Maxus and MEC to merge as GroupM reduces media agency portfolio to three

WPP is to shake up its media agency portfolio, reducing its number of major media agency brands from four to three by merging Maxus and MEC.

The move was announced in New York overnight, with local management in Australia this morning referring press calls overseas.

However, given that the two agencies are strong in different states, the merger would be unlikely to cause a large number of job losses locally. The merged agency would be likely to have just over 200 staff in Australia.

MEC is currently led by the Sydney-based James Hier, while Maxus is led by Mark McCraith, who splits his time between Sydney and Melbourne.

Maxus boss McCraith: Former marketer

The two bosses have relatively complementary skill sets. Hier is a strategist by background, while McCraith’s career has included time as a marketer for Jeep and client service.

Hier: Strategist

The global merger will see the new – as yet unnamed – agency led globally by MEC boss Tim Castree. A fortnight ago, Maxus’s global boss Lindsay Pattison took on the new role of chief transformation officer across GroupM, which is WPP’s media group. GroupM’s other media agencies are Mediacom and Mindshare.

Maxus currently has offices in Sydney and Melbourne, while MEC is in Sydney, Melbourne, Adelaide and Brisbane

Maxus clients include Hungry Jack’s, Uniqlo and Westpac.

In Melbourne, Maxus is the larger of the two agencies, with major clients including Jetstar and iSelect.

In Sydney, MEC clients include Blackmores, Campbell Arnott’s, Colgate Palmolive, Nestle, Vodafone and Campari.

MEC’s clients also include Domino’s and Allianz in Brisbane, and the SA government and Mistubishi in Adelaide.

Potential conflict clients will include Maxus’s $30m+ Jetstar relationship and MEC’s $7m Tiger Airways client.

Another issue needing to be addressed with be Maxus’s $38m Hungry Jack’s account, which is in a similar segment to MEC’s $10m+ Domino’s client. However, entrepreneur Jack Cowin has an ownership stake in both brands.

Other brands sitting within GroupM include digital media platform Xasis and digital agency Essence.

GroupM bought Essence in late 2015. It has about 10 staff in Australia.

Last night’s announcement focused on the MEC-Maxus merger as an opportunity to invest in the growth of Essence.

It stated: “GroupM is committing to the expansion of Essence, its digital-first agency, by adding traditional media capabilities and a larger geographic footprint to the agency’s existing media and creative credentials. In time, Essence will also lead several key GroupM client relationships as part of this restructure.”

“We’re committed to improving our service to clients. These moves will give us greater focus, help us innovate, and improve our speed of delivery,” said Kelly Clark, Global CEO of GroupM in the statement.


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