Home merger hits top account

The flow-on effects of the imminent merger of Home Building Society Ltd and StateWest Credit Union Ltd have started to ripple through the service side of the state’s small financial services sector with the consolidation of two advertising accounts into one.

Marketforce has emerged the winner from this market change after fighting off a strong pitch from rival, JMG Marketing.

Marketforce handled the Home account during its successful re-branding over the past 4.5 years.

JMG currently manages the StateWest account, a brief it has developed over its 10-year association with the credit union.

Gatecrasher Advertising also pitched for the new account, estimated to be worth up to $4 million this financial year, making it a top-tier advertising account in the Western Australian market, where $3 million to $5 million accounts are typical of big financial services group advertising spends.

The merged account significantly alters the advertising landscape in the sector, notably JMG’s position as a player at the top end of financial services marketing in WA.

Marketforce CEO John Driscoll told WA Business News the combined entity would result in a business about the size of HBF.

“The starting point for the bid was our re-branding work with Home, which has seen Home emerge as one of the state’s most recognisable brands, and this is a unique situation for such an established business,” he said. “We believe our work with leading brands, plus our heavy investment in resources and services had a strong bearing on the outcome,” he said.

StateWest’s Greg Wall, who will be managing director of the new financial services entity, said the two businesses initially would be co-branded, but eventually there would be a new brand.

“It may be a combination of the existing brands, but in all probability there will be a new name, and the process is not likely to be completed until early next year,” Mr Wall said.

Advertising Federation of Australia’s Ken Painter told WA Business News it was unfortunate but understandable that two very active WA accounts had merged.

“You would hope that the advertising dollar would reflect the size of the new larger business, but it is natural that economies would be made,” Mr Painter said.    

JMG managing director Jim Murphy was disappointed with the outcome, and said he believed JMG could have done the job better than rival agencies. 

“However, it was a fair contest, and we will now look at some new opportunities in the local market,” he said. “Our pitch was based on creating a WA bank that was a little different from the majors, and making sure members and customers were happy with the changes associated with the merged organisation.”

Mr Murphy conceded that the in-house capacity and resources of Marketforce may have weighed in the larger rival’s favour.

Industry sources estimate Market-force’s annual billings to be in the order of $155 million, compared with JMG billings of less than $10 million.

For its part, JMG places a particular focus on below-the-line marketing activities, rather than pursuing media dollars.