MEC will launch a Brisbane office after taking the Domino's account, worth between $8 and $12 million, off Maxus. It has bold plans for Queensland expansion and is looking for a few slices of the action beyond Domino's. But the local competition has already questioned the wisdom of such a move.
That is their perogative. Brisbane has been described by those operating within it as "a knife fight in a phone box."
Despite that, MEC boss Peter Vogel reckons there's room for another challenger and he's looking for a general manager who's up for the fight to run the operation, which will be located with other GroupM Brisbane units.
He said it would service five existing clients, including the Domino's business. Domino's said it moved because it wanted a local agent. Rather than risk losing the billings outside the group, Vogel and Maxus boss John Chadwick quietly worked out a deal that would allow MEC to take the business and then push on. Brisbane is not thought to be a priority focus for Maxus.
Vogel wouldn't say who the other clients were, but said the roster made it more than a service hub, and that the unit would aim to win new business within mining, tourism and property development. He was unperturbed by the competitive scrap MEC may be wading into, because all markets are cut-throat.
“The Brisbane market is small," Vogel said, “but it's a wealthy state, it has mining and tourism. It has faced problems with the floods and in tourism with the strong dollar, but I think Queensland has recovered, and there is a lot of new business potential. You'll see a resurgence, and we'll be chasing those new opportunities.”
Competitor agencies quickly attempted to curb that enthusiasm.
“The overriding point is that there are too many agencies across Australia as a whole," said ZenithOptimedia chief executive Ian Perrin. "But in Brisbane the issue is that it is such a small market but most of these agencies still have a presence. It makes it very competitive, and growth in the number of agencies will lead to dilution in the market. But that's just capitalism, it's simply market economics at work.”
Queensland-based Kenny Stewart, CEO at Mitchell & Partners, said the growth potential for agencies in Brisbane is “fairly static”. He argued lots of national advertisers are “looking south” for agencies and suggested that it might be tricky for a new agency to grow beyond its foundation clients. "Clients tend to be more sticky, and don't want to move”.
Despite the Domino's switch taking many staffers at the agencies by surprise yesterday, Chadwick said it had long been planned and that there was “no bad blood whatsoever” between the two agencies. He said the benefit of being a part of a larger network was that “we can compete but we can also work together”. Moving the client over also frees the agency to target other opportunities.
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.
Have something to say? Send us your comments using the form below or contact the writer at adnews@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.