David Furlonger - OGILVY/GLOO MERGER: Digital to the core

ORIGINALLY PUBLISHED ON FINANCIAL MAIL

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IT HAS all the attributes of a takeover but Ogilvy & Mather (O&M) SA and Gloo Digital Design say their business arrangement, announced this week, is a merger in both spirit and practice.

O&M SA chair Nunu Ntshingila-Njeke says the deal will allow her group to entrench its reputation as SA’s most integrated marketing communications specialist. Gloo CEO Pete Case says his agency can develop in ways that would be impossible on its own.

O&M SA has bought 100% of Gloo, the multi award-winning agency founded by Case in 2005. Kagiso Media previously held 60%, and Case and his partners, 40%. The latter now own shares in O&M SA.

O&M SA already has digital divisions but Gloo will become the technology and innovation hub for all 15 companies within the group. Gloo’s senior Johannesburg staff will be integrated across the group, mainly into the digital and customer relationship management specialist OgilvyOne.

Gloo’s Cape Town office will remain a standalone agency, but with access to O&M’s international innovations resources. This is partly to keep the Gloo name alive in the market but also to minimise client clashes. Ntshingila-Njeke says the Gloo and O&M SA client lists include direct competitors so it makes sense to have these handled by separate entities. “We have had conversations with these clients and this is the best solution,” she says.

The two agencies also share some clients. “Without realising it, our staffs have already been getting to know one another,” says Case.

He will become O&M SA’s joint chief creative officer, joining Chris Gotz, the previous sole incumbent. Gotz is acknowledged as the creative driving force behind O&M Cape Town’s status as SA’s leading integrated marketing agency. It has led the industry in creating powerful brand messages through the combination of traditional advertising with digital, mobile, public relations, activation and other modern forms of marketing.

O&M SA CEO Abey Mokgwatsane says Case’s elevation signals the group’s intent to deepen integration into every corner of its business.

“Ogilvy is already effectively among SA’s top five digital agencies,” he says. “Gloo gives us deeper digital competence and the ability to integrate more seamlessly.”

Ntshingila-Njeke says the arrival of digital as a central communications force “radically changes how we deliver communications solutions to our clients in a world where platforms and channels have converged”. She adds: “We want to reach the future first.”

Gloo has been approached by other groups in the past. Most, says Case, still see digital as an add-on to their business and keep digital agencies “at arm’s length”. Case, who also becomes Gloo chairman, says O&M SA’s attraction is its genuine understanding of digital’s role at the core of communications. “We wanted someone who is already good at what we do. By fully merging into O&M, we are showing our intent to change the way communication is done.” Ntshingila-Njeke notes: “This is a merger between two entities at the forefront of their fields.”

Case has spoken in the past of turning Gloo into an integrated agency in its own right. But now he says: “That would take several years and we would have to surround ourselves with specialists.” Gloo and O&M SA share the same vision so it makes sense to do it together.

Without a bigger partner, he admits, there was a danger Gloo would eventually reach its growth ceiling. “We could have done what some agencies do, and mop up natural growth in the digital space. But that’s not what we are founded on. We always want to stay ahead of the game. We’re always looking for the next big step.”

There is also the prospect of business in the rest of Africa. Gloo has made some inroads with what Case calls the “suitcase approach” — offering digital services on an opportunistic basis — but that is not enough. “With Ogilvy’s network across the continent, the possibilities are endless,” he says.

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ABOUT DAVID FURLONGER

David Furlonger is an editor-at-large at the Financial Mail. He writes regularly on the motor industry, business education and communications. Before joining the FM, he worked for newspapers, news agencies and broadcasters in the UK, Australia and Zimbabwe.