Don’t just tick BEE boxes
SOUTH African advertising agencies pursuing new black ownership targets need partners, who make a positive contribution to the business, not just “tick the empowerment box”, says David Kershaw, chief executive of the international M&C Saatchi advertising group.
He says although achieving the new goals will be difficult, “we must all accept the changes will happen. This is the reality and we must work with it”.
Agencies are expected to reserve 26% of equity for empowerment partners. From 2018, that will rise to 45%, of which 30% must be for black women.
The change is contained in a new broad-based black economic empowerment (BBBEE) sector code for the marketing, advertising and communications industry.
According to Trade and Industry Minister Rob Davies, the new code will “prioritise black ownership, increase a pool of human resources in the sector and contribute towards addressing unemployment”.
Eventually, perhaps. But experience suggests that active black participation in advertising has been slow to develop.
Talent is coming through but not at the pace some would like. As a result, there is a lot of inter-agency poaching of black skills.
To make matters worse, those skills often leave the industry, lured away by marketing companies with their own empowerment targets.
Kershaw was recently in Cape Town for a global M&C Saatchi group conference hosted by the South African affiliate, M&C Saatchi Abel, which was launched in 2010 by managing partner Mike Abel.
The local agency is 26% blackowned and Kershaw says it will meet the 45% target deadline. “The law is the law.” But he adds: “You must be comfortable with transformation and how it affects your business. You want people who make a contribution to output and not just tick the empowerment box.”
Kershaw has been CEO of M&C Saatchi, which has 26 offices across the world, since 2004. He was previously managing director of Saatchi & Saatchi before leaving with the founding Saatchi brothers, Maurice and Charles, to create the M&C Saatchi group.
The Cape Town-based affiliate has enjoyed outstanding growth since its launch and has started to develop a reputation for creative advertising.
Kershaw says: “You can’t sustain an agency if it doesn’t produce work that excites.
“Of course it’s important to produce work that has a positive impact on the business of the client, but you also need that creative spark.
“SA was not a creative advertising hub for the group at first – it is becoming that now. SA traditionally has been one of the world’s best markets for creative advertising. I travel a lot and there aren’t many markets where you can genuinely say you look forward to seeing advertising,” Kershaw says.
“SA, Australia and New Zealand are among the few places where I do look forward to seeing what’s on the telly.”
Kershaw would like M&C Saatchi Abel’s growth replicated elsewhere in Africa, but says this will not happen in a hurry.
“Africa will become an important market. There has to be rapid economic growth. But when?”
Abel has created an Africa division operating out of SA and Kershaw says: “If Mike and his team tell us eventually we should build an infrastructure outside SA, we would give the idea serious consideration.
“We tend to back the recommendations of people, who deliver,” he says.
In the short term, M&C Saatchi is not under great pressure to grow its African business beyond SA. Where most global advertising groups are driven by multinational clients to expand into new territories, Kershaw does not feel the same compulsion – yet.
“Only 20% of our revenue comes from global clients. For other groups, it is up to 70%.
“Frankly, we’d like to be up there, and over the next two or three years we will intensify the scale of our global clients.
“But for now, there’s not a lot of that kind of pressure to move up into Africa.” — BDLive