Advertising agency Lowe India has lost the Rs 150-crore LG Electronics creative account to Rediffusion DYR. The shift comes on the back of LG's recent global advertising review in December 2007 when UK-based Bartle Bogle Hegarty (BBH) bagged the global creative account and Young & Rubicam (Y&R) secured the global LG network account in up to 20 markets, after an international pitch conducted in LG's headquarters Korea as well as US.
Hyundai's in-house agency Inocean was handling LG's mobile phone business, which will also move to Rediffusion. LG India is currently transitioning the account from Lowe India to Rediffusion. For Lowe, the South Korean consumer durable company was one of its biggest clients in its Delhi office.
Confirming the development, V Ramachandran, director for sales & marketing at LG India said, "The change in creative agencies is currently work in progress. The entire transitioning process should take place before March 2008." LG, which has been an aggressive advertiser, is the leader in its category as well as one of the top 10 spenders in the country. Mr Ramachandran added, "In 2007, we billed about Rs 150 crore, and in 2008, we are looking at increasing it further in excess of Rs 200 crore." He added that the above-the-line and below-the-line (BTL) proposition, which was in the ratio of 50:50 in last year, will be upped to 65:35, hence increasing media spends in 2008. "We will also be investing in cricket as we have been for a few years now based on our brand portfolio requirements." Thegrowth engines for LG India this year would be its flat panel displays (LCD and plasma), GSM and laptops. Mahesh Chauhan, president, Rediffusion DYR, said, " At a fundamental level, the brand LG is redefining itself and its scale of operations. The business also gives a huge impetus to our Delhi operations after Airtel. It's also a tribute to the resurgent Y&R Network worldwide." Mr Chauhan added, " The new alignment signals a new perspective. We will focus on pushing the brand up the value chain and re-positioning it as a premium product in terms imagery and perception." Talking about the loss, chairman & national creative director R Balakrishnan said, "Yes, we understand that the LG business has been globally aligned to BBH & Y&R. In no other country does Lowe handle the LG business except in India. In globally aligned businesses, one seldom retains business when one is handling it only in one country. We would definitely miss LG because we worked really well with each other."
However, the remuneration structure for the agency is still unclear. Mr Chauhan added, "It is still being discussed at the global level hence there is no intimation on whether it would be a commission-based or a fee-based model."
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