From September, the major supermarkets will change their advertising agencies. Photo / Getty Images
From September, the major supermarkets will change their advertising agencies. Photo / Getty Images
Supermarket operators Foodstuffs and Countdown have switched advertising agencies in a huge shake-up for the marketing industry.
Foodstuffs, the operator of Pak'nSave, New World and Four Square supermarkets, among others, has switched from advertising agency FCB New Zealand to PHD Media, while rival supermarket chain Countdown has switched from StanleySt (previously known as Ogilvy) to Carat.
FCB had been the driving force behind one of the most successful supermarket marketing campaigns to date, Pak'nSave's Stickman, and will remain the creative agency for the Pak'nSave and Four Square brands.
The changes are understood to have given Omnicom Media Group a more than 50 per cent share of the advertising market - a huge concentration of advertising money and power.
In May, Foodstuffs moved its creative account for New World to DDB, part of the Omnicom stable of agencies.
From September, Auckland-based PHD Media will be handling all media requirements for Foodstuffs brands.
The same applies to Countdown's switch to multinational agency Carat.
According to Nielsen's advertising spend data, New World spent more on advertising in 2019 than Pak'nSave or Countdown. The figures show New World spent $62 million to the $51m spent by Countdown and the $23m by Pak'nSave. In the previous two years, New World was outspent by Countdown.
Foodstuffs group general manager of marketing and customer experience Dominic Quin said FCB and PHD Media went "head to head in a tightly contested battle for the account".
Ad_Spend
"Moving media agencies was a big decision and one which we didn't make lightly. The FCB team will continue to be our creative agency for Pak'nSave and we look forward to continued collaboration which delivers innovative, edgy and occasionally eyebrow raising creative work for Stickman and the Pak'nSave brand," Quin said.
"PHD Media successfully won the Foodstuffs business because they demonstrated strong strategic capabilities alongside an ability to integrate their data, planning and campaign management platforms into Foodstuffs' new operating model.
"PHD Media has a strong grasp of what we are trying to achieve and offer great talent, innovative thinking, strong in-house capability, advanced tools and systems, and world-class purchasing power as part of the Omnicom Media Group."
The Herald has contacted FCB for comment.
Foodstuffs recently moved its creative account from 99 - part of the Clemenger Group - to DDB, part of the Omnicom Group.
In a statement, PHD Media chief executive Nikki Grafton said PHD was thrilled to be Foodstuffs new advertising agency.
"New World, Pak'nSave and Four Square are iconic brands, each presents its own unique challenges and opportunities and the team can't wait to start contributing to the success of these incredible brands. We want to create a collaborative partnership with Foodstuffs, one which is designed to perfectly position each of the retail brands to excel and deliver for their customers into the future."
Asked if PHD would be targeting any FCB creatives as a result of the change of account, Grafton said it would be recruiting for some roles.
Progressive move
Countdown, owned by Australia's Progressive Enterprises, confirmed to the Herald on Thursday it would also change media services agencies in September, while its creative agency Greenhouse would remain with account.
"Kiwis are communicating with businesses in completely different ways than they used to, and it's important to use that we keep pushing ourselves to stay relevant and interesting for our customers no matter how they want to engage with us," Countdown general manager of brand and digital Sally Copland said.
"Stanley St (and before them Ogilvy) has played a critical role in supplying media services to our business for over 20 years, and I'm proud to have achieved a huge amount together over this time.
"Carat have proven expertise across the media landscape, but are also widely respected for their collaborative approach and talented team. We're looking forward to bringing these skills to our Countdown business together with our creative agency Greenhouse NZ."
Robert Harvey, chief executive of Dentsu Aegis, the owner of Carat, said: "We are thrilled to be given the opportunity to partner with the team at Countdown. Countdown are an iconic business that is interwoven into communities across New Zealand, and we feel privileged to be working with them to continue building their great brand.
"Now more than ever, customers have higher expectations from retailers and we are really excited about Countdown's commitment to innovation in media to drive more positive customer outcomes, and accelerate the growth of their business in the digital economy."
Stanley St had held Countdown's media account since 1997. Four years ago, the creative part of the account left the agency. It had since been in charge of its media-buying services.
Andrew Reinholds, media boss at Stanley St, said losing the remaining part of the account was a shame and it was "disappointed".
"[Countdown] has been a big part of the agency for a long time, but we understand it was a business decision," Reinholds told the Herald.
He could not comment on whether there would be any job cuts at the agency as a result.
Headcount reduction at both FCB and Stanley St are likely - this often happens when major accounts are lost.
"We need to go through a formal review to understand the impact and what that means for the agency moving forward," Reinholds said.
Stanley St also works with Briscoe Group, Tourism New Zealand and Kimberly-Clark, among others.
