According to TBWA\South Africa CEO Derek Bouwer, TBWA is looking to acquire as many as six new agencies over the next year within the region. The group, which is owned by the Omnicom holding company recently acquired 80% of HDI Youth Marketers, the youth marketing agency and increased its stake in Openco from 30% to 51%. Though TBWA is far from the only group to be buying up companies left, right and centre in the region, Bouwer insists that the British multinational advertising and PR company will be taking a different approach to WPP and the Publicis Groupe.
TBWA is looking to acquire as many as six new agencies over the next year within the region
WPP has been focusing on increasing its digital footprint and expanding into emerging markets, whereas Publicis appears to be focused on reinvigorating its global brands in the region, which Bouwer calls “A salvage job.” Within the past year, WPP has bought into Cerebra and Native, and their JWT operating company also acquired a majority stake in The Hardy Boys. Grey, meanwhile, another of its operating companies, acquired a majority stake in The Volcano Group and took a controlling stake in Quirk. Publicis, meanwhile has had a busy few months, acquiring BrandsRock (which was merged with Saatchi & Saatchi), OwenKessel (merged with Leo Burnett) and Lighthouse Digital, which merged with the Starcom Mediavest Group. The group's Digitas LBi agency also acquired the digital agency Liquorice.
Derek Bouwer, CEO of TBWA\South Africa
Of course, its worth noting that TBWA is less well equipped than its larger rivals to deal with such a large volume of deals, and Bouwer is quick to point out that the group isn't using global mergers and acquisitions firms, but is driving acquisitions locally. It is also being more selective with its targets, generally eyeing up the number 1 or number 2 players in each sector. The intention is to build the business across multiple industry sectors and drive collaborations between the owned agencies in those sectors. The HDI acquisition filled a notable 'youth' gap in the group's business, which is particularly vital in the African region as a large proportion of the market is younger than 25.
The intention is to build the business across multiple industry sectors and drive collaborations between the owned agencies in those sectors
All future acquisitions will most likely be focused on expanding the group's footprint in the African region. Nigeria, Ghana, Angola and Mozambique are thought to be priority markets. As for what agencies TBWA will be interested in? Digital agencies are undoubtedly top of the agenda, but ultimately, the group is looking for quality over quantity and to foster a collaborative culture in the region. The first acquisition will probably be announced before the end of Q3 2014, with two more set to be announced by the end of the year and the rest assumed to be spread out over 2015.
Benjamin Hiorns is a freelance writer and musician from Kidderminster in the UK. He has family in South Africa, but has yet to visit.