by Herman Manson (@marklives) Volcano, an agency that this year entered its 21st year in operation the South African ad industry, has been resisting offers from the multinational networks for years. Either it would be force-fitted into an existing, already-successful operation, or it would have to take over a lesser agency with all the accompanying politics and, well, dead wood.
But, a year ago, WPP suddenly closed down its SA agency for Grey — a network Adweek named its Global Agency of the Year.
Grey would be back, it promised, either through the establishment of a new integrated agency or through an acquisition. Negotiations with Volcano started soon afterwards.
Business as usual
The deal, which sees WPP acquire Volcano and rebrand it as Grey South Africa, allows the agency to do business as usual but with a new name, access to a roster of global clients and investment to leap north.
Group managing director Paul Jackson says the deal means the business could continue to operate on the strong foundations it has spent 20 years building, retain its culture and people, and, well, add to them.
The agency launched in 1994 and has been growing steadily, if quietly, over the last two decades. Clients include Procter & Gamble, First National Bank, Sony and Consol Glass.
The agency has focused on establishing long-term partnerships with clients; it has been working on the Airlink account for 20 years, on Sony for 18 and Garmin for six. Its core management team, for the most part, has been with the business for 10 years or longer. It definitely saw its future as an independent, says Jackson, until the opportunity arose to rebrand as Grey.
Two key issues identified
As an agency, Volcano had identified two key issues it would need to address to grow. One was being part of a global footprint, which it did through an association with ICOM, a global network of independent ad agencies. The other was to grow north of South Africa as multinational clients grew their own businesses there.
By joining Grey, the agency can now tap into global clients (which include Volvo and Gillette, among others). The local agency has also been given a mandate to open owned offices in Ghana, Nigeria and Kenya.
In SA, the local Grey agency (pre-closure) started slipping around three years ago, says Jackson, who admits it will take some work to rebuild the brand here. “The network did the right thing to close the local agency when it did, and [start] afresh,” says Jackson.
Market feedback so far has been positive and there is a real desire in the industry to see the brand work in SA, according to Jackson. He expects an uptick in the agency’s performance in award shows; he says the local agency has already received assistance in how to approach and package award entries.
Brand won’t disappear entirely
While his agency is being rebranded as Grey, the Volcano brand isn’t about to disappear entirely — it will constitute the BTL specialist unit with Grey South Africa. A business is not a name on the wall, Jackson reminds us; it’s people and culture.
Jackson and members of his team maintain a minority shareholding in the agency. The WPP black economic empowerment trust also has a shareholding.
Over the short term, Jackson says Grey in SA will focus on adapting new technology and IP it feels will fit the business, and onboarding global accounts it now has access to. Over the medium-term, it will expand its work with Grey affiliates on the continent and established owned offices in other African markets.
Grey currently employs 71 people in Johannesburg. Volcano’s unaudited consolidated revenues for the year ending 31 May 2013 were approximately R61 million, according to WPP, with gross assets at the same date of approximately R26 million.
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