is recovering strongly and will be
boosted further by the 2002 Word Cup, to be hosted jointly by Korea and
Japan and for which Hyundai is a major sponsor.
