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Not a boom, real growth

  •   June 18, 2013
  •   0
By Herman Manson (@marklives) The African continent isn’t quite the growth honeypot ad agencies had been hoping for. That said – it’s certainly a growth market. While it doesn’t match the growth rates in Asia or even Latin America, listed agency networks seem to have decided any growth is good growth given the state of especially their European operations. North Africa remains fragile – ZenithOptimedia forecast onlyornico 1% growth in ad revenue in the Middle East & North Africa as political turmoil post the Arab Spring continues to rock the region. The company expects 2%-3% annual growth from 2013 to 2015.

Growth in adspend globally is predicted by ZenithOptimedia to hit 4.1% in 2013 and 5.6% in 2015. South Africa will be one of the top ten ornicocontributors to that growth between 2012 and 2015.
South Africa in the South, Kenya in the East and either Nigeria or Ghana in the West of Africa generally gets the most buzz from agencies seeking investment in the region.

It’s not all great headlines though. Publicis, one of the world’s major holding companies of agency networks (including Leo Burnett, Publicis Worldwide, Saatchi & Saatchi), generated only 4% of its revenue in the Africa & Middle East region in 2012 and the continent barely gets a nod it its 2012 results report.

Others, like M&C Saatchi, are seeing their African investments booming. It reported revenue growth of 121% in the Middle East and Africa in 2012. Revenue from Cape Town and Johannesburg more than doubled from £3.0m to £6.6m and it’s actively looking to expand its African network with affiliate offices in Nigeria and Kenya. The South African business is the fastest growing in the M&C Saatchi network.

WPP (and its associates) collectively employs over 24,000 people across the continent, generating revenues of over US$600 million. Globally it had £10.3bn (as at 31 December 2012) in revenue. WPP owns agency networks such as Grey, JWT, Ogilvy & Mather and Y&R (and in South Africa it also holds stakes in The Jupiter Drawing Room and Ireland/Davenport).

The agency networks have accelerated their investment into the continent as they follow the big brands, especially in the cellular, alcohol and retails space, into new markets.

The smart networks are empowering local partners as shareholders – the consensus seem to have been reached that partnerships are the best way to gain traction in new markets. Increased competition amongst agencies are good news for brands and stimulates more money to flow into the marketing economy, which in turn will be good news for independent start-ups, a mini-boom of which we are seeing in South Africa.

 – Ornico and MarkLives have teamed up to present our first ‘The Africa Annual‘, a compilation of some of Africa’s remarkable stories and resources for businesses; and media, marketing and branding enthusiasts. (Article reprinted from The Africa Annual)
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Columns

  • *Young, Gifted & Killing It – Veli Ngubane
    *Young, Gifted & Killing It – Veli Ngubane
  • ABC of Scale — Charlie Mathews
    ABC of Scale — Charlie Mathews
  • Adnalysis – Bogosi Motshegwa
    Adnalysis – Bogosi Motshegwa
  • Agency Leaders – Most Admired Poll
    Agency Leaders – Most Admired Poll
  • Agency Life – TJ Njozela
    Agency Life – TJ Njozela
  • Back2Basics – Mark Eardley
    Back2Basics – Mark Eardley
  • Big Q – MarkLives Panel
    Big Q – MarkLives Panel
  • Big Reads on MarkLives
    Big Reads on MarkLives
  • Brand Culture – DK Badenhorst
    Brand Culture – DK Badenhorst
  • Brands & Branding – Affinity Publishing
    Brands & Branding – Affinity Publishing
  • By Invitation Only – Motive
    By Invitation Only – Motive
  • Cartoon – The Marketing Mice
    Cartoon – The Marketing Mice
  • Circulation Data – ABC Analysis
    Circulation Data – ABC Analysis
  • Clicks 'n Tricks – Charlie Stewart
    Clicks 'n Tricks – Charlie Stewart
  • Cover Stories – Shane de Lange
    Cover Stories – Shane de Lange
  • Dear Radio – Paulo Dias
    Dear Radio – Paulo Dias
  • Design Indaba – Festival of Design
    Design Indaba – Festival of Design
  • Design Plus – Mark Tungate
    Design Plus – Mark Tungate
  • Dissident Spin Doctor – Emma King
    Dissident Spin Doctor – Emma King
  • Fair Exchange – Erna George
    Fair Exchange – Erna George
  • Fragments – Marguerite Coetzee
    Fragments – Marguerite Coetzee
  • Gestalt – Leeya Hendricks
    Gestalt – Leeya Hendricks
  • Global Headline Makers – Mark Tungate
    Global Headline Makers – Mark Tungate
  • Headspace – Tenielle Maris
    Headspace – Tenielle Maris
  • Hermaneutics – Herman Manson
    Hermaneutics – Herman Manson
  • Hidden Figures – Musaba Kangulu
    Hidden Figures – Musaba Kangulu
  • Masterclass Notes – Johanna McDowell
    Masterclass Notes – Johanna McDowell
  • Media Future – Arthur Goldstuck
    Media Future – Arthur Goldstuck
  • Media Redefined – Martin MacGregor
    Media Redefined – Martin MacGregor
  • Only Connect – Bradley Elliott
    Only Connect – Bradley Elliott
  • Shelf Life – Cheryl Hunter
    Shelf Life – Cheryl Hunter
  • South African TV Ratings
    South African TV Ratings
  • The Ad of the Week – Oresti Patricios
    The Ad of the Week – Oresti Patricios
  • The AdForum Summit – Johanna McDowell
    The AdForum Summit – Johanna McDowell
  • The CX-Files – Julia Ahlfeldt
    The CX-Files – Julia Ahlfeldt
  • The Interlocker — We cover comms
    The Interlocker — We cover comms
  • The Martini Shot – Bobby Amm
    The Martini Shot – Bobby Amm
  • The Real McCoy – Sean McCoy
    The Real McCoy – Sean McCoy
  • Thinking B2B – Warren Moss
    Thinking B2B – Warren Moss
  • Unorthodoxy – Gau Narayanan
    Unorthodoxy – Gau Narayanan
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