Admen worry on future as markets get eroded
The recently held Annual General Meeting of the Association of Advertising Agencies of Nigeria (AAAN) is arguably one of the most memorable for a lot of industry players.
Clearly, there were lots of issues agitating the minds of practitioners, but the biggest concern for most was the sustained loss of revenue, occasioned primarily by the macro-economic volatility, the weak regulatory environment, and most especially the recent incursion of the management consultancy firms into advertising practice using strategy as bait.
While the first two provoked some anger and frustration, it was however the activities of the consultancy firms that became the bigger talking point and got operators more agitated.
There was a sense of trepidation in the room as operators worried about the possibility of being edged out of their own domain and watching helplessly as their clients are baited away by the “superior” market insight and strategy from the management consultants.
In recent times consultancy firms like PWC, Deloitte, KMPG, having succeeded in elevating strategy into an art, are now exploring deeper into branding and taking over jobs that naturally fall within the terrain of the advertising agencies.
But unlike the practice in Europe and the United States where the big management consulting firms are buying up agencies, in Nigeria, they are ramping up marketing competences in-house, thus making them direct competitors to ad agencies.
This trend is one of the reasons the advertising agencies are lamenting.
“Before now all they do is come up with those big ideas and hand them over to clients, today they are acquiring advertising companies,” warned Tope Jemerigbe, CEO at DKK.
Rotimi Olaniyan, CEO Advantage, painted an even grimmer picture when he said the industry might be facing extinction.
“Whether we like it or not marketing communications is dying. And it’s dying fundamentally because of one issue – what is the question that you answer when you go to meet the client?”
Indeed the AGM, provided a veritable ambience for a convergence of thoughts and ideas on why an industry, which was once a shining city upon a hill is now fast losing glamour and prestige. Hundreds of agency executives from about 50 agencies crammed into the conference room of Golden Tulip in Festac, Lagos to discuss new possibilities.
They wanted a quick solution to the dwindling fortune of their industry. But at every point, the management consultancy firm became their punching bag.
But the consultants didn’t just emerge from nowhere; their encroachment into advertising started when they began to make a big deal of strategy and glamorized it to get clients attention. Little by little, they began pushing the boundaries, and with the help of technology, have been able to take up other functions beyond their traditional scope.
“So what used to be your hallow as an artist and copy writer have been eroded,” said Tunji Olugbodi CEO of Verdant Zeal Group.
Olugbodi also added that the industry was suffering because they left their flanks opened for the consultants to encroach upon by note given as much seriousness to strategy as they did creativity.
“We never rely on our own value the thought process and see how that thought process become money, even we as agency people downplay that real and emphasis creative, but what the consultants do is to elevate the strategy into an art and charge for it,” he said.
But there is more to the disruption, because businesses, facing pressure from reducing margin wanted more than what the traditional agencies offered. They wanted a different engagement model that could transform their marketing operation and result in direct bottom-line impact.
And like Olaniran said, “the consultant answers one of the most important questions that operate at the CEO or indeed board level and that is growth. And because they go in with that answer they will always be on the pecking order higher than us.”
But while this problem seems to be a global phenomenon, with management consulting firms like Accenture, PwC, KPMG, vigorously buying up marketing firms and full service advertising agencies, in Nigeria, the crisis has been exacerbated by economic recession. Because of the difficult business environment clients have cut down on marketing budget, other have sacked their agencies while some have are warehousing advertising competences in-house all in a bid to save cost and save their businesses from strangulation.
But despite these challenges, operators have insisted that the future for the advertising industry remains bright but for that to become possible, it must come out of its comfort zone and become more adventurous. “Just doing ideation and acting as creative vendors is not enough. If you want to have an impact you need to own the high-level business strategy, something that ad agencies have completely abdicated,” Avi Dan, CEO of Avidan Strategies said.
It seems like some Nigerian agencies are already thinking in this direction as a number of them have been beefing up their strategy department. The idea is that if the management consultants can do advertising, then agencies too can do strategy.
Insight Publicis, one of the country’s biggest agencies is already doing that with the appointment of Wole Ogundare, a top strategist with management consultancy experience, as its Client Service Director.
Sadly though, Ogundare only stayed for 14months before he was snapped up by one of Insight’s clients, Yudala, to become their CEO. Following the departure, the agency is now combing the management consulting sector for another talent to fill the position left behind by Ogundare. But one thing is sure, many other agencies are looking in that direction, in hope to safeguard their industry from the rampaging onslaught of the consulting firms
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