The purpose of advertising agencies has long been debated. Are they purely in the business of creating, planning, and handling advertising (and sometimes other) forms of promotion and marketing?
Or has the remit now moved beyond that — to become a valued business partner, steeped in its client’s operations as well as providing intelligence and trend analysis that will profitably move the business needle?
Tebogo Skwambane believes in the latter and says ad agencies need to up their consulting and advisory skills.
She’s just been appointed SA country manager for the giant WPP group that counts among its agencies Ogilvy, Wunderman Thompson, VMLY&R and GroupM.
Globally, the group employs about 110,000 people and operates in more than 100 countries.
While competitors might argue the point, WPP in South Africa controls about 40% of the advertising and media market, and has a raft of blue-chip accounts, including Coca-Cola, Vodacom, Volkswagen South Africa, Unilever and BMW.
Her appointment — a new position — is surprising because WPP’s philosophy has always been to own agencies with a fiercely independent mindset which will compete if needs be, particularly when it comes to new business pitches.
Skwambane says: “There’s been a shift at WPP over the past few years from building and growing to consolidating brands in our stable and focusing on what their strategic priorities are, and I think the same is true here in South Africa. The aspiration is still to have network agencies that are independent and drive their own brands, but if there are other services and solutions clients are looking for, we have multidisciplinary offerings across multiple creative agencies.”
In terms of where advertising is heading, Skwambane tells the FM: “One key conversation is around the blurring of advisory-type services, and the industry could be underplaying the importance.”
Conventional wisdom suggests advertising agencies should focus more on strategic advisory services these days because it helps them to better understand their clients’ needs and develop effective strategies to reach their target audiences.
It also allows them to provide more comprehensive services that can help clients reach their business goals. Strategic advisory services can also give advertising agencies a better understanding of the competitive landscape, helping them identify new opportunities and develop effective strategies to capitalise on those opportunities. Additionally, they can lead agencies to a better understanding of their clients’ target audiences and help them find ways to reach them more effectively.
Skwambane says she sees that shift happening to an extent, but coming from a strategy consulting background she does not feel ad agencies are coming any closer to that position, or if they are seen as a big threat. “I feel there’s a shift in additional business lines and there’s a space for everybody, but it’s incumbent upon agencies to now play in that [advisory] space.”
Skwambane also has strong views on gender representation in the advertising industry and is committed to making this a priority.
She argues that while female representation is largely adequate in lower agency echelons, there is a squeeze once people start moving upwards to the apex of the management triangle.
Internationally, WPP has been listed for a fifth consecutive year in the Bloomberg Gender-Equality Index, but she says there is work to be done locally. “WPP certainly shows up well globally but when you come to South Africa, we have many women within our agencies but [they are] not represented sufficiently at senior level and that’s a problem. I think we kind of get squeezed once you get to senior management and executive roles, possibly because of lack of positions or simply time spent in the job by others.”
The South African and African advertising industry is in recovery mode. It’s estimated to be worth about R50bn, with an expected growth rate of about 5% year on year driven mainly by an increasing demand for digital advertising, as well as the continuing growth of the middle class. The industry also benefits from the increasing number of international brands investing in the continent.
That bullish outlook puts Skwambane in a good position to accelerate WPP’s entrenched market foothold. Creatively, the group is in a strong position. At the recent Loerie awards for creative excellence its agencies in South Africa won 40 awards, and three additional awards were won by WPP agencies across Africa, making WPP the holder of the largest number of finalists and winners of any company in the region.
Skwambane says her job will be to focus on sharpening business fundamentals by continuing agency transformation as well as listening and acting on the specific and changing needs of the group’s component businesses.
This article originally appeared in the FM.
