Telecom has made a radical shift in the way it buys advertising in the media.
New Zealand's biggest advertiser spends about $25 million, an advertising industry source said, though the exact figure could not be verified at print time.
Telecom chief marketing officer Jason Paris confirmed last night that the company had dropped its media buying agency Starcom, ending a media buying arrangement dating back to the launch of Telecom in 1987 through associated firm Saatchi & Saatchi.
Saatchi & Saatchi will continue to have a role making commercials for the company.
Telecom has formed a new agency along with the DDB Group, where it will be the sole client, using the arrangement to build strategies to target customers in digital campaigns.
Advertising industry sources said that the new agency, called Dynamo, would give Telecom a lot of leverage dealing with media companies and as sole client would give it more direct buying power.
The change is effective from March 31.
The change is a major blow to Starcom. Chief executive Alistair Jamison said Starcom learned it was losing its biggest account on Monday but account wins recently meant staffing levels would not be badly hit.
Advertising veteran David Walden of Whybin TBWA said it was a significant development in the advertising and media industry and a major win for DDB Group.