Adcorp launches action against Dentsu Mitchell over government master media account
Listed agency Adcorp Australia has launched action in the Supreme Court of NSW over Dentsu Mitchell’s decision to dump it from the Australian government’s master media account which the agencies won together in 2014.
Adcorp lodged a statement of claim against Dentsu Mitchell in the court last week seeking damages.
In a statement to the market the company said it was also seeking payment for unpaid invoices.
“Adcorp is seeking damages arising from the termination of services that Adcorp was providing to Dentsu Mitchell in the context of Dentsu Mitchell’s role as the principal contractor under the Australian government’s Master Media Agency Contract (MMA),” the statement said.
“Adcorp also claims payment for unpaid invoices in the context of the provision of these services. The MMA contract commenced in July 2014.
“Prior to this Adcorp had been providing campaign services to the Australian government since 2008, however from July 2014 the previous campaign and non-campaign contracts were combined within the one contract with services being performed by both Adcorp and Dentsu Mitchell.”
Adcorp and Dentsu Mitchell combined on the business when Mitchells beat incumbent UM.
The win was a major fillip for the agency coming shortly after the retirement of Harold Mitchell.
Mitchells ended the contract in September with Adcorp noting in its half-year results: “This issue has significantly impacted Adcorp’s future earnings and all necessary steps are being taken to aggressively pursue the issue.”
At the time of the loss CEO David Morrison described it as a major disappointment.
“After several years providing services to the Australian government and its many clients, we are disappointed this relationship will no longer continue,” Morrison said.
“Government continues to be an important pillar to Adcorp with current contracts encompassing the Western Australian and Northern Territory governments and as such we will continue to invest in enhancing our government services and our online advertising and communications platform.”
