Dentsu Mitchell will continue business as usual irrespective of whether it retains or loses the Federal Government account, its largest client, according to Dentsu Aegis Network ANZ chief executive Simon Ryan.
AdNews first revealed the Federal Government had begun its master media agency review process in September by releasing a draft MMA deed. This was followed up with the start of the official tender notice period last week.
Dentsu Mitchell is defending the account, which ran up $175 million in billings last fiscal year, and will be determined to retain the business after recently losing the $80 million Victorian Government account to MediaCom.
Ryan, who was speaking to AdNews more broadly about DAN's acquisition strategy, dismissed any notions that losing the account could have a detrimental effect on Dentsu Mitchell's ongoing viability.
When asked if the federal government pitch was 'do or die' for the agency, Ryan responded, “No, it would continue as normal”.
“It's still quite a big business...it turns over half a billion [in billings]," Ryan explained. "I think the Victorian government tender was unfortunate, but we had it for eleven years and, for whatever reason, they had to make a decision. I think it's very hard to hold on to a government piece of business for that long.
“On the Fed side, we go through a process. We're working very well with them, they're actually pretty happy, but it's something that they need to do.”
Ryan said Dentsu Mitchell employs around 40 people in Canberra to service the federal government account and a further 130 staff in Melbourne. It has several other clients on its books, including UNIQLO, The Good Guys, Carpet Call, Cash Converters and more.
At present, the agency is on the hunt for a new leader after national managing partner Adrian Roeling left the post to become president of media investment arm Amplifi.
Whether DAN replaces Roeling before the federal government pitch has been finalised remains to be seen given the size and importance of that account on the agency.
Dentsu Mitchell will have plenty of competition for the federal government business. By billings it is Australia's largest media account and is likely to draw interest from each major holding group.
The MMA has strict provisions around transparency, brand safety and a remuneration model that includes a retainer to cover staff and technology costs and performance-based incentives if profit targets are met. Making money on government accounts is notoriously difficult but there is a certain amount of prestige attached to holding them.
Check out AdNews' extensive coverage of the MMA and its provisions.
A full discussion with Ryan about the Dentsu Aegis Network strategy will be published later this week.
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