by Tom Fels (@thomasfels) There is a great quote I remember from a movie: “Nothing ever changes around here except the seasons.” While it rings true for many aspects of life, one area where it falls dramatically short is in the daily demands of the advertising world.

Tom FelsFor, if anything can be said for certain it is that, when it comes to advertising, the only constant is change.

But today is different; today marks an accelerated change that is more like a tectonic shift than the slow release of winter’s grip. Radical movements in three aspects of our industry are redefining the landscape, setting the scene for the next era in adland:

  • The rapid acquisition of many of the country’s leading independent agencies by global networks;
  • The dawn of a new era in agency leadership (both related and unrelated to said acquisition); and
  • A number of sudden and significant account moves.

The big picture

It’s easy to give only a fleeting moment to the latest press release that marks a single change in the fabric of a large and boisterous industry. Chances are the only time you may pay an announcement any more attention is if it is about you; your clients, your services, your awards, your performance.

But the macro view of all that is ongoing will tell you to take heed — what is happening is important and it will probably affect you, whether you like it or not.

The big story of the 12 months is in the agency acquisition space, where WPP and Publicis have in particular gone to town, making over 10 combined prominent local acquisitions.

With an already firmly established presence through the Ogilvy & Mather, Y&R and JWT businesses, among others, WPP looks set to extend its capabilities through the reintroduction of the Grey brand as Volcano/Grey South Africa and a majority stake in The Hardy Boys, along with enhancing its digital offering as it now has interest in Cerebra, Aqua (acquired in 2007), Native VML and, most recently, Quirk.

A significant number

Altogether, these represent a significant number of the country’s big digital players and, according to a recent MarkLives report, the combined revenues of the latter three tip an estimated R375m, making them the largest digital agencies in South Africa.

Not to be outdone, Publicis Groupe has been engaging in broad acquisition activity across both the advertising and media spectrums, carefully architected locally and into Africa, with a clear intent to provide a comprehensive network of powerful specialisations. This will enable the group to lead national and global brands north of our border.

The network has done deals for boutique digital shop, That’s It Communication, pure-play medical agency Blue Parrot and Lighthouse Digital, which now forms part of Starcom Media Vest. Several of the renowned Publicis agency brands are also getting a new burst of local energy as they take on prominent independents to form Publicis Machine, Saatchi & Saatchi BrandsRock (as well as Synergize), Prima Arc, Liquorice (now a DigitasLBi company) and OwenKessel Leo Burnett.

In the pipeline

What with more deals speculated to be in the pipeline in South Africa, Kenya, Tanzania, Angola and Mozambique, as well as with the leading agency in Nigeria, Publicis is set to realise its potential on the continent.

TBWA is the most recent group to show its hand, having indicated its intention to conclude six deals over the next year in SA.

All the bold agency moves are not limited to acquisition alone; Cape Town stalwarts King James and FoxP2 have a growing Johannesburg presence (the latter significantly boosted by its recent FNB win), while MetropolitanRepublic and Joe Public have spread their wings in the Mother City (MetropolitanRepublic has since closed its Cape Town office). Joe Public also recently announced the expansion of its footprint with affiliate partnerships in several African countries, after branching into the European market with Amsterdam-based Joe Public Take-Away. Joe ‘Grow’ indeed.

Shifting leadership

As a natural accompaniment to broader moves, new opportunities have been created in key creative and business leadership positions, which have usurped a number of well-entrenched figures.

Julian Ribeiro recently left Ogilvy & Mather for Lowe Partners, John Dixon has taken the helm at Saatchi & Saatchi BrandsRock after a significant stint at Draftfcb (now FCB) and Jerry Mpufane has transitioned over to M&C Saatchi Abel.

Key creative leadership positions have also been filled, among others, at MetropolitanRepublic by Gareth Lessing and TBWA\Hunt\Lascaris Johannesburg by Peter Khoury, who’s adopted the role of chief creative officer.

This provides a whole host of opportunities in the departed agencies for organic growth and the empowerment of top talent waiting in the wings, just as it was in the case of Gavin Levinsohn’s departure from Ogilvy & Mather Cape Town, which made way for the charismatic Luca Gallarelli to take the reins as MD.

Giant account moves

Lastly, and not surprisingly, clients intent on shaking up their marketing plans have uprooted their business and sought new pastures. Among the significant recent moves are Sanlam moving out of MetropolitanRepublic into King James, Vodacom Retail going to Ogilvy RedWorks, FNB appointing the reliably creative minds of FoxP2 in Joburg and Cell C partnering with FCB SA.

What to expect?

We’re in a window period of operational consolidation across much of adland, both structurally and in terms of settling new leadership teams. One can be assured that, as each of these new entities comes online with full effect, the marketplace is going to ripple in two major ways:

  • The first is a tightening on any global accounts that, with enhanced capabilities on offer, should not be as reliant on specialist external hotshops to service their peripheral needs.
  • The second is a new era in competition for prized large blue-chip accounts in both of our primary local advertising ‘cities’, as the number of potentially suitable agencies in the pitch pool has just increased dramatically and will be fighting tooth and nail for the spoils.

With a far clearer distinction between network agencies and independents, more decisive choices will also need to be made by both clients and industry talent as to whom to partner with.

One might feel that there could be a backlash in two-to-three years as clients seek a new crop of rising independents; however, in the near-term, I would imagine greater pressure being applied upon independents in the mid-to-lower tiers of the industry.

Define the next era

From a talent perspective, the shifts will no doubt provide new avenues of exposure for rising stars, as well as a solid new level of mentorship for those who have had industry veterans appointed into leadership positions.

The sum total of these moves looks set to define the next era in South African advertising — if not for the next few years, perhaps for the next decade. There will be winners and losers, but what I look forward to the most is to see how everyone plays the game.

With a decade of local and international experience in leading brand consulting, design, shopper marketing and integrated advertising roles, Tom Fels (@thomasfels) has gained a deeply relevant understanding of the dynamics of agencies. His skills are put to work daily as group managing director of Publicis Machine. He contributes the monthly “The Ad Exec” column to MarkLives.

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