Advertising group TBWA is planning to open an affiliate agency in South Sudan as part of its expansion in east Africa amidst the rapid growth in marketing spending in the region and the entry of multinational firms.[hidepost=9][/hidepost]
TBWA set up its Kenyan office in February and launched in Tanzania in June. It also has a presence in Uganda, as well as partnerships in Rwanda, Ethiopia and Burundi.
“Our clients have moved there [South Sudan], like Stanbic Bank, and we want to be on the ground to serve them better. We are also going to increase our office presence in the east Africa countries,” said Tim Smyth, CEO of TBWA East Africa.
Some of TBWA’s clients in the region include the Standard Bank Group, Visa International, GlaxoSmithKline and Unilever.
“We have had a very strong presence in South Africa for a while, and some agencies across Africa. We want to unify the agencies to become a network that works together. That is in the context of Kenya and the east Africa region because increasingly the companies that are here need strategic partners to work with them in Kenya but also in the region,” explained Smyth.
TBWA is owned by Omnicom, a global network of communication agencies.
TBWA’s African operations director, Rick de Kock, has recently been quoted in the media saying the group is preparing to buy equity stakes in east and west Africa.
“Our first big equity investment will be in east Africa,” said de Kock. “We are finalising the transaction at the moment. There’s a lot of embryonic stuff under way and we are progressing quite well on further equity discussions in west Africa.”
TBWA is optimistic that the Kenyan market will record exponential growth in the next three years. “The market is very active and very competitive. Now with digital media it means there will be proliferation of more agencies specialising in particular things. We will see growth of agencies as well as specialised agencies,” said Smyth.
Smyth added that TBWA has recently signed-up clients such as Mobile Planet and South African Airways, and hopes to expand its portfolio further.
The agency is particularly looking to work with Kenya’s local brands, which have in the past years become stronger.
“In Kenya there are a lot of international brands, but local brands are growing fast like Equity Bank, Kenya Commercial Bank and Safaricom in the services sector. What we don’t see are big local product brands. We want to develop this,” said Smyth.
TBWA is also banking on digital media to reach the growing numbers of people online.
“The global evidence is digital advertising is more effective in engaging the consumer. Digital can have a lot of impact if you do it right,” Smyth explained.
Smyth reckons that one of the challenges the industry faces in Kenya is the fact that some companies do not see the value of what advertising agencies add.
“Management of companies haven’t seen the need to invest in their brands,” explained Smyth. “They invest in sales, so commercially the brand is successful, but as a brand, it doesn’t sit beside Safaricom.”
Smyth questions whether brand and marketing managers really appreciate the communication and advertising industry in the same way they appreciate the opinion of a lawyer or accountant. “That is a problem in the industry. For some reason we are lower down on the food chain than other people providing professional services to these companies.”
The other major challenge the industry is facing is the declining impact of advertising in reaching and changing consumer perceptions. He blames this on an evolving media scene, poor quality of advertising and the fact that people do not want to be advertised to but rather engaged.
“What that says to companies is that if advertising is not working, why then do I need it? On one hand the industry doesn’t have a lot of respect and on the other hand the industry isn’t producing impact. We need to change the game,” he said.
According to Smyth this will have negative implications for companies in the future, given that every single industry in the world is commoditising with technology, standardisation and prices going down.
“The only thing that will stand in a commoditised market is a strong brand,” said Smyth.