MediaCom Global CEO says agency pulled plug on Pac Brands because it was ‘unprofitable’

Steve AllanThe global CEO of MediaCom has confirmed the agency decided not to participate in the ongoing Pacific Brands pitch because they “can’t say yes to unprofitable business”, and urged competitors not to get “sucked into a race to the bottom”.

Last month GroupM took the unusual step of publicly announcing neither MediaCom, which had held the business for 17 years, nor any of the other agencies from the group would tender for the clothing brand’s media business, with MediaCom’s  Melbourne managing director Peter Barrie saying the two businesses “are no longer aligned”, but not elaborating on the reasons behind the split.

However, in an interview with Mumbrella Asia at the Festival of Media Asia, where MediaCom was named regional network of the year, global CEO Stephen Allan said: “The greatest threat to our business is people. And by this I mean this industry losing its brightest to other industries. We are under other pressures, such as the rise of procurement, but we still have to be able to pay our people fairly. That comes about by being paid fairly by clients.

“MediaCom Australia recently withdrew from a pitch for Pacific Brands. We took the decision not to participate. Mumbrella covered the news quite well without getting anyone in a court room. Agencies have to get to a point where they can say no. Agencies can’t say yes to unprofitable business. If they do, it’s a race to the bottom.”

Pacific Brands declined to comment.

In a wide-reaching interview Allan, who oversees the agency’s 5,600 staff in 86 countries, said the industry has to stand up to abusive clients, following the deaths of two young workers in China and Indonesia last year, blamed on overwork.

He said: “Those incidences are very sad. The first thing I’d say is that clients can be very demanding. Sometimes they don’t respect the right of their agency team to have a private life. As an employer, I’m not looking for people to be in the office until late at night. People who have a healthy personal life outside of work is a good thing; when they come back into office, they tend to be in a fresher state of mind.”

“I won’t tolerate unreasonable client behaviour. You have to stand up to clients, as it can get to the point of abuse. Occasionally you get the maverick kind of client. And I have to rely on my local management to eek out those situations. In those incidences, you have to be prepared to say no,” he added.

He also said the Australian office is the network’s second biggest in the region after China, saying the region is forecast to outstrip ad spend in North America for the first time ever: “The days of global CEOs visiting the region to give Asia folks a patronising pat on the head are well and truly over.”

You can read the full Q&A with Stephen Allan here.


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