The kings, James & Al, on trebling agency in last decade
by Herman Manson (@marklives) King James Group has established itself as one of the creative drivers in the South African agency market, with standout — even iconic — work for brands such as Allan Gray, Santam and Sanlam.
Starting with the founding agency in Cape Town, it has also founded a successful public relations agency (Atmosphere Communications) with Nicola Nel as managing director. Its Johannesburg agency, King James II — launched with partners Rob Mclennan and Graeme Jenner — managed to win back Allan Gray for the group after the Cape Town agency had to resign the business to avoid conflict work. It successfully pursued a strategy of digital integration, recently merging digital agency Punk and social media specialists, Society, into King James Digital, home to 90 digital specialists.
Today, the group consists of five companies — Atmosphere (PR), King James (Cape Town), King James II (Jozi), King James Digital and Hammer Live Brands (events) — but share a single creative department for conceptualisation, which then gets executed by the expert units. The different companies helps the group to handle conflict work; Atmosphere is able to work on Capitec, and the main agency on Tyme Digital (the new online bank launching soon).
This year, the agency has celebrated its 20th year in business. It shot its now-iconic Allan Gray ad, “Beautiful”, just after its 10th birthday, an ad that helped define both the brand and the agency. According to King, the ad even recalibrated the agency’s ambitions and vision for itself. Suddenly, expectations — inside and outside the organisation — rose substantially.
On digital integration, King says the agency had intuitively moved towards integrated campaigns but, from 2010 onwards, it set about doing on purpose what it’d been “doing by mistake” up to that point. Creative directors from the various disciplines were moved into the same space six years ago, and the different agency systems (eg traffic) collapsed into a single unit to serve all the specialist units. Briefs go agency-wide; they don’t sit in a silo. Work needs to maximise return, says Barty; one recent campaign had a R10m budget but created R50m in value for the client.
Uniquely South African
According to King, the last decade presented the agency with trials and opportunities as the style of advertising, and the agency model, evolved. It’s risen to the meet the challenges presented by both, as its WhatsApp drama for Sanlam, Uk’shona Kwelanga, shows. Covering film, experiential, mobile, app and PR, the campaign resulted in a 140% increase in policy sales. It was a unique, and uniquely South African, piece of work.
The agency has trebled staff count over the last decade. It is producing the level of work King is happy with, and not lost its culture in the process. Revenue has hit R220m per annum.
If there’s one point in which King James lags, it would be black ownership. Barty freely admits that black-owned agencies will be the ones which take business away from incumbents in future. According to him, the agency is “in an advanced stage of concluding an additional BEE shareholding transaction, bearing in mind that we have had a shareholding structure for our black staff (which owns 26% of the agency) in existence for some time already.”
King James Group is currently incubating a small black-owned and-managed agency from Soweto, named Cognitive, at its (now second set of) Joburg premises. King’s advice to the new wave of startups is to say that, when they themselves started, they were told that the Cape Town market was already crowded with new agencies. It didn’t stop them. “There is no good time or bad time to start an agency,” he says. “Do what you do well and your business will grow. Trust your work and your ambitions.”
Barty adds that they didn’t work on two- or five-year plans when the business launched. They took a much more intuitive approach, putting their faith in their work, which he describes as the shop window of any agency. Managing culture and the moving parts of a business are where the real challenges in growth lies.
On retaining its independence, Barty says that all networks want to buy a minimum 51% of an agency upfront, instead of starting at a lower number and then participating in a journey, possibly towards majority-ownership. Sale of equity is a trigger for agency founders and management to exit, rather than for growth, which he describes as a perverse business model.
Surprising the market
Continuing on its growth path, King notes that the agency was widely expected to have peaked as an independent some 10 years ago, yet it’s consistently managed to surprise the market, most recently by managing to onboard the massive Pick n Pay account, as well as that of Sanlam.
The group has grown to around 300 people, of which two-thirds sit in Cape Town and roughly one-third are digital specialists. King James II is especially strong on technology and developing business processes, as well as IT infrastructure builds. It’s already pulling in consulting work on the UX/IT nexus, meaning it’s bumping up against the management consultancies.
Barty sees potential for growth in a number of sectors where the agency is not yet represented; it doesn’t currently hold a car or a petroleum account. The agency is also seeing positive growth in its analytics and digital-media-buying side, albeit off a low base.
Barty and King both agree that the agency is maintaining positive momentum. Their best work, both insist, is still coming.
*Correction made on 11 July 2018: Spotify, not Shopify. We regret the error.
Herman Manson (@marklives) is the founder and editor of MarkLives.com.
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