A fierce battle has erupted in Uganda’s advertising industry, as global powerhouse M&C Saatchi Group edges out local agency CTA Space Ltd for a coveted advertising contract with MTN Uganda, one of the country’s largest telecommunications companies.
The contract, highly sought after due to MTN Uganda’s vast customer base and extensive service offerings, represents one of the most significant advertising opportunities on the continent. With a retainer revenue of up to UGX 300 million (USD 80,000) per month, the MTN account is a game-changer for any agency that secures it.
The Backstory
In 2023, MTN Uganda launched a thematic campaign, “Together, we’re unstoppable,” which celebrated the resilience and creativity of Ugandans. For Twaha Kakaire, the Managing Director of CTA Space Ltd, this campaign resonated deeply with his agency’s mission. Eager to participate, CTA Space Ltd partnered with M&C Saatchi Abel, the South African branch of the global M&C Saatchi Group, in the pitching process to secure the MTN account across Africa.
On September 8, 2023, CTA Space Ltd and M&C Saatchi Abel signed a Memorandum of Understanding (MOU) to outline the terms of their collaboration during the pitch process. The understanding was that CTA Space would serve as the local affiliate, handling the Ugandan market if the bid was successful.
M&C Saatchi Abel ultimately won the pitch, with CTA Space Ltd contributing its credentials and rate cards. However, things took a turn when, on April 22, 2024, M&C Saatchi Abel informed CTA Space that they had been appointed as MTN’s new marketing services partner across all its African markets. The implication was that CTA Space Ltd would be responsible for the Ugandan market, working directly with MTN Uganda.
Broken Promises
Despite CTA Space Ltd’s contributions, M&C Saatchi Abel reneged on their agreement and instead appointed CreateAbuzz Communications, another agency, to handle the MTN Uganda account. This decision was communicated to CTA Space Ltd in an email from Nival Maharaj, M&C Saatchi Abel’s new business project director, on June 28, 2024.
Maharaj claimed that MTN Uganda’s procurement team had rejected CTA Space due to concerns about the agency’s scale and capability. “MTN wants to start off with an agency that is more established,” the email stated. However, CTA Space Ltd’s own investigations suggest that M&C Saatchi’s claims may not be entirely accurate.
The Legal Fallout
Feeling betrayed, CTA Space Ltd reached out to Jacques Burger, CEO of M&C Saatchi Abel, seeking clarification. However, Burger dismissed the agency’s concerns, stating, “The MOU doesn’t commit to any obligations from ourselves beyond putting yourselves forward as our affiliate partner in the Uganda market.”
Burger went on to downplay CTA Space Ltd’s contributions to the pitch, stating that the agency had not provided any strategic or creative input and had only submitted a rate card and credentials document. He also aligned M&C Saatchi with MTN Uganda’s view that CTA Space was not an ideal partner for the account.
As a result, CTA Space Ltd has taken legal steps to address what they see as an unjust exclusion from the contract. The agency has communicated its dissatisfaction to M&C Saatchi Abel and has also notified MTN, urging the telecom giant to defer any formal agreements with CreateAbuzz Communications until the matter is resolved.
A Growing Concern for Local Agencies
This situation highlights the challenges local agencies face when competing against global firms for major contracts. For CTA Space Ltd, a young agency that has worked with global brands like Bic, MultiChoice, and P&G in Uganda, losing out on the MTN account is a significant blow.
“We saw this MTN contract as a huge turning point for the business and a chance to showcase what we can do with an iconic brand like MTN,” said Twaha Kakaire. “We did everything right to make sure it comes home.”
Kakaire believes that the procurement injustices faced by local agencies need to be exposed and eradicated, ensuring that Ugandan businesses have a fair shot at competing for large accounts.
As the legal battle unfolds, the outcome will be closely watched by many in Uganda’s business community, as it could set a precedent for how local agencies are treated by global firms in the future.
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