Lolu Akinwunmi warns Nigerian agencies against foreign affiliation partnerships
Group CEO of Prima Garnet Africa Mr. Lolu Akinwunmi has advised Nigeria marketing communications agencies to steer clear of foreign affiliations, as this could be detrimental to their businesses.
He said this at the recently held Annual General Meeting of the Association of Advertising Agencies of Nigeria where he stated that such relationships were exploitative in nature and do not favour the interest of local agencies. He advised that instead of affiliations, agencies should rather go for technical partnerships.
“Personally if you ask me and I am not speaking for anybody, I will never go into affiliation again. You can have technical partnership because you need to interact with people from other parts of the world but you cannot grow with the kind of affiliations that we have,” Mr. Akinwunmi said.
Mr. Akinwunmi spoke against the backdrop of his agency’s ill-fated affiliation alignment with Ogilvy Africa, which is now a member of the WPP Group. The relationship began on a healthy note for both parties, but trouble started when Ogilvy started demanding for a controlling stake in Prima Garnet, even though it was forbidden from doing such by APCON regulations.
Speaking during the AGM Mr. Akinwunmi said, “they wanted 51% and threatened that if we didn’t give them they were going to set up and all that.”
According to him, as soon as Ogilvy saw that Prima Garnet would not accept their offer, they started carrying out their threats by first withdrawing all the multinational accounts and it took an immediate and drastic toll on Prima Garnet’s finances and billing profile. “We dropped from a billing of about 9billion to 300million,” Akinwunmi said.
It was a Tsunami that shook Prima Garnet to its foundation and almost crashed the agency, which could no longer pay its bills or meet its obligation to staff and other stakeholders. Some of its best hands began to leave for rival companies. A thick dark cloud hung over the agency, as it’s rating and reputation took a beating.
So, in order to survive the ominous climate and stay afloat, the agency knew it had to shed its huge weight and take another look at its business template. “We knew that the model we were working on was wrong. We were spending too much, drivers were earning 3.2million per annum and all kinds of things that were not realistic. We had to go back to the drawing board” Akinwunmi explained.
So from a staff compliment of 103, Prima Garnet suddenly became nibbled, with only 23 staff on its payroll. That was also followed by a drastic cut in wages.
But the rock-bottom moment was a vital learning curve and It provided the chance for Prima Garnet to activate the restart button. “Within that period of challenges we knew that we had to start the company all over again. We had to restructure the company. Thank God we survived and we are back, but many other agencies could not survive, not because the managers of the agencies didn’t have good brains, but because the situation was tough.”
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