A proposal by independent media agencies to form a consortium to service the federal government's master media agency account has been rejected, AdNews can reveal.
The IMAA (Independent Media Agencies Australia) has been working with an Australian-owned third party management consultancy on a joint submission for the federal government's tender.
The proposal would see IMAA members have the chance to share servicing the $163 million account.
The IMAA is also arguing for 50% of the government's procurement to go to Australian-owned businesses.
The tender's requirements lock out most independent agencies. To take part, an agency has to have a Canberra office.
However, one of the largest indies, Atomic 212 ,made an earlier shortlist for the pitch, industry insiders say.
Now the final showdown is between two incumbent UM and Omnicom's PHD, AdNews can confirm.
The winner was supposed to start servicing the account July 1, but department of finance has now extended the decision until the end of September, a spokesperson for the Finance Department confirmed to AdNews.
"This process is still in the evaluation phase. The current arrangement has been extended to 30 September 2024 as detailed on AusTender," the spokesperson said.
Sam Buchanan CEO at IMAA said while the media tender is still ongoing it has not reached the point IMAA would like.
"However, we firmly believe that there is still an opportunity for the federal government - and state governments for that matter - to work with indies via a consortium master media arrangement," Buchanan told AdNews.
"This model would provide the government with the best of indie and holdco thinking, with a fresh, modern approach that meets the government's requirement to source 20% of its annual procurement from small and medium enterprises.
"We have actively engaged both state and federal governments on allowing independent agencies to have a fair go and, importantly, to keep profits in Australia.
"The federal government's own budget contained several measures to support small businesses amounting to more than $641 million."
Importantly, the Commonwealth Procurement Rules were updated to ‘increase significantly’ the small and medium business sourcing target, which will rise from 20% to 25% for contracts under $1 billion and from 35% to 40% for contracts below $20 million from 1st July.
Leadership at independent agencies often tell AdNews their biggest business challenge is just getting the chance to be in the pitch room.
Yet this does not appear to apply to master media contracts, Buchanan said.
“The Federal Government still has an opportunity to support Australian-owned businesses, however this tender appears to have been designed specifically for holdcos," Buchanan said.
"A tender that the Government rinses and repeats is not suitable for today – the market has changed, and the playing field has been levelled for the best diversity of thought, and to support multiple Australian businesses. There’s more than enough business for everyone
"The door is still open and we are ready to assist. Indie agencies would love to work with the federal government and we are waiting on their call."
Incumbent agency Universal McCann (UM) has held the account since 2002, with a pause when dentsu took over between 2014 and 2018.
The IMAA is also calling for a mandated, minimum 35% of the Queensland Government’s annual advertising spend by volume to go to Queensland independent media agencies.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.