Fresh indications have emerged in the recent shifts in agency affiliation relationships in the industry especially as it concerns Insight Communications and Rosabel Advertising, two frontline, same generation agencies incidentally owned by two bosom friends of long standing relationship.
Brancrunch Broke the New Five Months Ago: Brandcrunch on November 21, 2013 had exclusively reported on the impending loss of the Publicis affiliations by Rosabel Group’s media agency - Starcom Media Vest and Rosabel LeoBurnett Advertising.
Responding to our enquiries on the story titled “Rosabel parts ways with Leo-Burnett, Insight may be next home to global network”, Mr. Ayo Oluwatosin, Group Managing Director, Rosabel Advertising had informed that the Rosabel group’s relationship with Publicis was intact and under no threat whatsoever. He says "To the best of my knowledge, Rosabel is the Leo-Burnett agency in Nigeria".
We Confirm the News Again: Contrary to this position recent investigations reveal that Publicis might have in the last couple of weeks officially informed Rosabel group (one of the country’s leading marketing communications groups) of its decision to part ways with it.
According to findings, the Paris based Publicis groupe had intended to increase its investment in the Nigerian market in view of the potential inherent in the economy. Hence, the initial decision was to invest in two frontline advertising groups in the Nigerian market. Out of these two Rosabel, its partner of over 16 years was said to have been chosen on the strength of its long standing relationship with the French giant while the global network was also talking to Insight Communications as a possible No.2. This initial intention possibly gives credence to Rosabel Group CEO’s initial show of optimism albeit response to our earlier enquiry.
Tough Decision but Business has to be Business: The tide was said to have turned while the talks were still on, no thanks to the much publicized and ground breaking merger between Publicis and Omnicom blocks of global networks of agencies. Investigation revealed that the global merger negatively affected Publicis’ initial plan to buy equity holdings in two frontline agencies in the country.
Hence, it became apparent that the new Publicis must make a rational business decision as regards which of these agencies penciled down to run with. According to findings, the owners of the global network of agencies (Publicis) found it very difficult to call it quits with the Rosabel group in view of the very successful relationships enjoyed by both partners over the last 16 years. “It was a tough decision to pull the plug on the relationship but a business decision had to be made”.
Winner-Takes-All as Pendulum Swings: In view of the group’s new found impetus to be more aggressive in prosecuting its African and global expansion policy, the Publicis’ team was said to have found it more pragmatic and business like working with the Troyka group’s structure and aggressive business stance. This was said to pull the final trigger on the 16 years old Publicis –Rosabel relationship. The change will reenact the winner-takes-all syndrome (which used to be a popular phrase in the industry) as event is bound to unfold in a couple of months.
In a bid to confirm the development, a source close to Insight who prefers anonymity, informs that Publicis indeed approached Insight for a ground breaking partnership but he could not disclose the status of the relationship right now. According to him, partnership of the intended magnitude do not just happen like that, due diligence has to done with Lawyers, Auditors and Accountants appointed to spear head the process. He noted that this is not just an ordinary affiliation but a real partnership in the real sense of the word.
Our source further submits that such relationship can only take-off after such due diligence has been completed and parties involved in the proposed relationship finally agree to proceed with the deal.
No wonder they were Sacrificed! It will be recalled that Insight recently agreed with Martin Sorrel’s WPP Network of agencies to severe its affiliation relationship with the Grey Network. Similarly, one of the group’s media independent shops, Media Perspectives lost its affiliation with Carat Worldwide to new comer, Media Fuse owned by Emeka Okeke, former founding Managing Director of Carat Media Perspectives. These series of network alignments and realignments are possibly to make way for Troyka Group to fully warehouse the Publicis brands as its full-fledged partner in Nigeria and also to leave room for seamless integration across a number specialist marketing service companies.
Brandcrunch sought the comments of Rosabel group’s CEO on the current development and its implications for his group and the industry at large. Mr. Oluwatosin’s response is as follows, “Thanks for your text. No comments. Absolutely no comments.” However, it is obvious from the foregoing that key companies in the group – Rosabel Advertising and Starcom Media will forfeit their affiliation arrangements with Leo Burnett and Starcom Media Vest respectively. Both being key performers in the Publicis package along with ‘accomplices’ like Saatchi & Saatchi, BBH and others as enumerated below will certainly shift base to Troyka group.
Between this and Scanad Episode: The arrangement which is expected to crystalise from the Insight – Publicis groupe’s agreement looks similar to what Scanad, a foreign agency wanted to do with WPP in Nigeria but the difference lies in the fact that the unfolding effort might translate to a right step in building institutions out of agencies in the country. According to a player who does not want to be seen as taking sides on this issue, it will probably gladden the industry and set it on a path of true capital injection, corporate governance and professionalism that will ensure continuity rather than the usually lopsided affiliation relationships. “The industry is most likely on the path to building world-class legacy institutions that will stand the test of time”, he says.
The Publicis' War Chest: According to information gathered on Publicis Groupe’s website, Maurice Levy leads the enterprise that is currently third world’s leading communications group. The Groupe offers a full range of services and skills through multiple interests and brands in different service sectors such as: Digital (DigitasLBi, Razorfish, Rosetta, VivaKi); Advertising (BBH, Leo Burnett, Publicis Worldwide, Saatchi & Saatchi); Public affairs /corporate communications and events (MSLGROUP); Media strategy, planning and buying (Starcom MediaVest Group and ZenithOptimedia) while in Healthcare communications it parades Publicis Healthcare Communications Group (PHCG), and finally, Brand Asset Production interest is named Prodigious. It has presence in 108 countries in six continents with professional staffers in excess of 62,000.
With all these to be controlled by Troyka at least when the due diligence is concluded, Dollars and Euros exchange hands (certainly lots of these stuffs) and final announcement made, then Troyka will warehouse Publicis groupe’s interests across all the marketing service offerings in the country. It also infers that Troyka will sit on and cut the shot on who gets affiliated to any of the Publicis’ companies in the Nigerian market. These privileges could only be enjoyed by companies that have become an integral part of the global network through very reasonable paid for equity interest.
Within the last two months, Publicis Groupe has acquired three agencies, two in South Africa – Owenkessel, a creative agency based in Johannesburg and Lighthouse Digital, a Digital Media Agency with offices in Jo’burg and Cape Town, South Africa while the other one is the Dallas, Texas based Hawkeye, a Data Driven Integrated Digital Agency to be aligned with Publicis North America, part of the Publicis Worldwide network. This demonstrates Groupe’s voracious acquisition spree across the world. This also underscores what is happening in Nigeria although the minders of the Troyka/Insight business have declined comments on the issue for now. But be sure we’ll keep you posted on this ground breaking development. Meanwhile, let's have your comments.