Nestlé’s massive media account is up for grabs

Nestlé’s multi-million dollar regional media planning and buying is up for grabs and incumbent agency Media Insight is up against rival Optimedia for the business.

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By  Tim Addington Published  May 29, 2005

Nestlé’s multi-million dollar regional media planning and buying is up for grabs. The food and consumer product giant has put its business out to pitch, following a worldwide review. Incumbent agency Media Insight is up against rival Optimedia, as it battles to retain the account it has held for over five years. Earlier this year, the Swiss-based company decided to consolidate its media accounts globally, within either the WPP or Publicis networks. Media Insight is allied to WPP, while Optimedia sits within the Publicis Groupe. Nestlé’s brands include household names such as KitKat, Smarties, Perrier, Nescafe, and Coffee Mate. Nestle had previously negotiated agency deals for individual countries and products, but decided to scrap the system and introduce a more streamlined approach. Raef Labaky, communications manager for Nestlé in the region, confirmed that a local review was taking place, but refused to provide further details. However, Campaign Middle East understands that the two contenders have been making their case this week, with a decision on which will take the account expected in the coming days. Both Media Insight and Optimedia refused to comment on the details of the Middle East pitch after Nestlé swore both agencies to secrecy. Industry observers believe Media Insight has the most to lose as a result of the review, predicting the end of the company should Nestlé decide to move its media planning and buying to Optimedia. “If Media Insight are not successful in retaining the Nestlé account, then it could be all over for them in the Middle East. It is a major account and any agency would be devastated to lose it, but Media Insight are much smaller than other media groups and they may not be able to withstand the hit,” said one agency source. Nestlé is thought to have the third largest advertising budget in the region, dishing out approximately US$55 million a year on media with television taking a significant share of the available cash. In what has been described as one of the most complex pitches in recent years, Nestlé worldwide asked the Publicis Groupe and WPP to generate a plan for its entire media planning and buying business. A statement from Nestlé, said: “The Nestlé Group, after conducting a review of its media operations across the top media markets, has decided to consolidate its entire media planning and buying with Publicis Groupe and WPP. The review involved media investment in all Nestlé brands, categories and Nestlé companies, as well as joint venture partner Cereal Partners Worldwide.” The move by Nestlé marks an increasing trend towards the global realignment of media accounts by blue chip firms. Last year HSBC Bank moved all of its marketing services throughout the world, including creative, media and PR, into a single network deal with WPP.

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