The World: The deal that could open up Korea's ad market.(O&M merges its Korean operations with Diamond Advertising Ltd.)

O&M's merger of its Korean operations with Diamond Ad may unlock the door for foreign agencies, Mark Johnson reports.

When it comes to foreign investment, Korea's ad market has historically been very isolated. The tide may, however, be about to turn, with the announcement two weeks ago that Ogilvy & Mather is to merge its Korean operations with Diamond Ad, Hyundai's former in-house advertising agency.

O&M, OgilvyOne, Ogilvy PR and a new start-up, Ogilvy Healthworld, are merging all back-office functions with Diamond Ad to form Diamond Ogilvy Group.

The deal has been described by Miles Young, the chairman of O&M Asia-Pacific, as 'not a colonisation, but a fusion'; a description that highlights the delicate touch required in South Korea. Young enthuses about a market in recovery with promising opportunities in emerging media.

'The convergence of digital and mobile media in Korea represents the most attractive and exciting market opportunity, far more advanced than either the US or Japan,' he says.

But observers will be watching closely to see if such close co-operation produces a powerful partnership capable of tapping into this growing discipline.

They will also be watching closely for a number of other reasons. Since the 90s, there have been few international advertising groups willing to brave the waters of an economy in recession and a market dominated by powerhouse corporations - chaebols - such as Samsung and LG, that own their own in-house agencies.