Fonterra reviewing local media account, MediaCom hoping to replicate Asian success—UPDATED

  • Media
  • December 3, 2013
  • Ben Fahy
Fonterra reviewing local media account, MediaCom hoping to replicate Asian success—UPDATED

Fonterra is putting its media account up for pitch in New Zealand, with incumbent OMD and MediaCom thought to be battling it out for the spoils.

Fonterra Brands' marketing director Craig Irwin and OMD’s managing partner Andrew Reinholds were unable to be contacted. And MediaCom’s managing director Nigel Douglas was a firm no comment when asked about the pitch. But a source familiar with the account says the decision to put the business up for pitch was procurement-based and driven out of Asia in an effort to save costs through alignment, not because anyone’s done a bad job. 

UPDATE: In a statement, Irwin said: "We regularly review our partnership arrangements and are currently reviewing our media agency requirements in New Zealand."

MediaCom won Fonterra’s $150 million media planning and buying business across ten markets in the Asia Pacific and Middle East after a five month review earlier this year, taking the business off incumbent OMD. And while OMD will obviously be keen to hold on to the business in these parts (as of mid 2012, Australia and New Zealand accounted for 22 percent of Fonterra's revenue, while Asia accounted for about 40 percent), like many big multinationals and many FMCG clients—which have generally been decreasing their marketing bugets over the past few years—there isn’t thought to be much of a margin in it for the agency and there isn't much strategy work to be done. So the source says losing it wouldn't be as bad as losing a bank, a telco or a consumer electronics brand. 

Fonterra is one of the few New Zealand companies that has a high volume, low margin business model (although in these days of media commoditisation the same could possibly be said for some media agencies). But it is trying to increase the performance of its brands, which contributed about 55 percent of its total earnings and offer much higher profit than ingredients.

However, Nielsen's AIS figures, which are based on ratecard value, show Fonterra Brands has decreased its spend considerably in this market in the past few years, down from $31.4 million in 2010/2011 to $20 million in 2012-2013. 

Grand Total

MAT (1/11/2012 - 31/10/2013)

MAT-1 (1/11/2011 - 31/10/2012)

MAT-2 (1/11/2010 - 31/10/2011)

Grand Total

70,450,076

19,891,051

19,084,148

31,474,877

Source: Nielsen Advertising Information Services

Fonterra launched a corporate video explaining its story a few months back (right in the middle of the botulism fiasco). And it's also spent a fair amount on the roll-out of its Milk in Schools scheme this year. 

  • This story originally stated the Australasian business was up for pitch, but the review is for New Zealand only. 

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

A perfect match: The importance of quality content and conversation in influencer marketing

  • Marketing
  • March 30, 2017
  • Erin McKenzie
A perfect match: The importance of quality content and conversation in influencer marketing

Using an influencer is nothing new in advertising. But in the past few years, the definition of the role has expanded to YouTubers, Instagrammers, bloggers and vloggers, and brands have been jumping on the bandwagon to be mentioned in newsfeeds. However, with the online space comes a new set of challenges from selecting an influencer to measuring results. We chat to Fuse content and brand experience director Holly Lindsey about choosing the right influencer for the brand, understanding the grey areas and generating organic engagement.

Read more
Next page
Results for
Topics
Jobs
About

StopPress provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise

Contact Vernene Medcalf at +64 21 628 200 to advertise in StopPress.

View Media Kit