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Scangroup issues alert as ex-executives poach Airtel
WPP Scangroup CEO Patricia Ithau speaks during the release of the group’s 2023/24 financial results at the Villa Rosa Kempinski Hotel in Nairobi on April 25, 2025.
Listed marketing firm WPP ScanGroup was on Wednesday forced to issue a cautionary notice to investors after its former staff snatched its top client, Airtel Africa, in a shift that could derail the turnaround of the firm.
The firm, in a public notice, said its subsidiary, Ogilvy Africa, had parted ways with Airtel Africa after 15 years of acting as the marketing and advertising agency of the telecoms operator across the continent.
Airtel Africa business accounted for nearly a fifth of WPP ScanGroup’s annual sales that stood at Sh2.4 billion last year, according to sources close to the firm, a size that required the Nairobi bourse-listed firm to publish the notice under regulatory material information rules.
The Airtel business has moved to rival French multinational agency Publicis Groupe Africa via its local affiliate The Partnership Africa, which was founded in 2023 by former WPP ScanGroup executives.
This is a blow to WPP ScanGroup whose sales have been falling over the past five years, culminating in the firm reporting a Sh506.7 million loss in the year to December 2024 from a net profit of Sh130 million in 2023.
The company, which was listed on the Nairobi Securities Exchange (NSE) in August 2006, has reported net losses in three of the last four financial years.
It reported its first-ever net loss of Sh37.9 million in 2021, breaking an uninterrupted run of profitability since its listing, a performance that has denied investors dividends since.
WPP ScanGroup’s description of the termination as a “material contract change” indicates that the loss of revenue will likely be significant on its books.
Capital Markets Authority (CMA) regulations demand firms issue a notice for changes in their business that might affect their financial position or significant movement of its share prices.
This information includes the acquisition or loss of a significant contract, says the CMA.
WPP Scangroup’s share price closed trading at Sh2.63 at the NSE compared to Tuesday’s close of Sh2.67, having shed 24.8 percent of its value over the past three months.
WPP Scangroup chief executive officer Patricia Ithau on Wednesday told the Business Daily that due to confidentiality obligations between the parties, the company could not disclose the specific commercial details of the Airtel contract, including its revenue contribution.
“However, it is important to note that Ogilvy Africa operates a diversified business model serving over 30 clients across multiple markets on the continent… The conclusion of any one client relationship, while significant, is part of the natural cycle of agency life, and our broad client portfolio positions us well for continued growth and resilience,” said Ms Ithau.
“It is important to clarify that this decision was not a reflection of performance, but rather a shift aligned with evolving business priorities and internal considerations, which is within the prerogative of all parties with long-standing partnerships.”
The firm has in recent years witnessed the exit of top executives who have opted to form rival boutique firms and do battle with their former employer.
In the case of Airtel, WPP ScanGroup is losing the contract to The Partnership Africa, which was founded by its former C-suite members who spent at least a decade each at the company.
The Partnership Africa’s chief executive officer, Sandeep Madan, headed WPP ScanGroup’s wholly owned subsidiaries Scanad Africa & J. Walter Thompson East Africa, between 2012 and 2023, having previously been CEO of Ogilvy Africa for a year and a half.
The company’s chief operations officer, Sally Sawe, served as managing director at Scanad and JW Thompson between 2015 and 2023.
The Partnership Africa’s chief creative officer, Deepesh Jha, held a similar role at Scanad between 2018 and 2023, and previously served as creative head at both Scanad and JW Thompson.
The founder of WPP ScanGroup and its former CEO, Bharat Thakrar, exited the firm in 2021 following a fallout and has sued the firm and its parent company, WPP Group, for $50 million (Sh6.4 billion), citing irregular removal.
WPP, the world’s largest advertising company, owns 57 percent of the Kenyan outfit.
When Ogilvy and Airtel Africa inked their public relations deal in 2010, it was considered one of the biggest advertising coups in years.
The deal’s size—although undisclosed—was deemed significant due to Airtel’s multi-country operation and the fact that the company was on the cusp of a major rebrand after acquiring Zain Africa’s mobile operations across 15 countries.
Two years earlier (in 2008), Zain’s own rebrand from Celtel had cost $28 million (Sh3.6 billion at today’s rate), while an earlier transformation of the company from KenCell to Celtel in 2004 had cost an estimated $30 million (Sh3.9 billion).
The marketing services provided by the public relations firms normally include media placements and advertising services, public relations, handling public affairs and brand management.
Market conditions have deteriorated for publicity firms in line with shifting market dynamics, which include a shift of revenue to digital firms such as US giants Google and Facebook.
The number of players in the market has also gone up over the years, leading to a fragmentation of the market and lower revenue for established players.
