Mercedes owner Daimler reviews media, as Publicis and Omnicom enter two-horse race for $20m account
Daimler, owner of Mercedes-Benz, is pitching its media account in Australia, as part of a wider review of its global agency arrangements. Understood to be worth close to $20m in spend, the closed pitch is a two-horse race between the incumbent Omnicom and Publicis Media, which handles digital and creative in other markets.
What you need to know:
- As part of a closed pitch, Omnicom and Publicis will compete for Mercedes' $20m media account.
- The decision is part of a global strategy by Mercedes owner Daimler to consolidate its entire portfolio.
- Creative and digital are also being reviewed globally, however, sources have heard little noise of any activity locally.
Owner of Mercedes-Benz, Daimler, is pitching its media account in Australia as part of an ongoing strategy to consolidate its entire advertising portfolio into one agency network.
The consolidation follows the decision to merge Daimler's marketing and communications divisions into one business unit.
The closed pitch is a two-horse race between Omnicom, which is the incumbent and Publicis, which currently manages the majority of the auto brand's digital and creative.
While sources close to the pitch have confirmed that it is underway in Australia, there has been little noise on any creative review.
In Australia, the majority of the creative is adapted from global work for local use and is developed by both Publicis Emil and Omnicom's Merkley + Partners and BBDO, however, this varies by market.
Daimler had been contacted but was unable to respond at the time of publication, while Publicis and Omnicom declined to comment.
Understood to be worth close to $20m in annual billings, the Mercedes account has been held by Omnicom for close to 15 years – handled by its Foundation agency.
The luxury car brand has been a strong performer in Australia and was a beneficiary of the early Covid auto boom, racking up double-digit new car sales growth throughout 2020.
The latest VFACTS figures show a year-on-year increase of 16% for the month of February and 9% month-on-month growth for March in 2021.
Daimler's decision to consolidate its entire advertising portfolio into one holding group has been an ongoing industry conversation over the last 18-months, with major brands such as Johnson & Johnson (Omnicom), Samsung (CHE Proximity) and Toyota (Publicis) all making similar moves.
One industry insider told Mi3, that the Australian market would be an important element of the overall global strategy, which is in line with comments made by media agency executives in a report from Mi3 last week.
In the same article, Starcom CEO Nick Keenan pointed to agency consolidation as a major trend for pitches, both locally and globally, over the next 12-24 months.
Keenan suggested brands would use their next pitch as an opportunity to "slim down the agency village", which would suit Publicis' approach if that prediction turns out to be correct, as marketers seek simplified structures and broader capabilities from fewer partners.
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