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News Analysis 29 Sep 2020 - 3 min read

Melbourne moving: Victorian Government media pitch extended, Toyota review drives to final stages, rumblings at L'Oreal

By Josh McDonnell - Senior Writer

An estimated $250 million is in play in Australia’s second largest advertising market, as Victorian-based brands up the tempo on the state’s pitching carousel. There are rumblings around cosmetics and beauty hosue, L’Oreal, while the $100 million Victorian Government media account sees further delays and auto giant Toyota enters the final stages.

What you need to know:
  • Victoria’s pitching cycle is accelerating, with media ad accounts worth a total of $250 million set to be decided in the coming months.
  • Cosmetics and beauty group L’Oreal is subject to much industry speculation about its $40 million media business.
  • The review of the $80 million Toyota account is entering its final stages, with a holding group expected to win. Industry insiders say the car company’s creative and media pitches are being run separately.
  • The future of the $100 million Victorian Government master media account is also up in the air, with incumbent agency MediaCom being handed another six-month extension because of COVID-19.
  • Melbourne-based clothing brand Bonds was also pitching its creative account in August, with Special Group appointed later in the month.
  • Australia’s fifth largest retail bank, Bendigo Bank, appointed Nunn Media to its $8 million media account earlier this month.


Millions in Melbourne

The severe restrictions in Victoria in recent months have not slowed the advertising account pitching cycle, with some large advertisers in the state pushing ahead with account reviews.

It is estimated that there is roughly $250 million of Melbourne-based advertising accounts currently up for grabs, as companies search for agency partners to work with in a post-COVID economy.

The latest brand which is said set to review its media agency is cosmetics giant L’Oreal.

Last late year, Dentsu Aegis-owned shops Carat and digital agency Columbus retained the $40 million business after L’Oreal extended their contracts by 12 months. L'Oreal says it is not calling for a pitch although some with knowledge of the business say the beauty giant is expected to make a decision by December on the future of its agency relationship.

Late last year, L’Oreal completed a research project that saw the Australian and New Zealand business reweight its media investment away this year from YouTube to TV and Instagram, while at the same time running less ad campaigns overall.

In 2019, L’Oreal held a global summit for its media and marketing leaders in Berlin. Australian Media Director Lyndall Campher told Mi3 at the time it provided a forum for best practice and some of the approaches L’Oreal is taking internationally would likely land in Australia. In-housing programmatic was one possibility.

“[The US and Canada] have taken programmatic buying in-house, which is something we haven’t really considered in Australia… yet,” Campher said.

“What we think we might do is start off with a hybrid model with Carat.  And then as more of our spend moves into digital, then, we’ll probably move it in-house."


Master media and major auto

Elsewhere in Victoria, the race to be named lead agency for one of Australia’s top master media accounts has hit another hurdle.

Heavily impacted by COVID-19, the $100 million Victorian Government master media account has once again been put on hold.

A review of the account started in in March. Industry insiders confirmed that incumbent agency MediaCom has been handed another six-month extension, as the state government weighs its options. MediaCom has held the account since 2017.

Sources told Mi3 a decision to hire a new lead agency didn’t make sense given the current issues within the state and around key activities such as domestic tourism.

“The Victorian Government State Purchase Contract for Master Agency Media Services (MAMS) with MediaCom has been extended for 6 months,” A statement from a departmental spokesperson read.

“This extension was required due to impacts associated with the coronavirus (COVID-19) pandemic and to ensure business continuity with minimal disruptions for the State.”

The contract expiry date is now 31 May 2021. All tenderers have been notified of the new SPC commencement date of 1 June 2021.

Another hotly-contested account based in Melbourne, Toyota, seems to be finally approaching the finish line.

Mi3 revealed in January this year that Toyota – which spends $90 million a year on media advertising and is the largest advertiser in the automotive sector – was reviewing its account.

The review was paused at the start of the COVID outbreak but is now back on track, with final presentations expected to take place in the coming weeks.

The media part of the Toyota account has been held by The Media Store for the past 20 years, while Saatchi & Saatchi has been its creative agency since 2015.

It is understood Toyota is considering hiring a holding group to handle creative, media and digital. However, those close to the pitch have told Mi3 there is some confusion as to how the decision will be made, as the creative and media pitches are being run separately.


Not all media in Melbourne

While it appears to be a media account review-led surge in Victoria, creative accounts are also up for grabs.

A review of the creative account of one of Australia’s most recognisable brands, Bonds, was completed last month with Special Group taking over. It is was previously held by Leo Burnett.

Online pureplay retailer Catch selected its first lead creative agency last month, appointing AJF GrowthOps.

Catch CMO Ryan Gracie told Mi3 the company made the appointment based on Zoom pitch presentations and the change was part of its strategy to use above the line campaigns to back its performance media budget.

“We’ve been hooked on the performance marketing drug, instead of attempting to insert our brand in the more traditional above the line media,” Gracie said.

“Digital marketers [generally] want to know explicitly what every dollar returns and I think it's a real paradigm shift for them to be able to spend money on something that's a little bit more nebulous.”

Another brand in the mood for a change was Australia’s fifth largest retail bank Bendigo Bank. With 1.9 million customers across the country, earlier this month Bendigo appointed Melbourne-based independent media agency Nunn Media to lead its $8 million media account. It was previously an in-house operation, with some work conducted by Dentsu.

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Josh McDonnell

Senior Writer

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