Young & Rubicam Nairobi deal picture of changing media scene

Young & Rubicam (Y&R) chairman for Africa Yossi Schwartz was in Nairobi two weeks ago to finalise the marriage between Y&R and communication firm Creative Edge.  

Y&R is a member of WPP who also owns a piece of the Nairobi Securities Exchange-listed Scangroup. This shows the marketing and advertising industry is undergoing transformation. It also means that the communication sector is becoming more competitive with big players eyeing a bigger market share.

I met Yossi in Nairobi and asked him about the wisdom of the corporate move.

When explaining the basis of choosing Nairobi as the hub for East Africa, he stated that there are few places as attractive for investment as Nairobi. Though the company is established in South Africa, East Africa offers one of the most spectacular growth prospects in Africa. He compared the GDP growth of six per cent for Kenya compared to two per cent for South Africa.

Reports also quoted a PwC report showing the annual growth rate for Kenya media and entertainment at 16.3 per cent as one of the fastest in the world. Another recent report by PwC titled Into Africa about the continent’s megacities ranked Nairobi as number one investment destination which is consistent with Yossi’s perception.

Kenya has joined the ‘Lucky Seven’ successors of BRICs, Market Talk reported. Some readers disagreed. Yossi indicated that Nairobi is an interesting place whose people are welcoming and have a highly commercialised culture. The growing middle class and the strategic location also make Nairobi an attractive destination.

 I was wondering about what attracts one business to another in case of mergers, acquisitions and partnerships. Sometimes it is the assets while the people behind the business can also be an attraction. Yossi says the people come first and, therefore, found a brilliant talent at Creative Edge during the due diligence, which felt like that time you meet your first love.

It is for this reason that Pritel Patel, the owner manager of Creative Edge, will head the merged unit to be known as Creative Y&R.

When the rider is right you can be sure the horse will run a good race. The intention is to use Kenya as a hub for East Africa in addition to South Africa and West Africa hubs.  

I have met business owners and managers who seem not to worry much about competition. They argue that you are the best competitor to yourself by beating your own record. I heard Yossi mention that they are not here to compete with Scangroup, to which I wondered why.

He indicated that they will compete with Scangroup for business but the main aim is to broaden their presence in this market by offering what Y&R does best to a bigger audience.

Some of the Y&R tools to be made available to Creative Edge are the Brand Asset Valuator, which is widely used across the world even by non-clients, Lab store for shopper marketing and VML for global digital marketing expertise. Y&R has been in Kenya for many years and the new partnership is an expansion.

On digital migration he noted that in South Africa it was a rather boring event that happened smoothly without disrupting the media market unlike in Kenya. This seems to imply that content is going to remain King with the best attracting the most attention. 

Advertising and media are going through interesting times. Watch this space.

The writer is the marketing Director of SBO Research. [email protected], Twitter @bngahu.