Local ad agency leans on global group to expand into Africa

Local advertising group The Creative Counsel has been 100% bought by France-based multinational Publicis Groupe in what is rumoured to be a R1-billion deal.

South Africa’s largest advertising agency group by turnover and head count was founded in 2001 by Ran Neu-Ner and Gil Oved and specialises in activations and promotions.

According to Neu-Ner, the duo realised that now was the time to expand into Africa, and a “big brother” with a bigger cheque book would bring that strategy to fruition.

Co-CEOs Neu-Ner and Oved said the deal is structured around an earnout, meaning the exact price of the acquisition is likely to be determined by future performance of the South Africa-based entity, whose clients include Unilever, Vodacom, Clover and Standard Bank.

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“We got to a crossroads where we needed to take on the African continent, which is tough given that the multinational networks were already playing aggressively in that space.

“We knew we had a very good business model that could work in Africa but we needed to roll it out quickly. We needed a partner to help us do that,” he said.

Neu-Ner said he and Oved chose Publicis from among other multinational suitors because the bigger group will allow management to stay and remain entrepreneurial.

“We’re contracted for at least the next four or five years. It’s a significant investment for them and their only big activation play on the continent.”

Oved said TCC is now the centre of the Publicis group’s attention because of Africa’s potential for consumer-goods companies that need more than television adverts to spread brand and product awareness.

The broader Publicis group operates 51 agencies in 35 countries.

TCC has developed its own intellectual property in activations, involving finding and training brand activators in communities who then act as brand educators within those communities.

With each market representing different phases of maturity and size, Neu-Ner said TCC has spent 18 months researching its target markets and the rollouts for each.

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Within six months, the group aims to have offices in Zimbabwe, Zambia, Mozambique and Nigeria, with phase two to include Ethiopia, Kenya and Tanzania.

“We chose Publicis because it already has an amazing network of partner agencies across Africa — very hungry agencies who want to make a statement. Publicis also has a lot of intellectual property in shopper marketing, activations and the use of digital activations for us to leverage off,” Neu-Ner said.

Publicis Africa Group CEO Kevin Tromp said the broader group has acquired 15 high-profile African agencies in the past two years and was making a long-term play in Africa based on expected growth in consumer demand.

TCC’s expansion will be into markets where Publicis clients are requesting activation support, “and where we are seeing major commercial development”, Tromp said.

He added that while TCC’s black-empowerment ranking had not been an issue of focus in the Competition Commission’s approval of the deal, further announcements relating to its ownership structure would follow shortly.