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4-Traders Homepage  >  Equities  >  Euronext Paris  >  PUBLICIS GROUPE    PUB   FR0000130577

Real-time Quote. Real-time Tradegate - 05/06 01:14:36 pm
63.695 EUR   -0.16%
05/04 PUBLICIS GROUPE : Troyka, Publicis equity partnership 'll revolution..
04/28 Britain's WPP boosted by leading role in U.S. 'reviewageddon'
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PUBLICIS GROUPE : Troyka, Publicis equity partnership 'll revolutionise marketing communications industry

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05/04/2016 | 09:34am CEST

Marketing matters

with Neta Nwosu

08023051444  •  netanwosu@yahoo.com

–Biodun Shobanjo, Chairman, Troyka Group

Biodun Shobanjo has struck another Nigeria's first. Doing big deals is second nature to the man who has built the sub-Saharan Africa's largest marketing communications group from scratch. His latest global stride in the acronym-stuffed quest for a bigger piece of the fast-growing marketing communication market is matchless.

On March 16, 2016 in far away Paris, Publicis Groupe announced an equity partnership with the communications arm of the Troyka Group, the first wholly integrated marketing communications service provider in West Africa, with a firm hold of its entire six agencies: Insight Communications, The Thinkshop, All Seasons Media, Media Perspectives, The Quadrant Company and Hotsauce.

Through this equity acquisition, Publicis Groupe will launch its network in Nigeria from within the Troyka Group, creating a powerful communications entity that will allow for competitive advantage across all areas of operation in the West African landscape.

Kevin Tromp, CEO of Publicis Africa Groupe's comments on the partnership depict the global reputation of Troyka Group in addition to his corporation's pride in the partnership. In his words: "The Troyka Group communication companies are the gold standard in Nigeria, with a range of long-term blue-chip client relationships, and a portfolio of multidisciplinary work that is world-class. We are very excited about the opportunities that this partnership presents for our clients, and believe that the combination of Publicis Groupe's global expertise and the Troyka Group's local strength will provide an unbeatable partnership in this challenging and fast developing market."

Troyka group especially through its advertising agency, Insight Communications, for the better part of its existence has been involved in one fruitful affiliation after the other. From Bates Worldwide, it entered into an affiliation with Grey and after 18 years the agency moved to WPP and now both Insight Communications and its parent organization are with Publicis Groupe. But one thing is clear.

A look at its antecedents reveals that theChairman of Troyka Group is not desperate to clinch a deal. That pact must fit into his drive to offer more "values" as well as "measurable" services to his clients and capacity building for his staff. Scratching his head, the man many describe as 'Big Daddy' of marketing communications said "For us at Troyka, it has always been about values and capacity building. I have just told you the reason why we didn't continue with WPP. Remember, we grew our own business on our own steam."

Shobanjo in this chat with MarketingMatters speaks on the recent Publicis deal and what this partnership portends for the industry. Excerpts.

Congratulations on the recent foreign equity partnership deal, which your organisation struck with Publicis Groupe. It is a big boost to the Marketing Communication industry in Nigeria, but why is it that an industry that has been in existence for over six decades is only experiencing this kind of development now?

People are naturally not given to change; they tend to want to hold on to certain practices, particularly those that have worked for them in the past and it doesn't just happen in our industry alone. Take for example the media, how many media houses in Nigeria have foreign equity participation in Nigeria? There is only one that I know of and that is AIT, despite the fact that the media industry is actually older than ours.

In what ways do you think this foreign equity partnership could impact on the industry?

Firstly, we will expect that it facilitates our acquisition of more skills, more knowledge, more tools, better systems and better processes. All these will affect the way we perform our tasks as well as our behaviours. It is also important I state here that we would not be the only organisation that will benefit from this partnership. The impact is expected to spread through the industry.

This deal will create platforms for other players in the industry to get trained. Apart from this, as the partnership reflects on the way we do our businesses, people would likely want to imitate us and sincerely, I don't have a problem with that. I suspect that it would also be a catalyst of some sort that would encourage other global players to come and participate here in Nigeria.

Your Organisation (Insight Communication) for the better part of its existence has been involved in one affiliation after another. From Bates Worldwide, you entered into an affiliation with Grey and after 18 years, you moved to WPP and now you are with Publicis Groupe. What informed these affiliations?

We were the first indigenous Marketing Communications organisation to become affiliated with a foreign agency and that is because we realised a long time ago the potentials such affiliations held. So, barely two years after we opened shop, we put pen to paper, signing the first affiliation deal with Bates Worldwide Inc. I can recall signing that contract, which gave birth to that affiliation in 1982 at 15/15 Broadway in New York with the then CEO of the entire group, Mr. Jack. Of course, the advantages were clear; everybody saw the impact. However, with the way multinationals then were evolving, ownership changed hands rapidly and suddenly we found ourselves with what everybody knows as Grey. What then happened at that time was that Grey approached us and we had a deal. We were with Grey for 18 years and within that period of time, we acquired Grey itself. We were also the first group that brought Saatchi & Saatchi global agency to Nigeria and that was in 1990.

At a stage, I became CEO; we started another discussion with Grey, but this time it was not about affiliation but about equity partnership. We looked at Grey, which had only one network among a whole lot of networks in WPP. The dynamics of the industry had changed and we felt that what Grey had to offer was not enough for us. So, we decided to take advantage of the whole network, we wanted to leverage on what WPP as a whole had to offer. To make it easier, the leadership then was willing to accept our conditions.

Initially, when we were negotiating, I came up with a 50/50% proposition, remember that as at that time, APCON had not come up with the regulation that said foreign agencies should not have more than 30% stake in any indigenous related company.

What do you think would have become of Troyka Group without these affiliations?

The major factor for us was that we realised that if we must go beyond the ordinary, we must first of all build capacity. As a result of these relationships, we have sent people to as far as Australia, because we identified a very good agency there. This was before South Africa was open (it was during the day of apartheid.) When these staff returned, they did their work with soaring confidence and increased knowledge, which meant enhanced capacity. Of course, this only happens when you have affiliates, who take you on board as a member of the family. Some agencies tend to draw the line and that is why partnership is better, because they put their money where their mouth is. When you enter into a partnership with another agency, their office becomes your office.

I would like you to differentiate between being in an affiliation and entering into an equity partnership? 

Affiliation is like having a relationship with something; so when asked, you could say "Oh! I have somebody in Nigeria or wherever that may be". When you are affiliated, you have put your foot at the door of the other organisation and by putting your foot at the door; the door opens to you slightly. For example, if they have a global client and that client is in your territory, they tell them they have a "dot", or if you like an affiliate in that country. However, they don't have control over your business or your operations; you run the business however way you like. You can go to them to ask for favours, but there is always a limit, solely because they don't have a stake in your business. So, anything they do for you is just a favour.

But being in an equity partnership is very different. They put money in your business and so, by implication, have equity in your business. Of course, all this is subject to the percentage allowed by industry regulators in the land where your agency is domiciled. Part of the agreement is that you subscribe to the way they do things, which is always about best practices. Before you can acquire such equity, you would have to upgrade to the standard of such multinationals. Before they acquire any equity, they send their own auditors to look at your books, you can't do things secretly. They sit on your board and make all the decisions with you.

The second thing is that they must have enough confidence in your country, before they come in to invest. They consider factors like democracy and the issue of corruption. They want to be sure the government of the day is addressing corruption in that country (the current anti-corruption drive by President Buhari really encouraged them to invest).

In 109 countries, Publicis have about 75,000 seasoned professionals and several massive agencies, all within its group. They have several digital media agencies; PR outfits, etc. and by reason of this deal, we have access to all these outfits and personnel. Any of these professionals can come to this country and share their experience and knowledge with us. This is a massive move.

I overheard you on the day you were announcing the partnership saying that Publicis Groupe is the third largest agency in the world. Why didn't you push for partnership with the No. 1? What factors did you consider before opting for Publicis?

For us at Insight, it has never been about ranking, but about values. I have just told you the reason we didn't continue with WPP. The manner at which WPP treated its partners in Nigeria did not sink in well with us. Not that we are being judgmental, but were not comfortable with it.

Secondly, WPP was not satisfied with the 50% equity it had with us, it wanted more and when asked why, they said they wanted to consolidate. Why should we relinquish majority shares to them? Remember, we grew our own business on our own steam. We compared that with Publicis, a company that has been around for over 90 years. It was founded then by a 20-year old, who, within three years of starting out, acquired his own private jet and grew the business. Beginning from France, it spread through the whole of Europe. In the 90 years of its existence, it has only had two (2) CEOs and the second CEO has been with the company for over 40 years. We could identify with this, because it had a semblance with our company. Also, the daughter of the founder is the Chairman and one of the grandsons is a part of the board, so you can see values. Their mentality is different; for them, it has always been about people. We are at home with this priority. The first time I met with the CEO it was as if we have been friends for a long time. Clearly, we felt comfortable with the values they held dear.

Between 2012 and 2013, Publicis had a relationship with Rosabel …

They had an affiliate relationship…

Around 2014 we had rumours that you had severed your relationship with WPP and had connected with Publicis, how did you arrive at this deal?

At that time (2014) we were still talking, but all the same, there is no secret about it. We believe in transparency. In 2010, after we and WPP had come to a point where we needed to review our relationship, which, of course, fell through, we started looking at other global agencies and then the Publicis Groupe approached us. However, because we knew they had an existing relationship with Rosabel, we declined. We made them understand that the guys at Rosabel were our friends, but then we were informed what they (Publicis) actually wanted from the start was to have two partner agencies in Nigeria. So, that was how we progressed with our discussion.

We need to put it in proper perspective that our discussion went on for over three years; so, it wasn't something we just jumped at. It was very painstakingly done. So, after a lot of discussions, they finally decided that they wanted only one partner in Nigeria and whichever partners they chose, they would be acquiring equity in them. They told both of us (Insight and Rosabel) this and believe me, while this process lasted, for conscience sake, I actually prayed that they choose Rosabel, but by the time they came back, it was our group that they chose to continue discussion with. So, there was nothing to hide.

As it were today, you are like the "Big Daddy" of Marketing Communications and PR in Nigeria; would you like to tell us about the strategy your organisation adopted for growth and sustenance? 

From outset, we have always wanted our clients' brands to be the market leaders. So, the first thing we do is to make sure we partner with them so their brands could grow and keep recording successes. Because when they grow, we also grow.

Also, at the heart of this growth will be people. Our emphasis has always been on our people, because if they don't bring superior proposition to the table, the process to drive the growth of our clients' businesses or brands won't be possible. So, we ensure that we employ the best hands and that we constantly motivate them, so they can even go beyond their own expectations. That way in the end, we would be able to deliver more than we had promised our clients on a regular basis. That is our strategy.

How is the Marketing Communications industry in the country faring?

As a stakeholder in the industry, it has always been my interest to regularly take a look at the industry. There are people who have raised some concerns about the industry lately; they are worried about the quality of industry practitioners. There are a lot of young men and women who come to us fresh from school and enthusiastic, but that is not enough if you must deliver value. So, we have to keep training them. You can't get people straight from school, who will hit the ground running; so, you have to find them, train them, motivate them and expose them, but how many people are doing that in the industry? This is the challenge. If you are not able to bridge the gap, you will find out that if the client is sitting on one extreme, they would be sitting on the other. The client and service-givers are supposed to be in sync, you know, be of one mind.

I would like you to share with us what it would take to be another 'Biodun Shobanjo'. What are the unique features you would say you have or adopted that prepared you for success in this industry? 

People who behave the way I do are really not popular. If you are driven the way I am, that is, you always want to be number one, a lot of people are not going to like you. Being number one is not your birthright; you have to work for it. People used to laugh at us back then. I can remember vividly that when I left my job, people felt I wasn't serious, because then I was the Deputy Managing Director of an organisation, which was doing very well. They usually asked "What else do you want?" Grant Advertising was the place to be. Our situation then was like a David and Goliath thing, but we (in little Insight) were not scared. Do you know that most of the companies calling the shots back then are now dead?

You need to have the mentality to challenge for number one position, to be the best and we are still working on it. It is a work in progress; we haven't gotten to our destination yet, even though we have been number one for a very long time now. We want to be one of the best in the world and that is the beauty of this partnership. It is a very tall order, but we will get there. You don't need a god-father. I didn't have one; all I had was the sheer guts to succeed.

(c) 2016 The Sun Publishing Limited. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

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