If there is a forbidden word around the quaint, seaside offices of ad agency Innocean's Huntington Beach, Calif., headquarters, it's "in-house."
"We don't use the term here," said COO Jim Sanfilippo, charged by Innocean and Hyundai in late 2008 with forming and staffing the agency, which today is building non-Hyundai clients abroad, and will soon begin a push for new clients in the U.S. "It's not how we feel, and it's not how we operate."
Innocean drew snarky whispers when it was announced in late 2008 it would be assigned the Hyundai business.
It had a tough act to follow in celebrated advertising agency Goodby, Silverstein & Partners, which had won the coveted auto account after a shootout against four other ad agencies in 2007.
The undertone of that whispering was negative, skeptical even, that a shop so closely tied to the client could carry out needle-moving creative work. Innocean, operating in 12 countries, is part of the Hyundai Group chaebol, a Korean conglomerate.
It is also owned by Hyundai Motors Chairman Chung Mong Koo and his daughter Chung Sung-yi.
Such an arrangement, while anathema by current corporate-governance practices in the U.S., is the cultural norm in South Korea where the biggest companies -- Hyundai, Samsung, LG -- have long been controlled by Korean clans.
But so far, Innocean's work has been pretty solid. And there is plenty of pressure to keep it that way from Hyundai America CEO John Krafcik, who recently hired former General Motors advertising executive Steve Shannon to be marketing chief.
In a habit developed when current GM global marketing chief Joel Ewanick was at Hyundai between 2006 and 2010, the U.S. arm of Hyundai likes big media stages: Super Bowl, Academy Awards, Olympics and national political conventions.
"Make no mistake, there is no place for Innocean to hide if they aren't doing (breakthrough) creative and strategic work," Krafcik said.
He conceded he didn't have much of a choice in hiring Innocean.
"It wasn't so much a question of if it was going to happen, but rather when," said Krafcik. "But I was intrigued from the start by the idea of them creating an agency from scratch around our needs."
For Innocean's executive creative director, Jeff Spiegel, who joined the agency in mid-2009, the decision to come to Innocean was not that hard, he said, once he understood the plan.
"It is really a very well-funded startup agency that we can shape from a clean sheet of paper -- that's a very attractive thing," he said.
Don Longfellow, the strategic planning chief at Innocean, shares that sentiment.
"I have been able to design the planning function, integrating traditional and off-line (digital) functions exactly the way I want to without legacy operations, systems, politics ... it's been a great opportunity."
It is also true, though, that for most of the past two years since opening its doors in the U.S., Innocean has largely carried out a brand brief written by Ewanick and Goodby.
Centered on the tagline, "Think About It," the strategy originally had been intended to remove any perceived risk in buying a Hyundai - based on a reputation of bad quality in the 1990s - by emphasizing warranty protection and third-party endorsements from the motor press.
"Goodby's work was very good, and I was happy to continue down the road that was laid out," said Spiegel.
The biggest evolution of the strategy by Innocean has been to go from asking car buyers to "reconsider" their perceptions about the automaker to one that confidently challenged the assumption that Toyota and Honda are not peer brands of Hyundai.
But now there is at last some new direction.
Starting with the most recent Super Bowl, Hyundai began using "New Thinking. New Possibilities," a global strategy that Sanfilippo said was hatched by Hyundai's marketing group in Seoul and later adopted as a tagline.
"We are moving from a strategy of removing obstacles to purchase to pride in ownership," said Longfellow.
Innocean's creative efforts has ranged from steady message-centered work like the recent Elantra launch ads that emphasize its 40 mpg highway fuel economy to more humorous stuff.
One recent ad showed a sheep driving a competitor's car; a holiday end-of-year retail effort featuring an eclectic and campy couple whose music act is called Pomplamoose that pumped showroom traffic in December and went viral on YouTube.
Not that industry award shows are the last word in creative achievement, but Innocean's U.S. office made the Cannes short list at the International Advertising festival in 2010 for the first time.
"That was a big deal for Innocean, and a big source of pride," Spiegel said. "We are definitely pushing and reaching all the time to produce the kind of work that will be recognized on a world stage."
It's being noticed. Hyundai has become the fifth-largest automaker in the world, and, in the U.S., it has been one of the fastest growing brands.
In March, the company sold more than 60,000 vehicles, including nearly 40,000 Sonatas and Elantras. Hyundai and sibling Kia Motors together sold more than 100,000 vehicles in March, just the second time in the companies' U.S. history they reached that mark.
Hyundai is attracting customers with credit scores higher than those of Toyota, according to Sanfilippo, who cited proprietary research.
And its risky foray into luxury cars with the $35,000-plus Genesis sedan has been met with critical success from the auto press, and sales success at the dealership.
In the Southeast, Hyundai's share of the luxury car market is already above 10 percent, according to data supplied to Hyundai by R.L. Polk.
Last November, Hyundai grew even bolder in the luxury segment, introducing a $60,000-plus Equus positioned above its Genesis, and Innocean built a mobile app that digitally replaced the Equus' owners' manual.
Hyundai supplied Equus owners a free iPad with each Equus and shot a commercial cleverly depicting an owner reviewing a highly animated "owners manual" displayed on an iPad.
It caught competitors flat-footed and was deemed one of the best automotive applications so far.
Innocean grew out of the 6-year-old World Marketing Group, a low-key operation by design that consolidated Hyundai's and Kia's media buying. That operation – owned by the Hyundai Group - was more reminiscent of the old Hyundai, which was often reticent to assert itself publicly.
Coming off a horrific period of product quality, bad publicity and falling sales in the 1990s, Hyundai often flew under the radar in marketing.
That anonymity, which extended to not even having a WMG phone-book listing, made it tough for the agency to hire top talent or even get early cracks at some media opportunities, according to Cynthia Jensen, Innocean's head of media operations.
That changed a lot when Ewanick took over marketing in 2006 and WMG hired Initiative to handle buying for Hyundai and Kia.
Jensen, who had held senior posts at Y&R on Ford and FCB's Irvine, Calif., office before WMG and then Innocean, is largely responsible for both Hyundai and Kia often getting some of the most plum media buys.
The key buys include Hyundai's placement as the first ad on CNN coming out of Barack Obama's acceptance speech on Election Night.