Telstra ends 22 year relationship with DDB Australia

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MELBOURNE -- Telstra, Australia's major telecommunications company, has dumped DDB from its $80m-plus account agency roster after an exhaustive review, saying the agency is "too traditional". The decision ends a 22-year relationship.

At least 30 agencies pitched, with previous incumbents Clemenger BBDO and John Bevins, as well as DDB, missing the short list.

Incumbent Mojo Partners is the big winner, picking up about $50m by becoming the lead agency responsible for brand strategy. Mojo's offshoot, True North Media, gets all media planning and buying, previously handled by DDB. Mojo director Ric Otton will supervise the account.

Three other local agencies are on the new roster: Batey Kazoo, and incumbents Pure Creative/DMB&B and John Singleton Advertising.

With deregulation of the telephony industry from July 1, Telstra says it is experimenting with a new approach and will allocate agency work based upon customer segments. It has set up an internal division to mirror and monitor agency work, including account service, creative, legal and technical resources.

The loss is a another blow to DDB, Australia's third largest agency, which had an income of about $50m from billings of $320m last year. In the past six months it has seen McDonald's Australia, which it once serviced exclusively, add M&C Saatchi to its roster, and it has lost a number of other significant accounts including Foxtel, a national pay-TV network owned jointly by Rupert Murdoch and Telstra.

Copyright May 1997, Crain Communications Inc.

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