IAG becomes second big client to switch from Mediacom to Mindshare after audit findings
Insurer IAG has moved its $30m media account from Mediacom to sister agency Mindshare a week after revelations employees had lied in reports about the TV audiences its advertising was reaching for up to two years.
IAG, which has brands including NRMA and SGIO, announced the move to staff yesterday and follows Foxtel’s decision move to the sister GroupM agency in December, when revelations emerged of the discrepancies on their account.
IAG confirmed the move to Mumbrella this morning in a statement with Jane Merrick, head of marketing for IAG saying: “After a lot of consideration and due diligence, we have made the decision to move our media buying to Mindshare, a decision we have made with Mindshare, Mediacom and GroupM senior management.
“We are looking forward to putting the recent issues behind us, and know that Mindshare will be a strong partner to work with in the future.”
Those issues around Mediacom’s reporting first emerged publicly in late November when Mumbrella revealed that the GroupM media agency had lost around a dozen staff over the issues.
Mediacom was forced to bring in external auditors EY to review its accounts and systems, with the audit company’s report last week confirming staff in one of the major TV buying groups of has deliberately faked campaign reports for three of its biggest clients, Yum! Brands, Foxtel and IAG, for at least two years.
It was also revealed Australia’s second largest media agency had sold free and heavily discounted ad spots it had been given by media owners in exchange for an agreed level of ad spend – commonly known as value banks – to four of its clients against GroupM policy.
Foxtel and Yum! Brands were amongst those clients and have since been refunded.
Last week head of marketing for the firm Jane Merrick indicated IAG was seeking compensation from the agency and that it was “reviewing its options” on whether to take its business elsewhere.
On the same the audit findings emerged Australia’s biggest newspaper publisher News Corp announced it was dumping its media agency UM to move its $10m account to Mediacom, with the newspaper publisher’s marketing boss Damien Eales saying that GroupM had given him a value proposition he felt unable to turn down.
“The deal John (Steedman) and (Mediacom CEO) Mark Pejic put on the table with Mediacom offers financial benefits and business synergies that we felt justified the change and made a lengthy pitch process an unnecessary encumbrance on the industry,” said Eales, in a statement.
When contacted this morning Mediacom declined to comment directing comment to IAG.
Update: NRMA has just issued the following statement:
NRMA Insurance switches media agencies
NRMA Insurance has made the decision to transition its media buying from Mediacom to Mindshare effective immediately.
Jane Merrick, Head of Marketing Communications for NRMA Insurance, SGIO and SGIC said: “After a lot of consideration and due diligence, we have made the decision to move our media buying to Mindshare, a decision we have made with Mindshare, Mediacom and GroupM senior management.
“We have had a strong relationship with Mediacom over the last five years and appreciate their openness and quick handling of the recent audit. We also strongly value the GroupM buying power, scale and investment in tools and technology.
“We are looking forward to putting the recent issues behind us, and know that Mindshare will be a strong partner to work with in the future, Ms Merrick said.
Mindshare will service NRMA Insurance in NSW, the ACT and QLD, SGIC in SA and SGIO in WA.
Nic Christensen
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Might be time to buy STW shares if they are going to tip all the Mediacom clients into Mindshare!!
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Little do IAG know that the rates they get can pretty much be got anywhere.
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Good English Derrick ^^
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Mediacom and Mindshare both trade via GroupM so what is the difference in moving an account between agencies if they both trade through the same holding company?
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Rates aren’t the issue but trust in the agency leadership is an issue and Mediacom need to addres this. GroupM are doing a good job at justifying the buying performance but Meduacom may have fallen into a black hole when it comes to trust.
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It’s all about the money, it’s all about that dum dum dedalay dum…
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It’s just symbolic. Oh and someone makes a better bonus if business swings that way. Think about it Nic.
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Sounds like a personal vendetta ‘It’s Clear’? Of course all other agencies can be trusted, it’s just mediacom (insert sarcastic tone). All the comments, on all the mediacom articles, talk about how all agencies have the same issues (including the editorial pieces). They are just the first to fall on the sword of an industry issue!
“The tallest blade of grass is the first to be cut”
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