-Australia's largest ad agency, George Patterson Bates, was dealt a critical blow on 15 September when telecommunications company Optus dumped the agency from an estimated $40 million worth of business following a whirlwind review.
The agency's six-year grip on the lucrative account was broken when Optus appointed the Campaign Palace, Sydney, to handle its $30 million brand advertising business and Leo Burnett Connaghan & May to handle its growing Internet and multimedia division, an account expected to be worth up to $10 million.
GPB has been left with retail advertising for the Optus World stores, direct marketing, point of sale and promotional advertising, collectively worth an estimated $20 million.
It will also continue to develop Optus' media strategy, while media buying will remain with Zenith Media. An Optus spokesman said yesterday it was hoped the Palace and GPB, both owned by Bates' Australian subsidiary, The Communications Group, would work closely in the future development of the brand.
However, while the agencies share the same holding company, they have little else in common in terms of culture or shared resources and are recognized as competitive rivals throughout adland.
The dramatic changes have been brought about by the recent arrival of Paul Donovan, who joined Optus on 1 July as chief commercial officer. "He saw a very fragmented communications programme that demonstrated to him that Optus had lost its way in a communications sense and wasn't tapping into the hearts and minds of consumers," said one insider involved in the review.