NSW shuts the door on indies; list down to two for master media account
Following attempts to get the NSW Government to update its tender in its search for a master media account provider, the Government has opted to push ahead, and the list is now down to two – OMD and UM, Mumbrella understands.
The government body has rejected the request from the IMAA (Independent Media Agencies Australia) to review the RFP for the $78 million account, as reported last year, instead pushing ahead with a search to return to a single provider, with the list now down to Mediabrands agency, UM and OMG’s OMD, Mumbrella has learned.
Mumbrella understands that after ten months of communication and dialogue with Victor Dominello, the minister for customer service and digital government, the IMAA has decided to pull the pin, after making no progress, and it became clear the minister’s office would decide not to proceed with the review.
The IMAA declined to comment at this stage. Mumbrella also reached out to OMD and UM, with the former declining to comment, and the latter yet to respond.
The Expression of Interest (EOI) seeking a “single media agency supplier, or panel of agencies from one media agency holding group”, effectively ruling out any Australia-owned indie agencies, was published H2 2021.
After an initial shortlist of five multinational holding groups, the list has now been brought down to two, who will compete for the entire account. The NSW Government’s current client list includes agencies UM, OMD, Havas Media, Atomic 212 and WPP. The account was previously held by UM, winning it from Mediacom in 2013.
Speaking to Mumbrella, managing director of Nunn Media, one of the largest independent media agencies in Australia, Matt Nunn called the process “a bunch of baloney”, and it doesn’t surprise him the government would opt against reviewing the process.
NSW minister for customer service and digital government, Victor Dominello
“At the end of the day, it was always going to be about price” he continued, calling it a “waste of time” for independent agencies. “My advice for indies would be to not look at it unless they look at changing their ways”.
Chairman of independent agency Atomic 212, another of Australia’s largest media agencies, Barry O’Brien told Mumbrella it was “disappointing”, “extraordinary”, and “a great shame”.
Atomic, which currently services part of the group-serviced NSW master media account, has a great relationship with the government body, O’Brien said, however that under the set terms in of the RFP, his agency “didn’t qualify”.
He said it would’ve been nice to have been included, being the largest spender in the market, but realistically, no single indie could service it on its own, adding that a number of holdcos did “reach out” to ask if Atomic would like to participate in conjunction with them, however, it declined.
Mumbrella also understands independent agencies have been invited to be a part of the NSW Government’s Advertising and Digital Communications Services Scheme, however this does not include media services, only digital communications.
The NSW Government procurement rules online state contracts awarded for government services about $3 million must include a 10% allocation for SMEs.
Last year, the IMAA’s Sam Buchanan told Mumbrella: “We think there is enough business for everyone, for holding groups, for local Australian-owned businesses. It’s just a better way of doing it, and when the hold it with just one, it’s just lazy policy.”
Following publication, a spokesperson for the Department of Customer Service provided Mumbrella with the following statement:
“The NSW Government manages media buying for more than 250 advertising campaigns a year and in July last year opened a tender for a new Media Agency Services contract.
Any member of the Independent Media Agencies Australia (IMAA) had the opportunity to be part of the tender process for the NSW Government Media Agency Services contract managed by the Department of Customer Service.
By aggregating and centralising media planning and buying services, the NSW Government is expecting to save at least $100 million in three years.
For probity reasons we cannot comment on the procurement process until the tender is awarded. The new contract will commence on 1 October 2022.”
The IMAA’s Sam Buchanan added:
“It is now a full-blown conclusion that the NSW Government will not support Australian owned businesses and send the money off to another international economy in the UK, US, or France. The EOI process has clearly cut out Australian owned independent agencies. This is un-Australian and anticompetitive at a time when indies need the support of their government. It is a terrible message to send to Australian owned businesses. We are not asking for a free kick, just a chance to compete.”
“Herding independent media agencies over to the Advertising and Digital Communications Services Scheme is farcical and only caters to niche digital services and does not even include media agency services. The NSW Government has also handballed the 10% SME allocation for its contracts to Treasury, which is another rabbit hole to be negotiated. We are incredulous that the NSW Government has turned its back on Australian owned businesses.”
This story was updated with additional quotes after publishing.
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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These assertions are at odds with the states own small biz commission’s purpose!
https://www.smallbusiness.nsw.gov.au/what-we-do/mission
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