In a statement to Marketing, MCI has confirmed that it will be adding about 15 more media agencies to its roster. This comes shortly after MCI appointed Gov@Publicis Media consortium led by Starcom Media Worldwide.
Claire Tan, director, National Marketing Office, MCI told Marketing that the agencies will be appointed to cater to the differing media buying needs and budgets of government agencies. While Marketing initially understood the account to be valued at SG$100 million, MCI later clarified this to be approximately SG$80million. Tan also explained that the aim of appointing a master media agency is “ultimately to generate savings through economies of scale and extract greater value for use of public funds”.
Tan added, “Aggregating advertising buys is a common practice adopted by governments elsewhere, including UK and Australia, and by some private companies too.”
“After a rigorous process that looked into the price competitiveness, media buying capabilities, and the proven track records of six tenderers for the media master agency , we have appointed the Gov@Publicis Media consortium led by Starcom Media Worldwide,” she said.
“We look forward to working closely with the appointed master media agency and various media industry partners. We hope to achieve better coordinated media buys so as to save taxpayers’ funds,” she added.
Ian Loon, managing director at Starcom Singapore said that the agency will be working closely with multiple government agencies and bodies. This will be in a bid to realise greater synergy, cost-efficiency, and impact on media buying for public communications in Singapore.
“Starcom is ready to embrace the challenge to collectively succeed with the right talent and scale from our Gov@Publicis Media consortium backed by Zenith, Performics and our Publicis Media Practices,” he added.
Explaining that the likely intent for the consolidation is to improve strategic coordination and cost efficiency, Ryan Lim, principal consultant and founding partner of QED Consulting, said that SG$80 million puts the government as a very “significant” media buyer in Singapore.
The appointment of a master agency will impact the market in the form of the agency landscape. According to Lim:
The media business is based on a thin margin model.
Agencies which initially derived revenues from government buys will now need to look for new businesses in the already competitive private sector. With more agencies encroaching the private sectors, this sees smaller local media players affected as part of the ripple effect, he added.
However, Lim said that the master agency move will also likely result in lesser competition which implies pricing pressures on local media players. This can result in revenue strains in a market that sees declining demand. Agencies will then begin bidding to pump more dollars into the businesses to be selected.
“The final effects and results of how things will truly pan out remains to be seen. However, one thing is certain. Change is afoot for the local media landscape,” Lim said.
Leela Nair, managing director at Ebiquity, said the benefits of the structure that MCI has undertaken would be the best practice media management as well as the streamlined pricing. In addition, there will be a better gauge of measurement, wider collaboration opportunities, cross learning potential, as well as greater accountability.
Whilst these benefits are impactful for media agencies in the industry, Nair added that through her experiences, there might be initial “teething” issues with the appointment of new media agencies. “However, with this new approach, MCI would be able to manage its media ecosystem and agencies and provide clarity, focus and productivity,” Nair said.