Subscribe to industry newsletters

Bizcommunity has over 400 industry contributors and we always welcome further contributions and contributors.

A renaissance in the Mother City

The increase of agency mergers in Cape Town - the White House and Johannesburg's AM-C formed DDB SA, the 3D Agency and IMA came together as Blueprint, and Young & Rubicam acquiredTholet Sievers to form Y&R Tholet - has played a big role in the renaissance of Cape advertising which began last year.
The increase in of agency mergers in Cape Town - the White House and Johannesburg's AM-C formed DDB SA, the 3D Agency and IMA came together as Blueprint, and Young & Rubicam acquired Tholet Sievers to form Y&R Tholet - has played a big role in the renaissance of Cape advertising which began last year.

Add them to the Bull Calvert Pace start-up, the Bester Burke breakaway from Hunt Lascaris, and the re-launch of the once-staid Wilson Keller as Bosman Johnson, and you have the ingredients which have turned the Cape into the most active advertising market in SA. Estimates of its size range from 28% of national adspend to 32%, giving it R1,4bn-R1,6bn in billings.

In this simmering environment, a number of major accounts have moved. Some have been the result of mergers creating a new culture which clients are not always comfortable with. Others, perhaps, have been caught up in the excitement of change, which has stimulated a competitive mood in the Mother City.

Since its re-launch, Bosman Johnson has won around R25m in billings, including Southern Life and Pick 'n Pay Financial Services. The Jupiter Drawing Room Cape increased its billings by 80% last year and is budgeting for another R37m-R38m gain this year. Recent gains include Protea Hotels, Wool Board and Pharma Natura below-the-line. Sanlam, Bayer and Pep Stores have moved to Berry Bush BBDO, and Markhams to Bull Calvert Pace. Blueprint acquired Boland Bank, Norwich, Western Province Promotions, All Gold and Koo.

"This is the wild west," says Stefania Ianigro-Johnson, creative director of Bosman Johnson. "It makes Johannesburg look quiet."

Some agency bosses complain that ethics have also taken a knock. "Cape Town is a very incestuous marketplace," says one. "There is lots of rumour and innuendo which almost borders on the unethical. Competitive agencies try to undermine you. Confidentiality doesn't exist. When you go after new business everyone knows it."

The city is also being invaded by a flood of job-seeking creatives fleeing the crime-ridden angst of Johannesburg for the relative security and leisurely lifestyle of the Cape, even at the cost of lower salaries.

"We have a lot of people coming down from Jo'burg wanting to join the agency," says Jupiter Drawing Room MD Kevin Aspoas. "But they have this retirement image in their mind: work till four and then off to the beach. The reason we are successful is that we work harder than other agencies in Cape Town.

"There are too many garage operations. It seems to be a town of freelancers. That is what worries me about some of the breakaways. They just fragment the business. From a national perspective it may mean that people won't take Cape Town as seriously as they should."

But what's happened to the Cape's old boy network, which has always been notoriously hard to penetrate? Clients have always been slow to switch agencies and snail-like about accepting newcomers. "It takes at least two years to be accepted," says Dick Reed, who opened a branch of The Media Shop in Cape Town four years ago. "Then people seem to accept that you are here to stay and that you are one of them, and business starts to walk in the door."

But everyone agrees even that bucolic charm is beginning to change. "Cape Town clients are still more loyal than in Johannesburg, but not as loyal as they used to be," says Rob Berry, MD of Berry Bush BBDO, now the thirdbiggest agency in the Mother City. "Cape Town is changing."

Landman agrees that Cape Town has changed, probably for ever. But despite the large number of pitches last year, he says it remains relatively stable. "Accounts don't move that often. That's one reason why we have had an influx of agency staff. They are looking at stability in their work environment."

Young & Rubicam Tholet MD Ian MacFarlane, on the other hand, believes that because of downsizing and other structural changes, "the old boy network is coming apart. Internationals are coming in, so established relationships have gone. What they are looking for is efficient delivery of results."

The trouble with all this activity is that Cape Town is, by general consensus, over-traded. "There are only so many clients based down here," says Olaf Brinkman, MD of The Engine Room. "Unless more marketers come here, these agencies will not be able to survive. Everybody is pitching on every little account that's going. There will be seven or eight agencies pitching for R250(thin)000 worth of business."

In this environment, size becomes important. "You either have to be a small specialist or you must be fairly big," says Berry. "Otherwise, you can't compete." Blueprint MD Wilhelm Landman agrees. "There used to be too many small agencies. Following the mergers, there are three or four big agencies. They can compete better. With bigger resources they have a better fighting chance."

But, Berry concedes, competition is healthy. "When you get all these small agencies starting they always snipe at your business, so it makes you work harder."

One answer to the pitching frenzy is Jupiter's aristocratic approach. "We charge for pitches and 80% of the business we have won has been without a pitch," says Aspoas. "We suffer from a problem because people like to use us as a wild card. They will go for three mainstream agencies and us as a wild card and see what we come up with. But we haven't got time to play that role. If they want our input they will have to pay for it.

"Our first commitment is to our existing clients. If people come to this agency they must know that we are spending time on their business rather than spending time trying to wow others."

But Jupiter and other Cape agencies have had to look further afield for business if they are to maintain their growth. MacFarlane argues that Johannesburg business cannot be handled efficiently from the Cape. "Face-to-face engagement with the client is a critical success factor."

But Ian Calvert, of Bull Calvert Pace, disagrees. "We handle a London-based account with no communication problem, and if we can do that we can handle Johannesburg."

Aspoas, who handles three Johannesburg accounts from Cape Town, also sees no problem. "Less than a third of national adspend comes from Cape Town. That is why we have had to look elsewhere. We have to make sure that our service levels are as good as Johannesburg's. If we can do that we have the best of both worlds.

"The turnaround on our Business Day work is better than its previous Johannesburg agency achieved. We can turn around a job for Business Day in 12 hours."

MacFarlane frets, too, that the Cape market is structurally inefficient. "There is lots of business but it is in big parcels. There are many small players and a dissipation of talents. This is a corporate market, which needs big players. The marketing communications decisions made here by companies such as Old Mutual, Shell and Pick 'n Pay are not only about SA but about southern Africa. You need big infrastructure to cater for those needs.

"When you have so many people in the market it creates opportunity but it also detracts from the service and resources you need to be able to supply large corporate clients.

"Unlike Johannesburg, the Cape can't sustain a structure of large, medium and small agencies. Ours tend to be only large and small."

Comment

Related

News