The Australian Government has handed its circa $150 million master media agency services contract to UM, ending the tenure of DentsuX.
AdNews understands that UM, OMD and the incumbent had been in the running at the later stages of the account, which had billings of $175 million in an election year, but is more consistently around the $150 million mark.
DentsuX (mostly under the Dentsu Mitchell brand) has held the campaign portion of Federal Government's MMA for the past three years, winning the business from UM.
Industry sources have confirmed the move although it has yet been formally announced by the government.
The scope of the MMA services arrangement includes:
- secure optimal media discounts on Commonwealth-wide media rates by consolidating government advertising expenditure and buying power;
- incorporate media planning and placement, and media industry knowledge and expertise to government advertising activities through the MMA Arrangement;
- reduce MMA participants’ procurement costs by having one MMA Services deed and avoiding the need for entities to set up and manage their own media procurement processes;
- drive efficiencies through the implementation of evidence based campaign and non-campaign policies, by using advertising data to inform government’s decisions; and,
- provide advice to government in relation to information and advertising campaigns and the arrangement’s performance.
The government has also stressed the master media partnership should establish a "dynamic, innovative and flexible arrangement" that provides effective value for money advertising through a variety of media, such as emerging technologies.
The Federal Government master media account is one of the largest and most prestigious media accounts in the country in terms of annual billings.
However, sources suggest that it can be tricky for agencies to make much money from government work because they are often run under very tight budgets and strict procurement procedures.
For UM, the win continues the great start to 2018 of new boss Fiona Johnston. UM picked up the AGL energy account in February and last October it retained ING in Johnston's first week at the helm.
For DentsuX it's the second major client loss in six months after MediaCom picked up the Victorian Government master media contract last year.
Dentsu Aegis Network ANZ chief executive Simon Ryan previously told AdNews the agency would continue operating even if it lost the Federal Government account. He said the impact would be minimal.
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