Optus moves $40m business from George Patterson Bates

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SYDNEY -- Australia's largest ad agency, George Patterson Bates, was dealt a critical blow September 15 when telecommunications company Optus dumped the agency from an estimated $40 million worth of business following a whirlwind review.

Patts' 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.

Patts 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.

Patts 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 Patts, 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.

Insiders also tipped that Patts could lose more Optus business to either The Palace or LBC&M as both agencies are hungry for a greater slice of the account.

The dramatic changes have been brought about by the recent arrival of Paul Donovan, who joined Optus July 1 as chief commercial officer. "He saw a very fragmented communications program 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, who asked to remain unidentified.

Mr. Donovan joined Optus from Britain's Cable & Wireless mobile phone division One to One. Cable & Wireless' 49.1% stake in Optus makes it the company's largest shareholder. An Optus spokesman confirmed the changes and added the company was looking for "new creative input" in its advertising but denied it meant dumping the "Yes" campaign.

"We think the creativity that The Campaign Palace will bring will ad new excitement to the Optus brand," the spokesman said, denying speculation the move also heralded a brand name change for Optus to reflect the Cable & Wireless relationship. "I can't say what will happen in 10 years time but there are no plans to change the brand. Optus is a strong brand. However we will be using our link with Cable & Wireless more in dealing with the government and corporate sector."

The spokesman also confirmed that Max Suitch, who became marketing director in December, had left the company. He said Mr. Suitch was only employed as a consultant and that "he set some goals to achieve and met them." Stephen Cameron has been appointed marketing director for Optus, taking up the position on October 4.

Copyright September 1998, Crain Communications Inc.

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