Scangroup Frees Advertising Division

By Godfrey Tung'wet Posted 14 July 2006 @ 07:43 pm EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - Scangroup, the soon-to-be listed marketing services company, has re-launched its advertising arm, making it autonomous in a move it says will speed up decision-making.

The changes include the appointment of Mr Tomas Omamo as the new general manager for McCann Kenya, marking the firm's move to new offices. Scangroup chief executive Bharat Thakrar said the separation will increase the creative output of McCann, by establishing a competitive operating environment for the agency.

"This will also help manage potential conflicts between clients and brands before they occur," Mr Thakrar told reporters on Thursday at his Nairobi offices. In 2003 Scangroup acquired the subsidiary, which was highly indebted then, from McCann-Erickson Worldwide.

Scangroup bought the business and the assets, but not the liabilities. "When we took over the franchise, the company was struggling and was deep in debt, but today McCann is back to profitability and contributing to overall Scangroup revenues," the CEO added.

However, the two companies signed an agreement for McCann Kenya to retain McCann-Erickson Franchise for East Africa. The agreement included Coca Cola, Mobil and Standard Chartered Bank in East Africa. On top of these companies, it now serves Nestle, Sarova Hotels, Triton Petroleum and Emirates.

For Coca Cola, the company handles their regional businesses across 23 countries in Africa. It develops and roll out all the Coca Cola advertising campaigns for these countries from Nairobi.

That is significant as we cater for a myriad of diverse languages, cultures and markets in Africa," Mr Omamo said. He noted that clients are no longer looking for just advertisement that will sell their products, but want to be able to change behaviour, perceptions and create a style that transcends age sets. "This is our challenge at McCann and in the wider Scangroup family," he said.

Scangroup has joined a growing list of companies expected to list at the Nairobi Stock Exchange. Capital Markets Authority last week approved Scangroup’s initial public offer (IPO), which is expected to raise over 10million representing a 43.4 per cent stake or 69 million shares. The offer opens next week.

In its prospectus, the firm says it is raising cash to reduce its loans exposure and interest charges. It also intends to maintain its recent acquisition and mergers frenzy that has seen it snap up a number of agencies that makes it the biggest advertising agency in the region.

The firm has set its sights on other African markets, especially in West and Central Africa. Analysts say the listing will also improve Scangroup's credentials, should it at some point need to raise money at the NSE.

Scangroup’s business is organized around a number of key subsidiaries that handle various aspects of marketing and communications.

They include media buying arm Media Initiative, advertising agency Lowe Scanad (operating in Kenya, Uganda and Tanzania), Thompson Kenya, Scanad Public Relations and activations and experiential marketing company, Draft Worldwide East Africa.

In the past Scangroup separated the creative and client servicing team within Lowe Scanad and McCann. But now the two have been physically separated to operate in different offices.