PR experts hopeful of business growth in 2021
By Ibidunni Banjoko
Year 2020 was a very challenging year for all organisations as belt-tightening measures were adopted to navigate the Covid-19 global pandemic. Companies that are successfully navigating the Covid-19 pandemic have often pivoted to a business model that’s conducive to short-term survival, long-term resilience and growth. The crisis of ensuring flexibility is critical and this is what every organisation focuses on.
Not all pivots, however, result in good business performance. Three conditions are necessary – firstly, pivots must align the firm with one or more of the long-term trends intensified by the pandemic. Secondly, pivots must come as a lateral extension of the firm’s existing capabilities, cementing not undermining its strategic intent. And thirdly, pivots must offer a sustainable path to profitability, one that preserves and enhances brand value in the mind of the consumer.
Within the PR industry, agencies are tied to the businesses of the brands. Therefore, agencies’ survival depends on the survival of the brands they manage. In view of these realities, MARKETING EDGE, Nigeria’s leading publication and brand-focused magazine explores the review and prediction for the PR industry on how agencies and brands can have a better year after a tumultuous year 2020.
In response to the enquiries of MARKETING EDGE, Israel Jaiye Opayemi, President, Public Relations Consultants Association of Nigeria (PRCAN) and MD of Chain Reactions Nigeria enthused that he always loves to begin with bad news so people can find some good comfort when he shares the good news eventually.
“I will start with the low point. The PR industry as a sub-set of the larger service industry was not immune to the effects of the pandemic on the economy. Indeed, the PR industry in Nigeria was severely impacted by the pandemic. I speak from my vantage point, firstly, as the President of the Public Relations Consultants Association of Nigeria (PRCAN) and secondly, as an operator by my position as the CEO of Chain Reactions Nigeria.
“As at the end of Q2 2020, the Nigerian economy was said to have contracted by 6.1% year on year. Don’t forget that that was the period we had just emerged from the full lockdown to some partial lockdown. So, expectedly, clients had suspended most brand campaigns. Those who managed to do anything at all focused more on Covid-19 pandemic awareness and CSR campaigns. In most cases, there was a near-total freeze on campaign budgets. Since there were no activities, some clients decided to either suspend the payment of retainer fees while some cancelled retainer clients with their PR firms. Thankfully, according to a survey conducted by PRCAN, only 19% of the 41 firms surveyed said clients actually declined to renew their contracts. No doubt, some were forced to downsize while others had to furlough some staff.”
Opayemi averred that the tough business climate was not peculiar to the Nigerian PR sector, warning that industry watchers should not generate some negative perception of Nigerian PR business owners as poor business people. “As a matter of fact, many Nigerian PR firms have shown admirable resilience. As of November, a global research carried out by Opinium with ICCO and Provoke on the pandemic’s impact on the communication industry showed that 62% of firms have had their campaigns cancelled, while another 61% were expecting a drop in their fee income 2020.
In his words: “According to that report, many of the agencies surveyed reported a dearth of new business. At least 46% reported a loss of earnings while nearly 40% said they had been invited to fewer pitches while another 35% said they have fewer retainers. The survey showed that more than one third, that is, 38% of the firms experienced payment delays. While we do not have the specific data for the exact percentage of those affected by payment delay in Nigeria, my gut feeling is that it might be higher than the global finding.
The sectoral chief also revealed: “A PRCAN survey conducted on May 13, 2020, in the heat of the pandemic, indicated that 19% of Nigerian PR firms surveyed expected that the pandemic would only affect their projected revenue by 20%. 44% said it would affect it by 30% while another 38% said they expected it to impact their projected revenue by 40%. Despite this huge impact, many have shown resilience.”
While speaking on the positive aspect, he noted: “From what I can see, those who have experienced the high points are mostly those who have followed the path of changing their business models. Historically, PR started with the agency model. But along the line, the consulting model evolved. Any PR company still running the agency model can’t make real money. The agency model confines you to just earning of commissions just the way estate agents earn commissions on sales or rent. The consulting model enables you to bill well and accordingly for your man-hours and your intellectual property. That is practically impossible with the agency model. It is based on a restricted percentage regardless of what that Brief demands from your workforce. It is either 10% or 15% you go home with. That agency model also makes you wait for the Briefs to come from the clients.
“With the consulting model, your thinking cap changes. Consultants see the struggle clients are going through, they put forward solutions, and they earn good money. That is the model we run in Chain Reactions Nigeria. We said to ourselves; we will help our clients cut through complexities. So, all through the difficult days of the pandemic, we were manufacturing balms for our clients’ pain-points. That has not only kept us in business; it has made a difference for us.”
While projecting that Nigeria will still be in the throes of the second wave of the pandemic, Opayemi expressed optimism that clients will still be looking for PR firms that can help them make sense of all of the big data being thrown up by the new normal. “They won’t be looking in the direction of agencies but consultants who can help them make sense of the big data, the trends and the evolving cultures in the market place and amongst consumers. The Government will be looking up to businesses to help with sensitisation of the populace on the need to be vaccinated. Nigerians are being fed with all manner of lies by pseudo subject matter experts who know next to nothing about virology and epidemiology. It is just common sense that vaccines kept many of us alive beyond age 5. Now, false prophets are telling people it is the anti-Christ agenda.
“That is a problem. But it is an opportunity for PR firms. Where am I going? The real money in Q1 2021 will be in Influencer Marketing. The National Coordinator of the Presidential Taskforce (PTF) on Covid-19, Dr. Sani Aliyu has said the vaccines will be here before the end of January. So, I see many PR firms being in business actively in Q1 of 2021.”
The CEO of Compact Communication Limited, Chuddy Oduenyi, on his part, stated that the pandemic has affected the national, continental and global economies, including businesses and individual lives. He added that it has affected marketing communications sub sectors and the PR industry reasoning that when there is a pinch in economy, the services industry always pays for it. “Within the service industry, the marketing communications industry will take the disadvantages of it. Whenever there is a slightest tremble, what people do is that they look at advertising and promotion budget (A&P) and see it as core central that should be curtailed. Not knowing that what they need is to step up their A&P budget to enable the brands to keep in touch with their client in a shrinking market that is so limited in self-definite power; but people don’t think that way. It is high time PR took it as a responsibility to educate the client about this.”
Oduenyi opined that the PR industry is essentially a creative and an idea business, adding that when there are challenges in the economy. a lot of people tend to reflect deeper, engage in self introspection and by so doing ideas will come. “I expect that there are going to be new ideas which the clients are going to find very attractive to make them move their consumer appreciation rating and continue business with the PR companies that service them. For PR companies, this year will certainly be better.”
For Bolaji Abimbola, the CEO of Integrated Indigo Limited, the economy may not possibly recover fully from the COVID-19 impact of last year, but many organizations and brands will still put emphasis on PR as the way of communicating to their target audiences in 2021. “PR and Advertising are doing far well than what they did last year. I project positive strength for the industry although it may not rebound completely in terms of full recovery, but the industry will get to a better point.”
Another PR practitioner, Olabode Adewale Eyiaro, the MD of Mist Digital Agency, noted that year 2020 entailed difficulty measuring business impacts, tightening budgets, lack of quantifiable measurements and engaging with relevant sources, tracking media mentions, compiling clips and building coverage reports, retaining the right talent and collaborating effectively with teams.
“The year 2020 wasn’t what we expect and we would have done anything to change it. The experience of this unprecedented year has taught us so much, but there is no vaccine to protect against the economic crisis. However, resilient, agile and creative brands and agencies will recover.
Here are my predictions for the Q1 in the year 2021. Marketing budgets will struggle to grow – budgets will continue to be directed to online channels. Brands will be seeking not just digital reach, but digitally-led experiential activations to attract and stay front of mind. Agencies, who know that you don’t need an IRL ‘stunt’ to be distinctive and build fame, will be awarded the chunky campaign budgets.
“Earned and social channels have been the lifeline for brand in 2020, marketing teams will have seen what they can deliver in many cases in isolation off other media channels during 2020. They are influential, agile authentic and can achieve cost-effective impact at both ends of the sales funnel. 2020 may have (finally) been the year they prove their role within the Omni channel mix.”
Eyiaro projected that plans will keep changing as the context changes, adding that 2020 was a pragmatic year until things become more predictable. “The brands (agencies) that win will be the ones that stay culturally relevant and in tune with the changing emotions and attitudes of their audience. Something that felt ‘right’ last week, could be so easily ‘wrong’ the next.
“Industry shakedown agency contracts were stretched to point of snapping in the year 2020 due to the pandemic and then the recession in Q3. This will create a peak of new business opportunities during Q1 of 2021, as marketing teams (should already have) reviewed their budgets, strategies and agency rosters.
“Agencies, who, during the crisis, have shown flexibility, transparency and a willingness to put their profit margins on furlough, will be rewarded this year with client retention. Others could find themselves on a hamster wheel of pitches for short-term projects as many brands apply a cautious approach to re-contracting and seeking to benefit from the hunger in the supply chain.”
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