marklives.com

King James – the road less travelled

Date posted: April 15, 2012

King James Group logo ?>

by Herman Manson (@marklives) Fourteen years after its launch King James has emerged as South Africa’s most acclaimed independent ad agency. Growing organically, the agency has finally reached a tipping point to boost confidence, influence and revenues, even as it steers the challenges of offering a fully integrated, digitally adept service.

James Barty scribbled the budget for the start-up agency he was planning with Alistair King on a piece of yellow paper. Yellow Ogilvy paper to be precise. At the time Barty and King were the two young guns on the board of Ogilvy & Mather, Rightford SearleTripp & Makin (O&MRS-T&M), in the days when agency names sounded like they could belong to law firms, a chamber of egos, and equally ridiculous. It was the end of 1997. The budget showed the duo would need cash flow of R57 850 a month to get the agency off the ground.

“We’ve only found our stride in the past four years,” says King. “It’s taken us 14 years to gather the clients we wanted and needed to create the level of high profile work we do now.” King has always been critical of agencies that enter work on what is often their smallest or pro-bono accounts into awards. At King James it is often their most high profile work done for their biggest clients – think Allan Gray and Kulula.com – that walks away with the trillion dollars.

Now, finally, the accolades are landing with big thumps on his and Barty’s desks. The agency been named 2011 Ad Agency of the year, Cape Agency Of The Year and won Magazine Campaign of the Year from AdReview. James Barty was awarded the AdFocus Agency Leader of The Year award 2011 while The Annual awarded it Agencies’ Agency of The Year 2011. Thump thump thump.

And in an informal survey amongst Cape based agency bosses and creative directors in 2011, King James was named the city’s the most admired agency by its peers taking more than half of all the nominations cast. Thump.

King James has taken the agency road less travelled in many ways. It has maintained its independence (it has no global affiliation) and expanded the business sideways by creating specialist divisions in partnership with
entrepreneurs. Each division is part owned by the entrepreneurs that helped launch it. They have never made an annual loss.

They (ok King) indulge themselves in publishing magazines and books and having interesting businesses on the side like King’s Playdough Records, who
has recorded artists such as Arno Carstens, Flat Stanley, Bed on Brick, Jack Hammer, Kobus and Paul E.Flynn.

King James Group consists of a numerous communication agencies that make up the integrated company which includes King James RSVP (the design and promotions arm of the business), Atmosphere (PR), Hammer (activations), Dare Media (media strategy), Proof (proofing studio) and Society (previously +One for social media) as well as pop culture media group, One Small Seed.

Mnemonic, the digital outfit launched with Bruce Wright, has just been ramped up with the addition of Matt Ross and Michael Udell, both ex-DDB. Mnemonic is being rebranded and named Punk.

Entrepreneurs themselves, Barty and King admire that spirit in others, and know shareholdings in the group agencies encourages some of the best talent in the industry to migrate their way, and then to stay. Smartly they don’t have to dilute their shareholding in King James Group to achieve any of this.

The Group finally feels complete, says King, who admits he has always felt somewhat inadequate, that pieces of the integrated puzzle remained missing, but that the Punk deal finally put an end to that.

King has always been an ambitious guy – he wanted to be a creative director by the time he hit 30 and wanted to start his own agency by the time he was 35. He would be five years ahead of his already ambitious career path on both counts.

King completed a Bachelor of Arts degree at Wits, did a short training stint at Barker McCormac and took his first job at JWT Johannesburg as a junior copywriter. By 25 he was a creative director at JWT Cape and in 1992 he joined O&MRS-T&M Cape Town as a copywriter. By 30 he was a creative director and a member of the board.

Barty graduated from UCT with a Social Sciences degree and had completed a Post-Graduate course in Human Resource Management. He had joined O&MRS-T&M Cape Town as a Junior Account Executive.

Luckily for him (and King – you’ll find out why soon) Gilbeys Distillers and Vintners headhunted him as brand manager for some of their brands before being promoted to head up the firms New Product Development. He re-joined O&MRS-T&M Cape Town in 1993 as a group account director and two years later was appointed to its board.

King had been unhappy at Rightfords for a while. Decision making was a frustrating process. He spent more time doing mental gymnastics than creating communications. King wanted out and was ready to resign. He also realised he would soon be tied with golden handcuffs (bonds, policies, car payments) as he settled into married life – he had to take a chance and make the break while he still could.

To start an agency, of course, every creative needs a sound business mind with a steady hand to help steer the business, and King found that in Barty, who he approached with the idea of a break-away agency. Barty was interested, feeling his growth potential had been capped at Rightfords, but wanted to know that the business would be sustainable. They needed a client.

They found one, informally, after a discussion with former colleagues Mike Joubert and Gary May, now in charge of Gilbeys (aha!), whose brands included Cape Velvet Cream and Famous Grouse. Before the announcement of the split, Rightfords, or the new client, King was getting married and going to Mauritius on honeymoon.

Which was just when the board of Ogilvy & Mather, Rightford Searle-Tripp & Makin heard word on the street that a new break-away agency was about to launch involving one or more of its directors. An extraordinary board meeting was called, minus King who was still in Mauritius, to find out who was behind the new outfit. Barty kept mum. No one else was going anywhere. That left King.

Barty now had to move quickly, calling up King and explaining to him that they were in breach of their fiduciary responsibilities, and that they had to resign right away. King faxed through his resignation, a copy of which is reprinted in the book that celebrated the agencies 10 year anniversary, though parts of it is blacked out with an (ineffective) black marker.

The blocked out passage of the resignation, addressed to then Rightfords CEO Derek Carstens reads; “As you are no doubt aware, I have been experiencing feelings of frustration and dissatisfaction for the better part of the year. Over the past few months these feelings have grown to the point that I now absolutely, cannot continue working in the frame of mind that I am in. To express it in the way that I feel it, I have simply fallen out of love with O&MRS-T&M. We no longer seem to have anything in common.” The
next day Barty handed the fax to Carstens along with his own resignation.

They had four weeks to set up the infrastructure to they needed to service Gilbeys. They took over Rocket, a small agency whose founder was leaving for New Zealand, and which tallie included one Mac, two staffers, three clients and four desks, while King’s new farther in law, Geoff Grylls, signed surety for the power connection and additional furniture. Which again highlights the significant role in-laws seem to have played in launching South Africa’s top independent ad agencies (the guys at FoxP2 can tell you all about it). King James opened its doors on 5 January, 1998. Above a chip shop at 12 Roeland Square, Cape Town.

That start-up remains one of a handful of South Africa’s top agencies to have maintained its independence from international agency networks.

King says he and Barty closely observed the paths travelled by other agency start-ups and have grown wary of selling the business. They watched as Rightford Searle-Tripp & Makin sold to Ogilvy & Mather, while Bull Calvert Pace sold a significant stake of itself to the LoweGroup upfront. There was Bester Burke sold to D’Arcy, Harrison Human going to Ogilvy, Joe Public and Bosman Johnson both selling to FCB (Joe Public founders Pepe Marais and Gareth Leck recently bought their agency back from Draftfcb). “We’ve watched how other people did this,” says King, “We don’t want to vanish or get gobbled up.”

King says he and Barty has a clear vision of what the agency can achieve by going it alone. Multinationals, they say, no longer understand the spirit of entrepreneurship that drives the them and makes such a success of the agency.

King dismisses the notion that there is a cap on the growth potential for agencies not aligned with international networks (though he admits he believed it once – until his own experience taught him otherwise).

While initially King James tended to pick up local challenger brands (like Kulula.com in airlines and 20twenty in banking) because they shared an entrepreneurial culture internationally, there has also been movement by multi-nationals towards allowing local business subsidiaries to engage ‘best of breed’ agencies in their markets – a boon for the non-affiliated King James have recently started picking up work from international clients.

Barty believes centralised control of global marketing will increasingly be a model left behind as global companies search out local solutions. Independent agencies can be attractive to big clients and retain their maverick personalities while affiliated agenciescan get it wrong as easily as anyone else. “A network doesn’t protect you from producing mediocre work,” says Barty.

King meanwhile says that as staff churn in marketing departments increase, with senior personal now often moving every two or three years, agencies provide stability to brands, if they manage to keep their own staff churn under control. Like at owner managed King James. And after 14 years of hard work King James has the credentials, and the case studies, to make it into any boardroom.

Of course this wasn’t always the case. Start-up King James would win their second client, the Cape Argus, three months after opening their doors, but the win was followed by a seemingly endless line of lost pitches for brands ranging from Wimpy to Hyundai and Kwik-Fit. Hall’s Fruit Juice would only break the losing streak at the end of that year.

The agency was cash positive quite quickly, thanks the retainer model it introduced to clients, a model that they maintain to this day. Growth would be organic without debt or gearing. Barty (who describes himself as thrifty) has helped ensure that King James never produced an annual loss. For the first ten years of its existence it never retrenched a single staff member.

The team soon left the chip shop behind, moving to new premises in Vrede Street. In 1999 they aligned (for a short while) the agency with Leo Burnett. They also implemented their strategy of opening separate divisions in partnership with entrepreneurial minded people like Jenny Ehlers, with whom they opened King James RSVP (the design and promotions arm of King James) and Bruce Wright, with whom they opened Mnemonic, their digital agency.

But it was in 2000/2001 that the new online bank 20twenty really put the agency on the map. 20twenty aimed to introduce South Africans to ‘consumer-centric banking’ and was a division of Saambou Bank. Its launch advertising campaign included a giant wrecking ball parked outside the Sandton branch of ABSA. 20twenty signed up close to 10 000 clients in its first two weeks of operation. The numbers eventually overwhelmed the banks infrastructure, but in spite of this, customers had a near fanatical loyalty to the bank.

Liking what it saw Leo Burnett approached King James with a merger proposal, something that fell through, taking along the affiliation agreement as well, but Barty and King was basking in the success of 20twenty and a growing business.

Triumph would soon turn to disaster in February 2002 with the collapse of Saambou, which were put into curatorship along with 20twenty, only six months after the online bank had begun operations.

Its furiously loyal clients would stay with the bank for another 18 months in the hope that 20twenty would be saved in a buy-out. (Standard Chartered eventually acquired the online bank only to close it down in 2005 – this time for good).

King James lost 30% of its billings when 20twenty went into curatorship. They were also owed close to a R1 million in fees (only repaid to them after Standard Chartered took over the bank). Even worse, the agency had insisted on staff opening 20twenty accounts where their salaries would be deposited. It was the middle of the month and all operations had been frozen. For a moment King James looked like ‘King Screwed’.

It was the staff that stepped up to take pay cuts rather than see their colleagues retrenched. Its work on 20twenty would also attract the attention of what would become the client King James would eventually do much of its defining work for – Allan Gray – which the agency won in 2002. It also launched its PR agency, Atmosphere Communications, with Nicola Nel.

A Johannesburg office followed in 2003 with Charles Matterson, Eoin Welsh and Muzi Kuzwayo. The agency landed (sorry) two key clients in the kulula.com credit card launch as well as Parmalat in 2007. Kulula.com promptly moved its entire account to King James barely a week after the credit cards launch.

When Muzi Kuzwayo and Welsh both resigned from King James Johannesburg within days of one another in 2007 the agency was thrown into turmoil. Eventually King would take control the Johannesburg office creatively. He could see no point in splitting time between Jozi and Cape Town in the age of Skype and broadband, and closed down its studio, moving all strategy and creative to Cape Town. Several important clients, including BA and McCain, are still managed from Johannesburg.

King James also broke its no-retrenchment record in 2008 when it lost Windhoek after four years – they lost five people.

But things have turned around again – last year King James added McCain, British Airways and short-term insurer Santam. King James won the whole of the Parmalat account in 2011 and followed that with bagging the Pan-African Johnnie Walker business of the global ‘Keep Walking’ campaign, before adding the Galaxy business. Annual revenue has broken through the R110 million mark.

The agency also moved into the historic Roodebloem Manor, in Woodstock, Cape Town. King credits the new building for helping blur the lines between the different divisions that make up King James.

And of course there is Punk. “As a business, we keep a very critical eye on our company as a whole and whenever we feel we are lacking in a particular skill, we look to plug that gap quickly,” King explains the reasoning for the new outfit. “Despite the fact that we have had a web and digital offering in the form of Mnemonic, we started to feel that the world of communication is shifting faster than we are.”

King and Barty believes the future of advertising is neither digital nor traditional, but somewhere in between, and that neither the ‘traditional’ nor the ‘digital’ parts of the group are fully equipped to deliver the kind of communication work they think a changing world is moving towards. So, while Punk will be a standalone company within King James Group that will build its digital credentials, its primary role is to help the group evolve its work in the direction we feel it needs to,’ says King.

Mnemonic has been folded into Punk (Mnemonic cofounder Wright takes a shareholding in Punk and remains CD), so it starts with a good foundation of clients, while the entire agency has been juggled around so it sits amongst the King James creative teams plus social media agency Society.

Ross will not only front the digital outfit – he has also been named executive creative director at King James while Udell takes on the role of an integration officer with the brief to pull together all the different divisions and making them gel smoothly and kill off any silos in the agencies strategic or creative thinking.

Which is of course a road less travelled in itself. But one the King James Group seems intent to set out upon to ensure its sustainability and independence.

Reprinted from the February 2012 edition of AdVantage magazine.