Woolworths looks at paying ‘compensation’ to agencies in $240m media pitch

woolworths logoWoolworths is understood to be looking at paying agencies involved in its prolonged pitch for its $240m media account compensation, fuelling speculation it is set to stay with Carat on a revised year-long deal.

The pitch, which remains unresolved, has now been through four stages with a final shortlist consisting of incumbent Carat against rival OMD and MediaCom, with independents Match Media and Bohemia thought to be on a secondary list of smaller support agencies.

Mumbrella understands the retailer is considering paying the agencies involved for the hundreds of man hours involved in the challenging process, which was meant to be resolved by Easter, following the appointment of former Coles executive Tony Phillips as its chief marketing officer in March when the pitch was already underway.

Phillips has responsibility for supermarket, which represents more than 50 per cent of the business.

The original pitch had been expected to conclude not long after Easter, but became protracted following the appointment of Phillips, with some agencies thought to have spent hundreds of thousands of dollars vying for media account, which is one of the largest in Australia.

Sources have told Mumbrella that while the amount of compensation was still undecided the retailer would take the unusual step of reimbursing agencies for part of the costs involved in the extended pitch.

Companies being unwilling to pay agencies for their time in pitches is a sore point across the industry, with agencies regularly spending tens of thousands of dollars to compete for accounts they do not win.

The pitch has also been the subject of intense media speculation with the retailer last month denying industry rumours that the terms of its media pitch would be changed from a three year contract to a one year contract.

The media agency review is still being run by Helen Lecopoulos who moved from McDonalds to Woolworths back in November.

At the time of posting Woolworths had not responded to requests for comment.

Nic Christensen 


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