Maxed out

One of the world's largest credit card companies, American Express, has moved its creative account out of WPP and into Dentsu, ending a 30-year relationship with the holding group locally.

Part of a global pitch, American Express confirmed the decision will impact Australia directly, with the account to shift from WPP's Ogilvy into the newly formed Dentsumcgarrybowen, fronted by BWM Dentsu locally.

Dentsu declined to comment on the move, however, the transition is expected to be made by the start of 2021. The win will compensate for the loss of the Kmart account in June this year when it was consolidated into DDB Sydney (which handles sister brand Coles).

Amex has been consolidating its creative accounts since 2017, when much of its brand work was handed to Dentsumcgarrybowen without a formal review.

It is thought the move could impact up to 15-20 people across the account within Ogilvy locally, though WPP declined to comment. 

WPP's media agency Mindshare held Amex's media account or 20 years until 2018, when IPG Mediabrands agency UM won the business following a global pitch.

Consolidation appears to be a deepening trend locally and internationally.

Last week Westpac moved all of its media buying and planning into Publicis, ending a long-term arrangement with WPP's Wavemaker bespoke unit, Media Lab.

Greg Paull, of international pitch consultancy R3, thinks more brands will move away from long-term relationships as project work and short-term pitching cycles boom.

“Brands are now on a cycle of three to five years with their agencies, primarily due to the contractual set-up they have," Paull previously told Mi3.

“That’s what the ‘new normal’ really is: brands testing the market so they can establish a baseline for the next three to five years. A brand may keep the incumbent, sure, but they also learn what other options exist.”

Less brand work, lower spend

Amex brand boss Naysla Edwards recently told Mi3 about the brand's decision to slash the number of annual ad campaigns from eight to two, as Covid limited the number of messages appropriate in market.

The credit card business has had a large amount of autonomy in its creative strategy in Australia, launching the SME-driven 'Shop Small' campaign, which has become a major focus for the brand throughout in recent year and took a lion's share of the investment throughout Covid.

Edwards said Amex saw a 60% increase in its card members’ spending following the Q1 2020 Shop Small campaign, with a 20% residual uplift after the campaign ended. 

It also recorded 26% increase in the total transactions made by card members during the campaign’s run, with 8% residual uplift post-campaign.

“We’re a brand that focuses heavily on small to medium businesses in Australia and we know that requires localisation in our media spend and channels,” Edwards says.

“Radio and outdoor act as strong audience reach platforms for us to engage with those SMEs and relevant consumers, both in metro and regional areas.”

However, the option to limit the number of campaigns it runs annual has seen the brand's traditional media spend decline significantly.

According to Nielsen AdIntel , which does not record the amount of digital media spend by brands, American Express had an estimated main media spend for January - September 2020 of $2.9m.

That is almost $4m lower than its main media spend for same period in 2019 which was $6.8m, while its full-year spend was $8.8m.

Edwards explained to Mi3 that the brand had been shifting a large amount of its traditional budget into digital media, in a bid to better understand the benefits of hyper and geo-targeting.

“We used a lot of above the line this year, but we also attempted a new strategy when it came to hypertargeting,” Edwards says. That initially involved use of actual photos of the businesses with whom Amex was encouraging customers to spend with as part of 'Shop Small'.

Edwards says there were initial issues with the strategy as some of the businesses appearing in feeds weren’t resonating due to geo-targeting problems and a lack of visual recognition.

“Immediately we realised that there was an issue, and it was down to the imagery we were using, such as in-store or shopfront pictures. The shops featured in some areas weren’t distinguishable or didn’t work well within the basic structure of the creative," Edwards says.

“This is where being hyperlocal can be tricky, so we moved quickly back to generic imagery, but kept the name and location of the original business."