It’s the age-old debate many professionals grapple with: enjoy a top-class lifestyle in the Mother City and take a few professional knocks as a result, or immerse yourself in the frenzied hub that is the City of Gold for the sake of your business and career. Can media agencies survive without a presence in Johannesburg? Tanya Farber finds out.
For media agencies, who typically rely on a bouquet of clients of varying sizes, Johannesburg has a strong magnetic pull, albeit that many of them start life on the somewhat quieter coastline.
When Carat SA won the coveted Media Agency of the Year at the AdReview awards in 2010, the facts and figures surrounding their meteoric rise sent out a clear message about being in the hub.
In August the previous year, the company had added a Johannesburg branch to its Cape Town ‘head office’.
Within five months, the Johannesburg agency had gained billings to the tune of R563 million. It then went on to launch a greater African network with hubs in Nigeria, Ghana and Kenya.
At the time, managing director Quinton Jones said the agency’s hard work had “just begun”, and that being innovative in a competitive industry was the only way of “staying relevant”.
The message being sent out to other media agencies seemed to be this: You won’t expand without going for the ‘gold’.
It is important to remember, however, that the two are always compared not only because they’re so different, but because of their common ground too: they are both at the top of the pile in terms of big cities in South Africa.
This means a Cape Town office should not be seen as a poor cousin to its Johannesburg counterpart.
Tanya Schreuder of Vizeum South Africa says, “Most big players do have sizeable offices in Cape Town due to the fact that many blue chip companies are based there.”
However, consensus among industry players is that at some point, Johannesburg becomes a must if growth is to be sustained.
For Vizeum, this turning point came along with a new client. “Our company was born out of Cape Town, and our Jo’burg clients were quite happy to be serviced from Cape Town,” explains Schreuder. “However, after two years in business we won the Cell C contract and opened up our Jo’burg office after that.”
According to Anne Dearnaley of Page Three Media: “The Johannesburg market is where the vast majority of business is, so in order to continually grow your business you need to tap into the market there.”
Schreuder concurs. “We were fully aware when we started the business that offices in Jo’burg would be a necessity for growth just due to the sheer size of the Jo’burg market,” she says.
Media agencies have to ensure that they’re in touch with the full extent of their clients’ footprint, whether it is local, provincial, or national.
In the case of Vizeum, says Schreuder, all their clients have a national presence, but of that, between 50% and 60% of their market is sitting in Gauteng.
The budgets in that area of the country are also larger. “Joburg obviously brings with it size,” she adds, “So you have a bigger base of clients with very large budgets. In Cape Town, sizeable pieces of business are fewer.”
But, she says, the ‘smaller’ clients are still an important part of their work.
“Having started our business in Cape Town, we appreciate small budgets and understand that a client spending R2 million or R200 million expects the same output.”
Chris Botha, CEO of The MediaShop, which has offices in Johannesburg, Cape Town and Durban, says that other ‘differences’ between the two cities – from a media agency perspective – can be overstated.
“The perception is that the Cape Town market is more relaxed and more digitally focused,” he says, “but I don’t buy it. I think both markets are advanced, fiercely competitive, and deal with the same dynamics. They are, in fact, incredibly similar.”
But, says Dearnaley, “Jo’burg is generally faster paced, decisions are made more quickly, and the market is slightly more aggressive than their coastal counterparts”.
So, one wonders, to what extent can the digital or virtual way of doing business cross the divide between a media agency and its client base located elsewhere?
Dearnaley says, “We have offices in Cape Town and Johannesburg, but technology allows us to interact with our clients wherever they are, and travel and technology can always bridge the distance divide as long as the quality of work reigns supreme.”
However, says Schreuder, physical presence gives one a distinct advantage.
“You cannot expect to play in the Jo’burg market if you don’t have presence there. Cape Town and Joburg differ dramatically when looking at markets where consumer insights can vary dramatically across both cities. It is therefore imperative to have an on-the-ground team that understands these differences.”
Interestingly, despite having set up shop in both cities, Schreuder still finds herself flying between the two.
“I do commute, even though my business partner Richard Procter is based in Joburg. We are actively growing our business there, and therefore I have a vested interest in the Jo’burg market.”
As a mother of a two-year-old and a five-year-old, “balancing all balls can become very challenging and exhausting”, says Schreuder, but because she has been doing it for a long time and is passionate about growing her business, she sees it as a necessary work lifestyle.
According to Botha, physical presence is more than just about time and convenience.
“The only upside to having a Joburg head office is that most clients and media owners have their head offices there,” he explains. “So this makes it easier to meet with both parties at the drop of a hat.”
The metro-specific argument also has no bearing on the expectations of the clients or the type of service they expect, and this point resonates across the board.
“When looking at servicing clients, there are really no differences,” says Schreuder, “as both cities insist on service excellence.”
Dearnaley agrees, saying that location is “not a measure of success”.
“The determinant is your quality of work, consistent delivery and returns on investment,” she says.
“Where an agency has its ‘head office’ is actually irrelevant,” says Botha. “Agencies – whether they are based in Cape Town, Johannesburg or Durban – need to run efficiently without relying or depending on their head office. Cape Town is as good or bad a place to have a head office as Johannesburg, Paris, Benoni or Bloemfontein.”
Perhaps that is easy to say, considering their head office is in Sandton.
Office space in Pofadder, anyone? N
This story was first published in the May 2012 edition of The Media magazine.