ACCOUNT REVIEW

Business gets moving

While the pace of pitching is again expected to pick up over the next month or two, we take a look at the main moves of the year so far. The new M&M will delve deeper into these than ever before

Unilever splitting its $5bn global media business between Mindshare, Interpublic and Omnicom Media Group was not the only significant win of Q1. Each quarter M&M will keep track of the key global and local wins of the quarter through tables, comparison charts and in-depth analysis.

To tide you over until then, here are

few of the main new business stories so far this year. Bacardi awarded Mediaedge:cia to its global communications planning business, consolidating its planning operations. The rum brand boasts a global adspend thought to be worth around $200m. Consolidation was the buzz word of 2009 when it came to calling reviews; the trend shows no sign of waning this year. This was one of a number of wins for

MEC, as it was made clear WPP was keen to strengthen its position in Asia. Wrigley appointed MEC in Singapore, the Philippines, Indonesia and Malaysia. The confectionery company already works with MEC in 10 countries around the world, including China and the UK – although the Chinese business is now in review. Sister agency Mindshare saw success with Diageo, as it picked up the consolidated business in Latin America and the Caribbean. But combining its

ADSPEND TREND CHECK

WITH NIELSEN ADVIEW PULSE

-1.6%

2009 adspend was down 1.6% globally, protected by 6.6% growth in Asia Pacific. North America was down 9.4%, while Europe was down 4.9%.

MEDIA BY REGION

% CHANGE YEAR ON YEAR

N. Am Asia Pac. Europe

-5.6%

TV

Radio -8.0% N/Ps -9.5% Mags -21.4%

10.4% 7.8% 1.1% -6.4%

www.mandmglobal.com

-2.8% 1.9% -5.0% -14.7

Industry View

Andy Pearch

Director, Mediasense

Are agencies getting better at retaining their clients?

One in 5 accounts – including General Motors, Carlsberg, Coty, EDF, Unilever and Home Depot – were retained over the last 12 months, compared to an historical average of 1 in 7. Is this a blip, or the start of a trend?

Barcardi consolidates its global comms planning into Mediaedge:cia

agencies’ strength paid dividends for WPP, as GroupM won both Amway in China and the COI business in the UK. In the banking world, already

recovering its level of spend, Deutsche Bank handed its global business to Carat. Its experience with GM hasn’t put

Publicis Groupe off working in the automotive sector, as it renewed its global strategic and creative partnership with Renault, across 28 markets until 2013. Honda meanwhile appointed

Starcom Mediavest Group to handle its consolidated €150 pan-European media activity. The deal took effect from the 1 April and covers 21 markets. Pitches recently announced include SCA globally, L’Oréal in the US and O2 in five European cities.

ADSPEND BY SECTOR

% CHANGE YEAR ON YEAR (2009 VS 2008)

10 15 20

-25 -20 -15 -10 -5 0 5

19.7 10.6 2.9 -0.3 -5.6 -9.0 -12.5 -15.1 -21.3

Automotive Finance

Source: Nielsen Global AdView Pulse, 2009

FMCG

-11.4 -12.5 -13.2

Of course, there were more pitches worldwide than ever in 2009 – about 30% more than normal – and there was certainly an element of “pencil- sharpening” going on by some brand owners, who were actually quite happy with their agencies, but were under pressure to reduce costs. But it wasn’t necessary for them to go to market to achieve this result.

Now in 2010, it seems inevitable that the number of pitches will start to come down. For one thing, there are more global media agency contracts than ever, and it is clear that these are less likely to be unpicked than local or regional arrangements.

For more in depth comment go to

mandmglobal.com/ new_business

Contracts are becoming less portable these days, as the role of the media agency has evolved from being a buyer of spots and spaces to being more fully integrated and “plugged in” to the digital sales funnel. There are genuine issues around the ownership of data, which need to be carefully considered by clients before considering a switch.

I believe we are turning a corner, where agency performance is no longer judged on its ability to cut costs, but to build genuine value and sales. The best performers will be the clients with the strongest and most productive agency relationships. 2010 might give everyone in the industry a chance to catch their breath. Perhaps both clients and agencies will use the opportunity to draw up more progressive contracts. ○

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