The sweeping changes across Adland

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Take a look around. In a short year from now the advertising scene will look vastly
different, with a multitude of network-aligned agencies making up the bulk of the
market value and a vast gap between the real players and those on the up. Or
down. For as the landscape shifts and changes, new growth opportunities will
sprout, and there will also be many doors closed.

As industry insiders, our noses are kept close to the ground and we acknowledge
each acquisition by WPP, Publicis and the like, with varying levels of interest.

However, the statistics have become difficult to ignore; in South Africa alone, over
the past year Publicis has completed eight transactions, WPP has new interest in six
new agencies, and TBWA has announced their intention to conclude deals with six
local agencies in the coming year. That is a total of 20 businesses that have been
swept up into the global pool, many of whom will now boast international agency-
brands that carry huge gravitas. It also signifies the removal of as many agencies
from the independent sector of the market, many of which by nature are the most
competitive and reputable.

What does this mean for clients, talent and the remaining independent agencies?

At first, there may be a period of pure confusion in the client world. The 20
“merged’ entities will have new stories to tell, new skill-sets and access to global
intellectual property to trade, as well as increased geographical footprints.
However, after an initial barrage of information, clients will likely settle into
evaluating prospective agencies as they have always done by quality of creative
and technical product, the agency’s ability to be a brand custodian, the level of
servicing, chemistry and price. You’d also expect that as procurement gets more
sophisticated, more agencies will look to their international counterparts for global
best practice and precedent to apply locally. This may be a good move for agencies
in an increasingly unequal negotiation landscape.

And what of the people? In the creative sphere there tends to be two stereotypical
mindsets; those that are typically business oriented, contrasted with those that get
their drive out of their purely creative pursuits. Some of the acquisitions may
therefore spiral pure-play creatives out of their current environments for fear of the
corporate beast and how it may restrain their craft.

Others will no doubt be knocking at the door, eager to replace them by forming part
of the change and stepping into new spaces as the network evolves. Ironically the
mandate of many of the ad groups is to expand their creative capabilities so
network agencies will need to work hard to retain their top talent. One thing that
will remain unchanged across the industry is that good people are hard to find.
Retention plans and agency culture could therefore play a key role in differentiating
each business in this settling period.

Finally, for many of the currently trading independents, the breadth of the
competitive landscape may seem beyond their competitive reach. My likely
assumption is that (bar the already well-established set such as King James and
FoxP2) in the short to medium term independents will resort to far more specialised
competitive positioning. The anti-network story if you will is; “hugely creativity,
more agile, channel specific’. My concern is that at this point they will need more –
perhaps to champion niche technologies, innovations or emerging market segments.
A smart positioning will go a long way to attract client attention away from the guys
that claim to do everything (and well).

Of course with the multiple media reports and endless speculation around new
acquisitions, the best thing for all agencies to do now is to focus on their own path.
This may mean greater energy placed into agency strategy and vision by the
steering team. Getting caught up in all the hype will only serve to distract
businesses that, for the most part, were originally established with very specific
intent.

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