Victorian Government takes $101m master media account to tender

After a two-year relationship with Mediacom, the Victorian Government is taking its master media account, worth over $100m, to tender, choosing not to extend its contract with the Group M agency for up to an additional two years, Mumbrella can reveal.

Mediacom took over from Dentsu Mitchell on 1 December 2017 with the contract set to expire on 20 November this year. The government did have two one-year options to extend the relationship.

From 1 July 2017 to 30 June 2018, the Victorian Government spent $105.7m on media advertising.

An expression of interest for the media strategy, buying, planning, and reporting account was released to the market on Friday, with the tender, run by the Department of Treasury and Finance, set to officially commence in April. The expression of interest process is to “engage with the media supplier market and assess the capability of its participants”, before the Department evaluates those responses and determines which will be invited to participate in the tender.

“The State will, in its discretion, invite those Respondents it considers appropriate and makes no commitment or representation as to any minimum or maximum number of Respondents that will receive an invitation from the State (if any),” the expression of interest reads.

The latest advertising spend report for the Victorian Government from 2017/18 saw spend of $105.7m in the lead up to Victoria’s November 2018 state election, which resulted in a Labor win and saw Daniel Andrews remain premier, a position he has held since 2014.

From 2008 to 2018, the state government has spent an average of $101.29m each year on advertising.

The Victorian Government’s yearly advertising spend. Source: Victorian Government [Click to enlarge]

Visit Victoria’s ad spend reached almost $11m, the Department of Health and Human Services $8.27m, and Work Safe Victoria $6.66m.

Those figures exclude GST, fees, and production costs.

For that period, the highest-spending departments and agencies for functional advertising were: Vic Roads, Public Transport Victoria, Melbourne Water, V/Line, Victorian Electoral Commission, Energy Safe Victoria, Melbourne Metro Rail Authority, Transport Accident Commission, Level Crossing Removal Authority and The Gordon TAFE.

Recruitment advertising, meanwhile, saw Corrections Victoria, Department of Health and Human Services, Department of Justice and Regulation, North East Link Authority and Victoria Police spend the most.

When broken down into channel spend, digital/ internet accounted for 29.9% of all Victorian Government advertising in 2017/18, a drop from the previous year’s 32%.

The state government’s 2017/18 spend by channel. Source: Victorian Government [Click to enlarge]

The biggest chunk of advertising spend in 2017/18  (67.3%) related to  public safety and behaviour change campaigns.

The government’s spend by priority in 2017/18. Source: Victorian Government [Click to enlarge]

Just last week, Mediacom’s holding group, WPP, reported a full-year loss, with headline earnings before interest and tax (EBIT) down 8.7% to $91.8m and net sales down 2.6% to $712.5m. Its statutory results showed a net loss of $227.57m. CEO Jens Monsees said local account losses had contributed to the result, which was in line with WPP’s previous market guidance.

A new ‘transformation strategy‘ – involving a fresh leadership model and ‘campuses’ grouped under one P&L in markets like Perth, Brisbane, and Adelaide – will return WPP AUNZ to market growth and leadership, Monsees promised.

This time last year, Mediacom retained the Queensland Government’s media account, extending a 15-year relationship.

“MediaCom is proud to have served as media services partner of record to the Victorian Government since 2017,” an agency spokesperson told Mumbrella of the tender.

“We have and will continue working to help the Government deliver on it’s objectives in building community engagement and enhancing service delivery. We are aware of the process and acknowledge that it is common commercial practise.”


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