Publicis gets creative
Deal speaks volumes about business potential in Africa at a time of widespread uncertainty
A’s first billion-rand advertising acquisition was inked this week as the acquisitive Frenchowned Publicis group bought marketing, promotions and activation agency The Creative Counsel (TCC).
The deal has been over two years in the making and, though Publicis and TCC won’t reveal the exact numbers, Kevin Tromp, CE of Publicis Africa group, tells the Financial Mail: “This is clearly a large deal and there is much speculation about the quantum. The reason we engaged with TCC is that we believe brand activations and experiential activity are critical [for success] in Africa.” TCC joint CEOs Gil Oved and Ran Neu-Ner, who started the business 14 years ago, won’t talk about the size of the deal either, focusing rather on the strategy behind it. TCC employs around 1 500 people in a fulland part-time capacity and has an annual turnover of R500m. Its principal offering has been getting products into stores for consumers to engage with and sample. Major clients include Unilever, Vodacom and Standard Bank.
In a month where the pair won the Sanlam/Business Partners Entrepreneur of the Year
Saward, they say they’ll be able, with the muscle Publicis brings, to focus on growing the business aggressively in Africa, something they’ve tried and failed to do in the past.
Oved notes: “Publicis is represented in over 30 African markets and the deal allows us to turn on our systems in a far more enabling environment.”
He says TCC has danced with other multinationals in recent years but “best industry practices; a commitment to a digital future; global expertise; and a big balance sheet” tipped the scales in favour of Publicis.
Tromp says: “TCC has built a large business in SA, which dominates the activation and brand experience space and has created great value for its clients and people in this country. This value will increase exponentially as we will be able to bring TCC’s talent, intellectual property and drive to bear in partnership with local culturally relevant expertise and Publicis’ global brandbuilding sophistication.”
Oved and Neu-Ner believe the deal speaks volumes about business potential and opportunity both in SA and on the continent at a time when uncertainty prevails in many markets. Tromp agrees the horizon is huge: “It’s clear that promotions, activation and brand experience are critical elements in the communication mix in Africa, and our due diligence across the continent showed there was no broad-based organisation of any consequence cohesively supporting clients in these disciplines. There is a real need for a sophisticated, reliable, multinational operation that will meet clients’ needs.”
Tromp, who has been sewing up agency deals rapidly in recent years, including Machine, BrandsRock, Liquorice and Owen Kessel, says he’s been looking for “high-potential agencies, entrepreneurial spirit, broad-based talent, great leadership, abundant energy and an enormously positive view of Africa’s future”.
The energy Tromp refers to manifests itself clearly at TCC’s huge headquarters — dubbed the spaceship — on Johannesburg’s busy M1 North highway. On one floor there is a running track, and a number of rooms called collaborative hubs, one with hammocks, are positioned over a giant warehouse containing shelves of promotional products that are trucked daily to various retail operations.
While the spaceship aptly describes the building, Oved notes it’s also called “the sweatshop”. Staff work long hours and Oved concedes the “no-quartergiven” approach means a high turnover of people.
The ad industry is asking if the TCC deal is the final chapter in the big Publicis acquisition drive. Says Tromp: “We are still busy with a number of transactions across the continent that will support our strategic intent. We are always seeking out opportunities that will allow us to provide clients with the greatest competitive advantage possible.”
Publicis has acquired 100% of TCC and various operating companies including PopIMedia and Product of the Year. A 30,1% empowerment trust and a stake by a private equity consortium also form part of the deal. Tromp says Oved and Neu-Ner will continue to manage the TCC business and will also play a role within the Publicis Africa Group management team.
The young founders (both under 40 as the deal was signed) suddenly have enormous bank balances, but they say they’re in the business for the long haul. Says Oved: “It’s also about building a legacy and something meaningful, but right now we both have butterflies. It’s like the first day of school.”