The Ingka Group, Ikea’s largest franchisee, has launched a global pitch for its media account. Current account holders iProspect (part of the Dentsu Group) and WPP Media are in danger of losing the contract.
Dentsu has been working for Ikea for 17 years, initially through Vizeum, which merged into iProspect in 2021. WPP has also been working with the brand for more than ten years, in Germany through EssenceMedia.com. The Ingka Group, which is conducting the pitch, is the largest Ikea franchisee. It accounts for approximately 87 percent of total Ikea sales and operates in 32 markets. Germany is one of the group’s core markets.
According to COMvergence, Ikea’s global media spending amounts to approximately US$1.04 billion, of which US$122 million is net spending in Germany. The Ingka Group confirmed the pitch to Campaign and stated that a Request for Proposal (RFP) has already been initiated.
“The retail landscape is changing rapidly – and so is the way people want to connect with us. We want to ensure we have the right capabilities to reach the many people where they are,” says a spokesperson for the Ingka Group.
Campaign UK first learned of the process in March when Ikea requested information from several media agencies as part of a “routine assessment of the global media landscape.” This preliminary stage of an RFP is also known in industry jargon as a Request for Information (RFI).
Ikea recently awarded its UK creative account to VCCP in June. The previous agency, Mother, which had worked with the brand for 16 years, declined to participate in the pitch. McCann, meanwhile, was appointed Ikea’s global creative agency in 2023 and steers the overarching strategic and creative direction for international markets. The account is managed through its Spanish office.
In Germany, the creative account has been held by Thjnk for many years; Thjnk has been wholly owned by WPP since 2017 and is now part of the Ogilvy network. The holding company thus handles Ikea’s creative work in Germany, as well as media relations – via EssenceMedia.com.
The media pitch comes at a time of economic uncertainty. The Ingka Group reported a 1.6 percent decline in retail sales to €39 billion for the 2024/25 fiscal year, despite a 1.6 percent increase in unit sales volume. Total global Ikea sales across all franchisees amounted to €44.6 billion, a decrease of one percent. Online sales accounted for 28 percent of total revenue. Ikea Germany maintained its €6 billion revenue mark in the 2024 fiscal year.
Renovating branches requires new approaches to media planning.
Ikea is present for the first time with a pop-up store at a German train station. Image: Ikea
In Germany, Ikea is currently restructuring its store network. At the end of June, Germany’s first compact store opened in Ingolstadt: approximately 2,950 square meters instead of the average 35,000, a curated selection, with everything else available to order digitally. In March, Ingka announced plans to open 20 such locations in Europe and North America within six months, including in France, Italy, Spain, Portugal, and Canada. These measures are part of a five-billion-euro investment program over three years. After the end of the current fiscal year, the company intends to evaluate the performance of the compact store formats.
The smallest step for now will take place on August 25th: a pop-up store of just over 50 square meters in Nuremberg’s main train station. This will be the first store at a Deutsche Bahn location. It will sell travel items, decorations, small home accessories, and plush toys. There will be no Swedish restaurant. The company has not yet announced how long the store will remain open.
This shifts the focus for media planning. Instead of a few furniture stores on the outskirts of the city, a dense network of smaller locations requires local targeting, footfall data, and integration with the online assortment, which allows the compact formats to compensate for their lack of shelf space. This is precisely the rationale behind the Ingka Group’s pitch: the right skills to reach people where they are.
