Asian ad agencies establish beachhead in Los Angeles area.

Asian ad agencies establish beachhead in Los Angeles area

A Korean-owned advertising agency called Tiger 5 is scheduled to produce Asian-language ads for Pacific Bell this year, one of a number of small but significant signs that Asian ad agencies are making inroads in the Los Angeles business community.

Tiger 5, a Hollywood-based agency owned by former Korean TV newsman Tae Heung Kang, is part of a small but growing Asian ad industry that is developing to serve the burgeoning Asian business community here.

The Mid-Wilshire-based agency Muse Cordero Chen is scheduled to produce ads in seven Asian languages for the U.S. Bureau of the Census this year, a sign that Los Angeles is not the only place where the Asian ad connection is being felt.

And Japanese-owned agencies, which are among the largest in the world, are beginning to make their presence felt in the L.A. ad industry.

According to Holmes Stoner, partner in a Hollywood firm called Artesa that sells advertising space on behalf of Asian newspapers, more than 25 ad agencies in Los Angeles are now either owned by Asians or oriented toward the Asian market. Many of these have sprung up in recent years, Stoner says, to produce ads for the burgeoning number of Asian businesses.

Until this recent growth in the number of Asian agencies, neither the small Korean and Chinese agencies nor the large Japanese agencies have ever been much of a force in Los Angeles advertising.

Jim Helin, president of the Western States Advertising Agencies Association, says very few Asian ad agencies are members of the group. One of the association's goals this year is to attract more Asian agencies as members as part of a general program to attract more minorities to the ad industry.

Many of the small Asian agencies have been established in recent years primarily to produce ads for the dozens of Chinese, Japanese, Korean, Vietnamese and other Oriental newspapers that have sprung up as Asian immigrants have poured into Los Angeles.

Kang, for example, says his clients include restaurants, clothing and drug stores, food markets and a host of other small businesses. (He founded his agency in 1985, calling it Tiger 5, he explains, because his first name prompted people to call him "Tiger" and because Americans like the "High Five" sign.)

The Asian-owned ad agencies have a long way to go before they match their American counterparts in terms of U.S. billings. And the tiny shops that produce ads for small business probably never will.

But the big Japanese agencies in particular have deep pockets, and some have established footholds that could eventually lead to a substantial presence.

Among the Japanese ad agency giants beginning to make themselves felt in L.A. is the West Los Angeles office of Dentsu Corporation of America, a U.S. subsidiary of Japan's Dentsu, the world's largest ad agency with more than $6 billion in annual billings.

Even after winning several new accounts, the Dentsu Los Angeles office still has only $3 million in annual billings, hardly significant compared with the hundreds of millions in annual billings handled by the American-owned ad agencies here.

But Dentsu is here to stay, says Chuck May, senior vice president and general manager of the L.A. office, who points out that Dentsu is very patient and determined to grow in this market. He says the agency, which now serves three Japanese clients, hopes soon to announce its first U.S.-based client.

Another Japanese agency with a growing Los Angeles presence is Hakuhodo Advertising America Inc., the U.S. arm of Japan's Hakuhodo, ninth-largest ad agency in the world with more than $3 billion in annual billings.

Taka Arai, vice president and associate general manager at Hakuhodo's Mid-Wilshire office, points out that Japanese ad agencies have lagged behind Japanese manufacturers in terms of growth in the United States.

The manufacturers began marketing their products here about 30 years ago, Arai says, but the Japanese ad firms didn't really begin to establish operations here until about 15 years ago.

As a result, many of the biggest and most lucrative Japanese ad accounts -- like Toyota, Nissan and other auto manufacturers -- went to American ad agencies.

But agencies like Hakuhodo have grown by courting other Japanese companies that want to market their products to Americans. All 15 of Hakuhodo's clients are Japanese companies, says Arai, who says Hakuhodo now has nearly $20 million in annual billings and a staff of 50 at its Los Angeles office.

Arai says Hakuhodo's Japanese ownership has given it an "in" with Japanese companies, bringing in a steady stream of business from Japanese clients.

Says Brian Ribbey, a vice president at Hakuhodo, "We have not, up to this point, actually pursued American companies." Hakuhado had had its hands full with Japanese companies, but in the next few years, Ribbey says, "It's in our plan" to look for American companies as clients.

Arai points out that only three of the agency's employees were born in Japan, meaning that almost all of the firm's employees are Americans. "The name is Japanese, but it's pretty much an American company here in the United States," he says.

May of the Dentsu agency also is quick to call his firm an "American" agency. "We are an American agency owned by a Japanese company, just as DFS Dorland is an American agency owned by a British company, Saatchi & Saatchi and J. Walter Thompson is an American agency owned by the British," he says.

Whether an agency is "Asian" depends on how "Asian agency" is defined.

Some agencies, especially smaller ones, are owned by Korean and Chinese immigrants whose clients primarily are small shops and restaurants that advertise in Asian-language papers. They produce advertising in their native languages, aimed as Asian consumers.

Another group of agencies, like Hakuhodo and Dentsu, produces ads in English for both Japanese and American companies that market to U.S. consumers. They may be owned entirely by Asian concerns, but their ads are usually aimed at English-speaking American audiences.

Yet another group consists of joint venture agencies like HDM Worldwide, which is a partnership between Dentsu, an American agency and a French agency. HDM in Los Angeles has more than $100 million in billings from a cosmopolitan list of clients.

According to David Chen, most of the small Asian agencies "do business for Chinese language newspapers or Korean language newspapers."

"A very low percentage of their business comes from major advertisers," he says. "Most of them are small-scale agencies."

Chen says many of the small agencies have been established in the last five years as the Asian immigrant communities in Los Angeles have grown. According to May, the growth of the small Asian ad shops has been more gradual than dramatic, but he says many people now have a heightened awareness of the small Asian firms because of publicity about the growth of other Asian businesses here.

A number of agencies, like Chen's, work both for clients that want to reach Asian consumers and those that want to reach U.S. consumers. Much of Muse Cordero Chen's work is in English, for example, but its ads for the U.S. Bureau of the Census will be produced in Chinese, Korean, Cambodian, Japanese, Vietnamese, Thai and Tagalog (a language of the Philippines).

The ads will appear on television and radio, in newspapers and on billboards, Chen says, to encourage Asians -- who are generally under-counted in the census -- to fill out their census forms.