For global advertising companies, IT powerhouse Korea is the perfect market to learn about and develop digital and mobile marketing businesses.

Ninety-six-year-old Grey Group, the major clients of which include Procter & Gamble, GlaxoSmithKline, British American Tobacco and Pfizer, is one of those companies that sees Korea as its hub for mobile business. It plans to acquire a local advertising or digital marketing firm within this year.

“We are looking for a company that provides full digital services to clients in Korea and can share the same culture and vision with us,” Nirvik Singh, chief executive of Grey Group Asia Pacific, said in an interview with The Korea Herald.

“With its high broadband penetration, Korea has become the center of mobile marketing and is therefore a very important market for WPP (Grey’s parent company) and Grey. The communications industry is changing and it’s no longer just traditional television and print. We need to offer new skills to our clients.”

Singh, who visits each of the markets in the Asia-Pacific region at least twice a year, was in Seoul this time to meet with prospective M&A candidates.

Aiming to double its revenue in Korea and the Asia-Pacific over the next three years, Grey, a member of the London-based global advertising and public relations conglomerate WWP, also seeks to work with Korean exporters planning to advertise abroad.

Regarding the dominance of chaebol’s in-house agencies in Korea, Singh said he didn’t expect it to grow further, especially when the market was becoming more international.

“The Korean government has said it doesn’t want this trend to go forward. The more in-house agencies you have, you’re sending a signal to the international community that you don’t want foreign investors to come,” he said.

“An in-house agency is like an advertising division of a global company. Global clients don’t expect an in-house agency of another company to provide the world’s best customer relations management, creativity or digital marketing solutions.”

Singh sees high growth potential in the mobile business as only about 1 billion of the 5 billion mobile phone users in the world currently use smartphones.

“As more people migrate to smartphones, the larger the presence of commerce on mobile and more brand choices made through mobile phones (there are),” Singh said.

“Consumers behave very differently when shopping on desktops, laptops, tablets and phones. Shopping on smartphones is common now in Singapore, Japan and Australia.”

There has been huge growth in mobile penetration in India, but mobile shopping isn’t big there yet as far fewer people have credit cards.

While rapid technological changes appear to be reshaping the communications industry, Singh believes communication is still more about the “big brand ideas.”

“Technology allows you to deliver that brand idea differently ― through Facebook, Google or Twitter,” said the 22-year industry veteran.

Grey provides creative insight not just on advertising, but also on how to do business for its clients.

In Australia, where much of retail has moved to the online space, Singh advised one of its clients, a retailer, to charge people for trying on clothes as most customers chose to buy clothing online.

“We found that because of the strong Australian dollar which is now nearly equal to the U.S. dollar, people just try on clothes at the shops and order them online. So we suggested charging 12 to 18 dollars for trying on a product, and it worked,” he said.

“People still came to pay for trying on clothes because it was better than buying clothes of the wrong sizes online. This sort of shows how retail is going to change.”

As it concentrates on understanding consumer behavior, Grey’s strategy in Korea is to produce work that helps create business for its clients.

For instance, for the household odor remover brand Febreze of P&G, Grey found that the biggest problem for housewives in Korea was the smell of samgyeopsal and developed a campaign highlighting the effect of Febreze on the smell. As a result, local Febreze sales went up 90 percent.

Singh sees much room for growth in Asia, especially in the emerging markets where more people are moving up the socioeconomic stratum and entering the middle class.

“What we call the per capita consumption of advertising is $91 globally, $6 in India and $28 in China,” he said.

“Unlike in developed economies, as more people become better off in these new growing markets, we will see growth in advertising demand as more people will buy televisions and read newspapers.”

Currently, China accounts for about 20 percent of Grey’s revenue in the Asia-Pacific region, followed by Japan, Malaysia, Australia, India and Singapore.

By Kim So-hyun (sophie@heraldcorp.com)