A first-of-its-kind contract for government ad spending has been awarded to media agency Starcom.
The authorities had consolidated a chunk of the money it spends on marketing in a year into a single contract earlier this year.
Estimated to be valued at $80 million, the contract was won by Starcom Media Worldwide, which beat five other bidders to be the Government’s master media agency, a Ministry of Communications and Information (MCI) spokesman said yesterday.
A subsidiary of communications giant Publicis, Starcom has been tasked to take charge of the buying of a major portion of ads put out by ministries, agencies and organs of state, as well as the National University of Singapore and Nanyang Technological University.
The firm was selected after taking into consideration its price competitiveness, media buying capabilities and track record, said the MCI spokesman.
In appointing the master media agency – which is a first for the Singapore Government, but a common practice in countries such as Britain and Australia – the authorities here expect to “generate savings through economies of scale and extract greater value for use of public funds”.
As part of the tender, the Government also appointed a panel of 15 agencies to manage general media buys for differing needs and budgets for the entire government.
In total, 26 companies bid for the master media agency contract as well as the chance to be on the panel. These firms included known media agencies such as IPG Mediabrands and Havas Media, and more unusual entrants such as Singapore Press Holdings and Singtel, reported trade publication Marketing Interactive.
Mr Ryan Lim, principal consultant for marketing strategy firm QED Consulting, said having a master agency would help the Government to better coordinate its communication efforts.
But he noted a contract of this size would also affect the bottom line of other agencies here.
“Agency business is based on very thin margins, so those dependent on government contracts will be heavily impacted,” he said. “When there are no significant government contracts up for grabs, these global agencies are likely to turn to other contracts that local firms normally compete on for survival.”
According to this year’s Budget, the Government spent $275 million on public relations and communications in 2016 and $296 million last year. It has allocated $339 million for the current financial year.
Its communications strategy has evolved in recent years, with the roll-out of eye-catching infographics, viral videos and, more recently, the use of social media influencers.
This article originally appeared in The Straits Times. See more here.