THIS week’s decision by Marketforce to do business with Omnicom Media Group has shaken up Australia’s media purchasing landscape.
THIS week’s decision by Marketforce to do business with Omnicom Media Group has shaken up Australia’s media purchasing landscape.
The move of Marketforce’s $160 million annual media spend will catapult OMG ahead of rival Zenith Media, according to OMG chairman Barry O’Brien.
“This is significant in terms that $160 million is moved from one group into another,” Mr O’Brien said.
“The impact for us is it puts us over the $1 billion mark [of media spend]. We have a larger slice of the pie to negotiate rates for our clients. In terms of common owned groups we would now be the largest in Australia.”
Marketforce’s decision to move its media buying from George Patterson’s Zenith Media to OMG comes after OMG-aligned Clemenger Communications purchased a stake in Marketforce, Perth’s largest advertising agency.
The sale of an undisclosed minority interest comes less than a year after Marketforce management acquired full ownership of the firm.
A group of executives bought George Patterson Bates’ related investment of 50 per cent last June, which was triggered by Cordiant Communications’ sale of George Patterson Bates.
Marketforce group managing director John Driscoll said the new investment would have little effect on the operation of Marketforce.
“There will be no changes in management structure,” he said.
“Our association with Clemenger forms another part of our strategic plans to keep Marketforce at the cutting edge of the advertising industry.”
Clemenger is one of the country’s largest advertising firms, with annual Australian and New Zealand billings of $1.2 billion.
Its major clients are Gillette, Pepsi, Air New Zealand, Mars Corporation and Mercedes Benz.
International agency BBDO is a minority shareholder in Clemenger Communications.
Mr Driscoll said the investment was an indication of the strength of WA’s advertising market and the gains made by Marketforce in recent times.
“It has [2003] been a record year for Marketforce and some of our clients have grown substantially,” he said.
Mr Driscoll said the investment made by Clemenger would give Marketforce greater scope to work on national and international advertising accounts.
“It certainly gives us more connections on the east coast and the BBDO network worldwide gives us links into Asia,” he said.
Clemenger chairman Robert Morgan, who was in Perth finalising the deal this week, said his company had been keen to re-enter the market after it exited WA about eight years ago.
Messrs Morgan and Driscoll said Clemenger’s investment would not extend beyond a minority interest.
Last August, John Singleton’s STW Communications took a 49 per cent stake in Marketforce’s rival, The Brand Agency.
“This is significant in terms that $160 million is moved from one group into another.”
- Barry O’Brien
