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Ogilvy Africa is eyeing several acquisitions in the continent this year, as it seeks to lock in a growing number of multinationals and reduce reliance on the East African market.
Ogilvy & Mather Europe, Africa and Middle East chairman Daniel Sicouri said the firm was seeking to gain controlling stakes in several existing partnerships while making new acquisitions.
Mr Sicouri said that the strategy was to gain access to high net worth clients and position itself for the growing number of companies opening offices across Africa.
The buyouts are expected to help the firm tighten grip on the telecoms sector in Africa, especially the mobile telephony market — a big media spender.
While this is a likely response to increased demand from local clients who are going regional, the planned acquisitions are also a reflection of the changing dynamics in the global advertising sector, where media giants hope to cash in on renewed optimism over Africa’s market growth.
“Africa is key to our global business. We need to take advantage of low hanging fruits,” said Mr Sicouri.
Key executives from across Ogilvy’s agency network in Africa met in Nairobi a fortnight ago to discuss emerging business trends on the continent. They discussed the potential new ventures as well as businesses in which the firm would increase its stake.
Since September last year, Scangroup has formed two advertising firms in Ghana (Scanad Ghana Ltd and Ogilvy Ghana Ltd) and acquired the business of a partner agency (Media Majique and Research System) to boost its regional presence.
Scangroup acquired a 51 per cent stake in Ogilvy Africa BV and a 50 per cent stake in Ogilvy East Africa in 2010, giving it minority stakes in eight countries and affiliate relations in 15 more. It has been working at growing these links.
But its foray into African countries is proving problematic. “While there are opportunities in Africa, there are also challenges especially in talent management and sourcing. The industry is increasingly demanding quality and very creative people — who are lacking,” said Mr Sicouri.
The battle for a larger market share in Africa has seen international firms such as WPP and Publicis face off in this region through local affiliates such as Scangroup and Young and Rubicam, as they seek growth opportunities in new and emerging markets by expanding their footprint in African countries.
Scangroup has offices in Kenya, Uganda and Tanzania and buys media in Ethiopia, Rwanda, Burundi, Zambia, Zimbabwe, Malawi, Mozambique, Angola, Gabon, DRC and Mauritius.
The East African Newspaper
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