What you need to know:

• BMF boss Stephen McArdle says the Federal government’s overhaul of comms procurement is paying off.
• Fed work has slowed after covid-driven comms powered record spend and resultant bumper result for BMF, but McArdle says broader demand high for ‘brand resilience’ work as consumer belts tighten.
• Not too concerned by consultancies touting creative prowess. “It still doesn’t feel like they have managed to connect all the pieces.”

Aldi’s outgoing CMO Mark Richardson has laid the credit squarely at BMF’s door for powering the brand in Australia. Brent Scrimshaw, CEO of ASX listed BMF parent, Enero, said the ad agency was a prime mover in driving bumper revenues and earnings after the agency posted its best ever annual result.

BMF CEO Stephen McArdle wouldn’t disclose the numbers – he said the ASX-listed holdco doesn’t break out individual agency revenues. But he claimed BMF has accrued “forty per cent top and bottom line growth” over the last three years and that “the momentum continues” as marketers rethink brand and performance ratios in order to move the needle.

Covid anomaly

The growth isn’t all down to Federal government covid work, per McArdle – who suggests the Fed’s new village structure – billed as the biggest government advertising and comms procurement shake-up in 30 years – is delivering sharper, less formulaic or ‘researchy’ ads.

“It’s a real step forward because prior to that, [government] work was all very ad hoc. As an agency you were brought in at the end of the process. It was very research-driven in terms of the results that were pitched. So it delivered a certain kind of work.”

Under the new structure, agencies collaborate on strategy and go in with multiple ideas, “instead of a creative shoot out at the end” with everything riding on one idea as rival agencies fought to land every campaign.

“Under the old process … you had a sense of what was going to communicate very clearly and therefore probably test pretty well in research. So we would pitch that one idea, versus probably a couple of ideas on the table we'd love to have made – and may have felt that in the real world could be stronger – but in a research environment might not tick all the boxes,” said McArdle. “Fair play to the government, they recognised that and came up with a better approach.”

The upshot is arguably more varied and more effective work. For agencies, not having to pitch for each campaign means less wasted time and resource – and less burnout for teams constantly selling the sizzle.

Throttle back

The Albanese government is preparing spending cuts on services including advertising after record spending by federal and state governments in 2021, driven largely by coronavirus comms – but McArdle is circumspect.

“We wouldn’t want to go through covid again,” he says, with the volume of work from 2021/22 throttled back. “It won’t be to that same kind of scale, but it will be different,” per McArdle, citing referendum work for the Australian Electoral Commission and a “healthy pipeline” of projects via the village set up.

Creative accountants

Should any gaps appear, said McArdle, BMF will gladly take them given renewed market focus on effective brand work amid rising performance costs and arguably diminishing returns – and a push by consultancies led by Accenture and Deloitte to harness creativity to drive growth. Though in that sense, he argued the consultancies have not yet managed to blend oil and vinegar.

“We do end up pitching against The Monkeys quite a lot. But I’m not aware of pitching against Deloitte Digital,” he said, though the latter to date is not renowned for pitching for campaign work.

“But culturally, how do you make that [consultancy-ad agency] thing work? I think that is why Accenture Song and The Monkeys are still largely operating as different entities," said McArdle, despite plans by the consultancy's marketing services arm to kill off individual agency brands.

"The consultancies are buying very creatively-driven agencies and they have been for the last five or ten years. But it still doesn't feel like they have managed to connect all the pieces. If they do, it might be scary. But for now…”

Effectiveness crunch

While economic headwinds have slowed some decision-making, McArdle said marketers are focusing on “brand resilience”.

“It’s a nuance of language [versus brand building] but marketers recognise that brand resilience in a world that will be tough for a lot of businesses is going to be critical. So there is definitely an appetite for doing more creatively-driven brand work.”

Meanwhile, McArdle said the agency’s work is now split 60:40 brand versus CX and direct, social and performance marketing, which provides a hedge – and he argues the performance aspect can be fundamental to delivering creative effectiveness.

“Over the last three to four years, those [non-brand services] are the areas that have grown the most [within BMF] … But brand building and creative are always in the service of something – and that is to deliver on the numbers for a business. So if it's not effective, well …  what's the point?”