The World: Emerging Africa gears up to join the world stage

With international brands (and footballers) arriving, can it shed its tag of 'advertising's forgotten continent'?

Little more than a year after becoming the newest member of South Africa's advertising diaspora, Mike Abel is heading home to rejoin an agency scene where he's long been a familiar figure to lead the latest phase of M&C Saatchi's global ambition.

Under the direction of Abel, formerly the chief operating officer of Ogilvy South Africa, the country's biggest agency, and, more recently, the head of M&C Saatchi's Australian operation, the UK-based group will set up in Johannesburg and Cape Town.

In doing so, it becomes the latest network to recognise the importance of being represented in what isn't only Africa's richest nation but the gateway to a continent on the verge of an economic awakening.

Meanwhile, there's the prospect of next summer's World Cup, hosted by South Africa, fuelling national pride and providing an economic fillip from which the country's marketing communications industry hopes to benefit.

"When it comes to advertising, Africa is the forgotten continent," Moray MacLennan, the M&C Saatchi worldwide chairman, says. "We've forgotten what an important emerging market it is."

It's also one with enormous potential that can largely be serviced out of South Africa. To the north lies Nigeria, a country of 120 million people and oil revenues to drive its growth. And what of Zimbabwe when it finally emerges from the regime of Robert Mugabe, the latest in a long line of despotic and incompetent leaders who have stifled the continent's economic progress for half a century?

"A lot of clients are now seeing Africa in general - and South Africa in particular - as a place to look at rather than run away from," John Hunt, one of the founders of TBWA\Hunt\Lascaris in Johannesburg, says. "They no longer see us as the 'doom and gloom' continent. They're now saying: 'This is where we can make a buck.'"

Graham Warsop, the UK-born group chairman of The Jupiter Drawing Room, South Africa's largest homegrown agency in which WPP has a 49 per cent stake, agrees: "This country is the powerhouse for the whole Southern Africa region. It's growing in strategic importance for agency networks and for advertisers."

Its emergence won't happen overnight. South Africa remains what Abel calls "a mesh of the First and Third Worlds". More than half of adults have a mobile phone, presenting a huge opportunity for advertisers - but almost half the homes still lack piped water.

This, coupled with the country's turbulent history, makes it understandable that South Africa's journey towards prosperity remains a faltering one. Corruption persists both inside and outside government and there's an ongoing talent shortage. Agencies continue having their best people poached by rivals abroad but find it hard replacing them with good local staff. This is a legacy of the apartheid years when the black community was poorly educated. Even those few who emerge with university degrees find client-side jobs more appealing than the poor starting salaries most agencies offer.

"Paucity of talent is a major problem for us," Glen Lomas, the DDB South Africa chief executive, admits. "We're at the wrong end of the continent and although our cities are large, they can't compete with London, New York or Paris."

On the plus side, the consequences of having to work with an apartheid system described by Hunt as "Orwellian in its absurdity" have gone for good.

Sixteen years after the collapse of apartheid, it's hard to imagine what it was like for agencies having to work within its constraints. There were two state TV channels - one for blacks, the other for whites. No black people could appear in commercials on the white channel and vice-versa.

Kate Robertson, the Euro RSCG UK group chairman, who began her agency career as an account executive at Lintas and JWT in Johannesburg, recalls how Unilever began rocking the boat with ads that mixed blacks and whites: "It created a hell of a fuss."

Fast-forward to 2009 and the scene is much changed. For a start, there's been a dramatic transformation in the structure of agencies, which, in common with other companies, must be at least 26 per cent owned by black stockholders, a move that's been reflected in a better balance of black staff in companies that were previously white bastions.

What's more, there's an emerging black middle class. Data from the market researcher TGI shows rapid growth in the number of black South Africans at the upper end of its living standards measure. They now account for 10 per cent of the country's urban population.

Simultaneously, brands have been piling into South Africa. In the 80s, consumers had just four beers from which to choose. Now there are around 30. They are being joined by luxury goods manufacturers alerted to the fact that the country is becoming more cosmopolitan with the arrival of more Europeans, particularly from the UK and Germany.

It's all grist to the mill for South African agencies. Even the largest of them are heavily dependent on domestic business because margins are often insufficient on their internationally aligned accounts.

"Brands are very important to South Africans, whatever their colour," Aubrey Malden, a partner at Johannesburg's Forensic Marketing, explains. "The trade embargos of the apartheid years meant that they saw very few. Now they love the choice."

Whether or not this trend is ushering in higher creative standards is an open question. For a country that accounts for just 0.6 per cent of the worldwide adspend, South African agencies punch above their weight at international awards. Indeed, they took three gold, three silver and seven bronze Lions at this year's Cannes festival.

Some observers see a distinct South African creative style emerging that no longer takes its cue from the UK. "Big emotive blockbuster advertising still works a treat in South Africa," Abel says. However, Matthew Bull, the founder of South Africa's Lowe Bull, thinks it lacks the adventure it had in the years immediately after the end of apartheid.

A major obstacle to progress has been the lack of a credible broadband system - described as "pathetic" by one agency boss - which has prevented digital from being properly exploited by marketers.

"I don't think our advertising has a clear personality yet but the World Cup might help define it a bit more clearly," Keith Shipley, the chief executive of Network BBDO in Cape Town, suggests.

That and much more is expected from next year's footballing extravaganza, whose marketing and chief commercial officer is Derek Carstens, a former Ogilvy senior executive who has been seconded from his role as the brand director at the First National Bank of South Africa.

The big question is what the country will do once it has the ball at its feet. Nobody is quite sure. "A lot of the money being spent by the advertising and media industries will fall away the following year," Bull says. "But it will allow the business to invest for the long term."

TOP-TEN SOUTH AFRICAN CREATIVE AGENCIES
Rank Agency Estimated billings pounds m
1 Ogilvy 30.9-38.6
2 DraftFCB 27.0-30.9
3 TBWA\SA 24.7-27.0
4 The Jupiter Drawing Room 22.6
5 Young & Rubicam Brands 20.9
6 Network BBDO 15.4-19.3
7 JWT 13.1-15.4
8= Grey Group 7.7-9.7
8= Saatchi & Saatchi 7.7-9.7
10 Lowe Bull 6.6
Source: Ad Review.

THE MARKET

- 87% of South African homes have electricity and 72 per cent have refrigerators.

- Six out of ten South African adults have access to a mobile phone, either owning, renting or using one.

- Income levels are improving with significantly fewer people now in the two lowest income brackets.

- More than 80 per cent of South African homes have TV sets.

- Almost 45 per cent of South African homes have DVD players.

- 47% of all South Africans over 16 read a newspaper. Total newspaper readership now stands at more than 14.8 million.

- Daily newspapers have a total readership of more than nine million. The Daily Sun is set to hit a five million readership figure. The Sowetan has significantly grown its readership to more than two million.

- Almost 40 per cent of South African adults read magazines. Total magazine readership is more than 12.2 million.

- 29m South Africans or 93.5 per cent of the adult population listen to radio.

- A 2007 survey measured 1,435 brands in 106 product categories.

Source: South African Advertising Research Foundation.

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