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Genesis Energy powers up for a pitch

Genesis Energy has put out an RFP for advertising and media buying services and, given Nielsen AIS figures show it’s the biggest spender in the electricity sector, with ratecard spend of $4.4 million in the past 12 months, there will presumably be plenty of interest from the major players. 

When we called Genesis Energy’s public affairs manager Richard Gordon and asked if a pitch was on the horizon he initially said “that may or may not be true, I cannot confirm or deny”. But he eventually did confirm an RFP was being prepared (we believe it’s a bit more than prepared and has been sent out already. Unlike full-blown government departments, state-owned enterprises like power companies or part-state-owned enterprises like Air New Zealand don’t need to go through the government tender process). UPDATE: Gordon says it was sent out on Friday to a list of selected agencies, but it couldn’t name the agencies. 

Nielsen AIS ratecard data for electricity sector ($). 

    Last 12 months Year Ago
    1/08/2011 – 31/07/2012 1/08/2010 – 31/07/2011
Genesis Energy 1 4,408,317 3,608,958
Contact Energy 2 3,087,013 1,615,572
Mercury Energy 3 2,903,922 272,735
Meridian Energy 4 2,096,338 2,862,114
Energy
Efficiency&Conservation
5 1,837,539 1,391,180
Auckland Energy Consumer Trust 6 635,897 472,412
Powershop 7 509,284 502,120
Ministry Of Consumer Affairs 8 316,327 41,664
Trustpower 9 229,229 352,627
On Gas 10 219,524 23,524

He says the decision has nothing to do with the mixed-ownership model and the ensuing partial sell-down of state assets. 

“We’ve been with the same agency [DraftFCB] for a few years and it was time to review the existing advertising and media buying services.”

We couldn’t get hold of anyone at DraftFCB, but Gordon confirmed it had been invited to pitch and it will presumably be putting up a fight for the business. The New Zealand arm is on a pretty impressive winning streak at the moment and there’s certainly been more good news than bad of late, with Vodafone and Air New Zealand on the books. But Australasian chairman Bryan Crawford and Australasian executive creative director James Mok have had to deal with some fairly unwelcome news recently after the closure of the Melbourne office following its loss of the Honda account. 

As for the other potential suitors, it’s not clear who’s been invited, but let the postulations begin: DDB, Saatchi & Saatchi and Ogilvy don’t have a power company on their books, so they should be keen. Colenso BBDO has Vector, but it’s further down the spend list, and Y&R also looks to be on an upwards trajectory and is hunting for business. Then there’s the possibility of splitting the account up and giving it to a group of partnering specialists/smaller agencies (it’s thought direct/digital is also part of the RFP).

http://www.youtube.com/watch?v=dykrPi9P_AkWe’ve heard a few mutterings that this decision smacks of a client that may be feeling slightly unloved after its agency battles to get work out the door for its big, shiny new friends. But there doesn’t appear to be a problem with the work, with recent Colmar Brunton research putting the Hope ad at number six on the list of August’s top ads and, further back, Pooky being named as a top five favourite ad in the Fair Go Best Ad Awards in both 2007 and 2008. As it says on the DraftFCB website, “not only were the TVCs seen as highly engaging with high cut-through versus spend, residential customers’ confidence increased markedly on ‘can provide energy for NZ in the future’, ‘uses many sources to generate power’, ‘is helping me respond to climate change and actively make a difference’ and ‘is a socially responsible company’.” It’s a good campaign, but it has been running for quite a long time now so, perhaps like the avian version of Goldstein, the end is nigh for Pooky and co.

Others we’ve spoken to disagree with Gordon’s assertion and believe the decision is based primarily on the mixed ownership model and the company’s desire to find efficiencies across the business, including with agency partners, so it can spend less, improve the value of the brand and get the best price when it’s on the block. 

As for the company itself, 2012 has been a pretty good year for Genesis, with net profit after tax of $90.25 million, compared to a net loss after tax of $16.6 million in 2010/2011 (it purchased the Tekapo hydro station from Meridian, which clocked after tax profit of $74.6 million this year, 75 percent down on the year before). Genesis Energy’s revenues also increased 24 percent from $1,834 million to $2,270 million. 

“Higher generation volumes, higher wholesale electricity prices and higher gas sales in both the retail and wholesale markets supported the revenue increase,” said a release.  

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