American Express has shifted its global media account to IPG's UM, moving away from GroupM's Mindshare which has held the account for more than 20 years.
UM will handle all planning and buying work globally, including Australia, while partnering with Amex's creative agencies to promote its “Powerful Backing” brand platform around the world.
It's a big loss for Mindshare in Australia, with Amex spending $18 million on media between Jan-Dec 2017, according to figures provided by Nielsen.
AdNews understands Mindshare staff were briefed on the account shift this morning.
The last time the business reviewed was 13 years ago with Mindshare holding off challenges from Carat and Initiative.
Mindshare has held the account globally for about 20 years, originally winning the media from Amex's longstanding partner Ogilvy - who back then had both media and creative.
The move marks the end of a global review, which was revealed in May this year and included Omnicom and Dentsu.
It comes as another blow to WPP, the parent company of Mindshare, with news that Ford and GSK would move its global creative business away from the holding company and to BBDO. Mindshare retains the Ford media business.
“I am energised and excited to work with Universal McCann to help us drive our business forward,” said Elizabeth Rutledge, who became American Express global chief marketing officer in February.
“Our goal was to select the best talent and leverage the best agency partner around the world to help us elevate our brand, deepen relationships with our customers and prospects and drive greater marketing efficiency and effectiveness across our business.”
“We selected UM because we were impressed with their capabilities across media, technology and data and insights, as well as their commitment to building teams with diverse experiences and diverse perspectives.”
Earlier this year, Amex rolled out a new brand platform and ad, which was developed by US creative agency McGarryBowen and localised in this market via Ogilvy and Mindshare.
GroupM declined to comment. UM has been approached for comment.
The bigger picture
In the last 18 months, Australian media and creative agencies have suffered from account moves as a result of global alignments in which this market, being a tiny slice of the pie, is given little consideration.
Just this week, Dentsu won the global Intel business and BBDO won the global Ford account from WPP. Looking back at the last year, there has been global decisions made on huge accounts such as Adidas, Mondelez, Hyundai, Shell, CUB, GSK, Mercedes and more.
Depending on the beneficiary of the global review, they are often described as a "free kick" or a "devastating loss" and some say they often come down to what the global network can offer on price.
However, with Australian being such a small market to global holding companies, when global pitches are decided on price, it often means agencies in this market are left with a margin that can't sustain a profitable business. The small margin may work for a market like America or the UK, where the sheer amount of work can validate the margin, but some argue Australia is often left with the short straw.
Are global pitches creating an unsustainable market in Australia? Email me on lindsaybennett@yaffa.com.au
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