VENTURES AFRICA – Following the success recorded in its South Africa network, London-based advertising agency, M&C Saatchi group, is planning to expand its coast in Africa by launching or acquiring affiliate offices in Nigeria and Kenya by 2013.
M&C Saatchi group is eyeing the African market due to the continents’ high growth market status. The company’s South Africa business which was established in 2010 in Cape Town and Johannesburg has recorded a tremendous growth over the years.
M&C Saatchi worldwide chief executive, Moray MacLennan noted that the South African agency though recorded a loss in its first year, it however turned a small profit in 2011 and is expected to do well in 2012.
He said, while margins are still substantially lower than in the European business he expects it will keep building to around 15 percent. Fast growth often translates into the use of more freelancers at a greater cost than permanent staff which impacts negatively on margins.
According to Marklives, the Interim Results for the six months ended 30 June 2012 the group reported like-for-like revenues up 146 percent to £2.8 million ($4.4 million) in the ME and Africa region and a profit of £33o, 000 ($529, 000).
MacLennan stated that the new agency will be driven from the M&C Saatchi Abel office in Cape Town, which is in the process of recruiting an executive to lead the initiative.
The M&C Saatchi chief said the company is not looking to “buy somebody who wanted to sell” but would rather buy an agency who wanted to join his network and grow within it.
He said M&C Saatchi will investigate the market in East and West Africa over the next 3-4 months and the new agency should open its doors before the end of next year. Although M&C Saatchi usually prefers to launch start-up offices and grow them organically it will fast-track the Africa business through affiliates and acquisitions.
M&C Saatchi is an international advertising agency network established in January 1995 by Maurice Saatchi and Charles Saatchi. It is listed on the London Stock Exchange (LSE) and the AIM Board.