EXCLUSIVE: L'Oreal has extended its highly lucrative media contract with Mediabrands-owned agency UM, following conversations with multiple agencies in the market.
In recent weeks L'Oreal has been holding discussions with agencies in the Melbourne market, igniting speculation that a pitch might be in the works.
However, it now appears these conversations were more about L'Oreal testing the market in line with corporate governance, because the brand has extended its contract with UM without going to pitch.
UM Australia chief executive Mat Baxter said in a statement: "I wouldn't pay too much attention to the rumours because L'Oreal isn't going to pitch. We have just this week extended our contract with them for 2013 and beyond."
A L'Oreal spokesperson said the company was “in the process of rolling the contract over”.
L'Oreal is one of the most lucrative pieces of business in the Australian media market.
While the brand's media spend was cut drastically last year to around $25-30 million, it traditionally sits around the $45 million mark and can go as high as $60 million.
It remains unclear whether L'Oreal will increase its media spend to traditional levels in 2013, or if its spend will continue at a reduced level.
One source told AdNews that just because L'Oreal had been talking with agencies it did not mean a formal review was in the works. The source said any talk of a pitch was “premature”, and suggested the speculation was a result of the “Melbourne rumour mill”.
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