EXCLUSIVE: Qantas has called a
global review of its creative and media agency arrangements for the
first time in ten years, triggering a race for a berth on the roster
of one of Australia’s most coveted advertising accounts.
The above-the-line ad spend is worth an estimated $30 million locally, but including overseas markets, sponsorship and the airline's relationship with Tourism Australia, is worth considerably more.
And
they're off ...
Roster agencies M&C Saatchi,
Ogilvy, Mojo, Wonder and media buying and planning agency,
ZenithOptimedia, have all been invited to pitch. Agencies were
put on alert this morning.
At present, M&C is lead brand agency, handling planning, brand, product, sponsorship and other marketing projects. Ogilvy is responsible for retail, digital and other marketing projects, with Mojo across internal brand and other projects. Wonder heads up experiential.
The business covers four large regions;
Americas, Europe which includes South Africa, Asia, and Australasia. The national carrier intends to expand
its suite of agencies as part of a five-year plan to build a “truly
modern, customer-focused and competitive global airline business”.
The Qantas Frequent Flyer programme,
handled by M&C Saatchi, is unaffected by the review, which is
being facilitated by Melbourne-based Enth Degree.
Enth Degree
has already helped complete due diligence on the industry following
a mini-pitch for an intermediary. The appointment of Enth Degree has
led to the development of a timetable and key dates that will provide
a framework for the advertising and media roster.
The
timetable ...
A long list of agencies, which will number
between seven and eight, will be compiled in the coming weeks, with a
list firmed up in October.
A second stage will commence in the
January to February period, in which a shortlist of agencies will be
determined. The final roster is expected to be announced towards the
end of March.
The first activity from the new roster is
planned for the post-London 2012 Olympics period.
The
process ...
Qantas has drawn up a framework of five
distinct streams, four of which encompass creative, with the fifth
stream covering media planning and buying. The brief places a strong
emphasis on strategy.
The four streams are as follows:
strategy and brand, digital, sponsorship and experiential, and best
of breed in international markets. The international agency will need
to have a strong capability in the majority of Qantas' key
international gateways; Sydney, Auckland, London, Singapore, New York
and Los Angeles.
Qantas executive marketing director, Lewis
Pullen, told AdNews: “We're looking at whether we have a
best of breed in all of our international markets. We're a global
business and we need an international network to support the brand so
we're taking the opportunity to review that as well.”
Pullen
stressed that the first stage of the pitch process does not include
creative presentations, and will be limited to capabilities,
credentials, and a small amount of strategy. There will also be “some
staggering” between the four creative streams and the media
stream.
The five stream approach will not necessarily lead to
the appointment of five agencies, and could in one potential outcome
see the appointment of one agency engaged to work across multiple
streams, in conjunction with one agency on the media stream.
“It's
going to be really fascinating to see whether the full-service agency
one-stop model can deliver that or whether you have to go to a much
broader group of creative partners to deliver across all of those
streams. It's actually going to test the inherent structure of the
agency market I think. The outcome is going to be quite interesting
for the industry as a whole. It's up to the agencies to come back to
us with their best people and they may not be sitting in Sydney,”
Pullen said.
In a potential move that has echoes of
Commonwealth Bank's controversial appointment of US ad agency Goodby Silverstein in 2007, Pullen did
not rule out employing the servies of a foreign agency to produce
local work.
Agencies will have the freedom to pitch for all
four streams, or focus on just one stream. The five streams do not
include PR, design, and loyalty, or the planned premium Asian-based
airline, which is in the very early stages of development. The
no-frills Qantas-owned airline Jetstar is also excluded from the
review.
The key Qantas players ...
The pitch process will be led by
Pullen, in conjunction with executive general manager, commercial,
Rob Gurney, who will consult with chief executive, Alan
Joyce.
Gurney explained the reasons for calling the review in
an exclusive interview with AdNews: “We have a great
partnership with these agencies. These guys have done some of the
best work ever produced in Australia, award-winning advertising that
still to this today wins popular consumer awards such as 'I still
call Australia home.' In running a business we have to critically
assess everything that we do, always. We have that obligation to our
staff, customers, shareholders and other stakeholders.
“I
don't want this to be viewed in the context of 'this is an
advertising agency review' – it's a much broader part of our
business ethos than that. It's been more than a decade since some of
these agencies have been appointed. That's not to say we haven't had
reviews and contract negotiations in the last ten years. But the
industry has evolved very rapidly in the last ten years. There's new
media that wasn't around when these agencies were appointed. With new
media and models, has come opportunities to review how we set
ourselves up for success in a more effective way going forward. We're
going into this with a very open mind.”
Gurney said the
airline had no plans to reduce ad spend going forward. According to
the Top Advertisers Special Report exclusively published in the
current issue of AdNews in conjunction with Nielsen [page 32, 23
September 2011], Qantas spent an estimated $27.4 million in the year to June, up $3.1 million year-on-year.
Spirit of
Australia ...
Pullen said the airline's iconic strapline
'Spirit of Australia' is not under threat, but other brand
positionings may fall under the axe.
Pullen said: "We've got
our brand strategy in place and our core identity won't change. We've
got an incredibly open mind as to where we land with this. We don't
want to be prescriptive about outcomes, part of this exercise is
about getting an unfettered and unencumbered view of potential
partners around how we can take our brand forward and better manage
our marketing and communications."
Signs that the winds of
change were beginning to blow through the Qantas marketing department
were evident in recent months.
In a major departure from
traditional activity featuring the signature Qantas red, the airline
introduced a splash of pink in a recent execution for its Business
Class offer featuring Dame Edna. Hot on the campaign's heels was
another edgy burst of activity to support the airline's association
with the Wallabies.
A branded content campaign, co-written
by writers from TV show The Chaser, is being aired on Sky News
and through Nine Network, Fairfax Media and Telstra mobile.
The films, which are available to watch
online, follow a convoy of 25 motor homes travelling to matches at
the Rugby World Cup.
The more progressive branded content
approach is a nod to Pullen's background, who has a strong background
in production, and is driving fresh thinking at Qantas.
The review comes at a turbulent time
for Qantas, which is involved in a tussle with unions over over job
cuts and is under renewed pressure from Virgin Australia, which unveiled a
major rebrand earlier this year.
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