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Virgin Australia reins in agency budgets and adds in-house creative

Virgin Australia is cutting its ad agency budgets and has brought the bulk of creative in-house as part of a major cost cutting exercise, Mumbrella can reveal.

With former Telstra marketer Inese Kingsmill starting as the new head of marketing and customer engagement on December 12, Mumbrella has learned the airline has appointed an in-house executive creative director on a contract basis.

The airline has launched a drive to find $300m in savings by 2019, with marketing agencies understood to have already seen a radical reduction in spending in recent months.

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Virgin’s agency roster includes Clemenger BBDO Sydney, Hulsbosch, Carat and Designteam.

Sources close to the airline said that more work was being overseen and created by in-house resources, while some retainers have been dropped in favour of work being paid on a project basis.

Michael Dole, the former executive creative director and founder of Scentre’s dedicated WPP agency for Westfield, Sibling, joined Virgin Australia as ECD in July on a contract basis.

The ECD’s experience running campaigns from an in-house perspective was believed to be crucial to his appointment.

Dole also has a track record with the airline having worked on the business while the head of art at Clemenger BBDO in Sydney and he has worked on a collection of campaigns for big Australian brands ranging from Westpac and V Energy to Foxtel and Toyota.

Dole was behind the “Bound By Colours” ad which Virgin aired during the AFL Grand Final in October.

In his address to the Virgin Australia AGM last month, CEO John Borghetti said that the “Better Business” program was already delivering savings across a range of suppliers which Mumbrella has confirmed include marketing agencies.

“We have continued to drive a reduction of costs and created efficiencies in major contracts,” Borghetti said.

“We have made significant progress in organisational rightsizing from the top down.”

Virgin Australia declined to comment about the changes to its marketing agency spending or the move of part of its creative in-house.

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