There is such a huge creative opportunity in Nigeria – Dawn Rowlands
How will you assess the Nigerian economy and, of course, the Nigerian marketing environment?
What I have noticed in the last three or four months that I have been in Nigeria is that people are talking themselves into recession. I have never seen any negativity in Nigeria ever. This is an incredibly positive country with incredibly resilient people. Think about your past situation and the many things this country has been through to get to this point, the negativity surprises me a little bit. Because your level of nationalism and your resilience to keep pushing forward seem to have taken a little bit of knocks. I think in a recession you can either decide to participate or not to participate. And if you allow yourself to become negative and start thinking about a shrinking business or shrinking environment, it is going to happen to you. You better spend time to think about how you are going to offer more value to clients and consumers. How you can help them save more money and defend their margin, as they say. Usually, the media is often the biggest single purchase that any brand or company makes. It is probably bigger that their salary bill. And if you can help them save and defend their margins, you will come out of the recession in a stronger position. So it’s not just about standing bye and watching clients cut their budgets and complaining. You have to help the clients to defend their margins. That is why people advertise.
As a top global business executive, what is your take on the current micro and macroeconomic challenges the Nigerian nation and its economy are going through?
For the Nigerian economy, I think the dollar fluctuations have had a massive impact on the cost of buying raw materials for a lot of clients. The volatility is not good. It doesn’t send a good message to the world about investments in Nigeria. But at the same time this is still one of the biggest economies and one of the fastest growing. So, what you see as a recession here is, in Europe, like sunshine, because their growth rates are minuscule compared to the Nigerian growth rate. So it’s all relative in terms of where you are coming from. If you are an outsider, the growth rate in Nigeria is still positive. If you are living in Europe, then Nigeria looks very attractive. That is why I said that I am a little bit concerned about how Nigerians are reacting to this and the kind of negativity I see. Don’t talk yourself into further recession. You can say as a business, we are going to help the clients to defend their margins and grow their businesses in these tough times. I have seen this happen many times, especially in South Africa.
As an outsider looking in, therefore, I think this is a momentary blip in your economy. I think that the changes that your country is going through right now, though difficult, must be a good thing, because it will drive manufacturing, tourism, and the like. And you have got a stunning environment. There is a huge opportunity for tourism here, beautiful forests, natural landscapes, animals; people pay a lot of money to see these. I think if you look at your natural resources and the capability of the people in the area of education, there is so much that can be achieved. No doubt, necessity is the mother of invention. So when times are tough that is when people start racking their brains and thinking about how to do things differently. That is why we have succeeded here. We have looked at the market and the landscape and asked ourselves, ‘how do we do things differently and better because that is how you succeed. You can do the same thing your competitors do, but if you do things differently and you have a different environment, you create different brand proposition and offer value, customers will leave your competitors and come to you. Though you don’t have to always come up with something completely new, you just have to do it different and better to succeed. Sometimes a recession is a good thing because it puts us under pressure to look for a solution. So for us, the recession has been a fantastic thing.
In a season of recession like the nation is currently under-going, the general tendency is for brand owners and advertisers to cut marketing and advertising budgets. Do you see this as a reasonable option? If yes, why, if not how?
In a recession, you need to start thinking about consumers and the fact that they have less money to spend. They are going to start making choices about what they are buying. You want to make sure that you are one of those choices. Also, how do you add value to the consumer during this time and how do you make sure that you understand the difficulties that they are going through. And many clients cut their budgets during recession. But I have two or three banks over the last 10 or 15 years that I have been in this industry who have increased their budgets during recession and have come out at the end of the recession as market leaders. So many people are trying to defend their bottom-line as opposed to investing more in the business; they have to make an investment decision based on where they want to be in a long time. Like I said, the recession is a momentary thing. The oil price is beginning to increase again, but my hope is that Nigeria is going to learn a lesson from this and limit its risk beyond oil. You have got amazing technology capability, but no one is driving that. You have a lot of educated people, I don’t know if you have this level of educated people in any other country. It astounds me, actually. You are sitting on a goldmine here.
Why is your global network keen on doing business and even expanding your take in the Nigerian economy at this time?
It depends on where you are sitting, if you are sitting with very low growth rate, you need to expand your exposure to emerging markets and to get the kind of growth that you need in your business. And if you are a big multinational, you are thinking about how you can extend those businesses. And the reality is that many of these multinationals don’t quite think it through properly. They will arrive at a country and look at the product range that they have and say ‘how do we take this product range and sell it to Nigerians?’ Instead of saying, we’ll invest in research and development in the market and truly understand what Nigerians are looking for. So, if India and Africa and the Middle East are going to be the next frontiers, why are we not investing in research and development in bespoke hair care ranges, bespoke skin care ranges, etc? It is just a very Eurocentric approach. If you look at the success of Orijin for example, that is a truly West African idea and it’s obvious that the brand is going to be successful. So, I think there has to be a lot more investment into developing brands specifically for these countries.
Feelers emanating from the industry have revealed that Dentsu Aegis have for long been prospecting for a creative agency to acquire or affiliate with for years. Can you tell us why it took you this while?
We worked for the Troyka Group for four years; we tried to acquire the business at that stage we didn’t have a creative offering. After we were acquired by Dentsu, we spoke to Troyka Group about it. It became very clear that we were never ever going to conclude the deal with them. And we agreed to part company on the basis that we had plans for the markets that we work with. We obviously then focused on our core and we agreed with Emeka that we’ll get that up and running properly for at least 18 months before actually focusing on the creative business. We are now a successful business, so we can afford to spend some time focusing on other things. If you don’t have a ruthless focus on your end goals you will get lost on your way. So we have been very strategic about the timing and how we approach this. We haven’t spoken to everybody in the market and we have had a look around and we’ve been very strategic about choosing who we want to work with based on integrity and creative capabilities of the agency. So we haven’t gone out there and danced with everybody on the dance floor. We’ve been very strategic. We think that we are a very attractive partner and we zeroed in on the people that we thought were the best in the market place.
I think what happens with the affiliation model which is, you invest in agency relationship, you invest in client relationship, but when there is a problem with the client, a global client, they phone me. And I phone Emeka, and tell him there is a problem and we need to fix it. How do we drive capability, how do we actually solve the clients’ problems? So you have to work together in that regard. If you are an affiliate and you phone me for help, it actually doesn’t cover your cost. That is the reality. I am not investing in the business; I am investing in the relationship with the client, not with the affiliate. We said that the minute we started working in all the different markets. So we prefer to move from affiliation relationship straight into an acquisition relationship and to have equity in the business, and to be able to make decision together.
If you look at all of our businesses across the region that we own equity in, we have a quarterly executive meeting. The next one is actually holding in Nigeria. We just had one in Kenya. All of the CEOs and CFOs from the region meet every quarter. Why? Because the things that Kenya is going through right now, Nigeria has been through it. The things that Ghana is going through South Africa has been through it. And we have created a team of people who have a common vision and that is to win in Africa. They share their story, they help each other, and they work together. It’s a team and I don’t think that there is any other network that has managed to create that. And we are the only agency that invests in bespoke research. Why? It is because we believe in the investment that we are making in the clients’ businesses.
Which are the creative agencies that your network once courted but never engaged?
In terms of courting agencies we haven’t really courted agencies. We have tried to find that most attractive person in the room and we have decided to dance with them. And I think we have got a lot to offer. That chemistry to me is more important than numbers. The numbers are one-third of that, but with the right level of intentions and passion you can achieve anything.
Why did those initial efforts fail?
We didn’t approach anybody else from the creative perspective in Nigeria. Our initial efforts to acquire Media Perspectives failed because we could not acquire the business and we walked away from it. We have only had one other partner in the market place.
How did you manage the discussion that finally resulted in this new union?
Our discussion was very strategic, very limited and we did our homework. We looked up the quality of the creative works coming out of Nigeria. We also looked at the works submitted by Nigerian agencies at Loeries, Cannes. So we had an idea of the quality of the work and who was delivering them. So it was a very respectful conversation. We told them we liked what they were doing and what they stood for. So we haven’t been talking to many agencies. And frankly we have actually avoided that because we have had people approaching us, but we haven’t engaged with them. We didn’t think that going about looking for partners was the right approach. And let’s be honest, Dentsu Aegis is an amazing brand, you only get to launch it once in a country. In South Africa, we don’t currently have a creative business and we have spent the last two years having a good look at the market and we are pretty close to making an announcement.
What is Dentsu Aegis’ real intention on this new business frontier expansion?
Our real intention is to service clients consistently. We want to be able to walk into boardrooms in London and stand there next to a market like Russia and be as equally important. That means you have to make a decision. When I first met Emeka I told him, you’ve got to decide, do you want to be a small fish in a big pond or do you want to be a big fish in a small pond. If you want to succeed, you cannot limit your goals to Nigeria, you have got to set your goal at being the best in the world. And you have got to focus on that ruthlessly. I can confidently send Emeka, or anybody from his team to London to represent a client and not worry for one minute that they are actually going to do the best job. They will, because they have been inspired to operate at the global level.
We launched CCS, which is our bespoke research agency, here about three months ago, the work that is coming out of Nigeria from this team is better than some of the work we are doing in South Africa. So, I can say that our objective is to create a consistent environment that is amazing.
As Africans we are always thinking that some people outside are better. We have got to stop that . we have to stop thinking that we cannot compete at that level. We can! And the other reality here is that there are fewer rules in terms of how people have always done things. In the European market, their distribution is already defined. Their marketing approach is completely defined. How you work with the media is completely defined. Your scope for creativity is hugely diminished in that environment. So Africa is where people can do their best works. This is where agencies can win global awards in places like Cannes because they just have fewer restrictions. Also, the necessity for digital innovations here is much bigger than in Europe. So our biggest objective is to be able to put Sub-Saharan Africa on the map and be consistent.
How would you determine what equity you will invest in the new partnership may be at the end of the one year experimentation?
We look at the market regulations and we based our decisions on that. So, obviously from APCON perspectives to be a local agency, you need to have 75 percent of ownership. We think at this stage and the maturity of the market, that is reasonable. And over a longer period, that might change. But right now, in terms of partnership that we have and the type of systems that we set up with Emeka, and from a reporting perspective we can see directly into the entire business in Nigeria, Ghana, South Africa, Tanzania, Uganda. And it’s not that we don’t trust people or that we bother about compliance; we are not. But we want to be able to accumulate data and information quickly and show clients a dashboard. If someone is sitting in Geneva and they want to know what I spent to buy media last year – did I spend more or less? which media are the most effective in Africa? how do I get a bit of a deal out of Google? they need that data. and currently, there is no other agency that can give them that data 24/7; so we took a decision before we make investment into each country that we’ll chose one system that we’ll work on and so everybody from South Africa, Ghana, Uganda, Tanzania, Kenya and all the businesses that we have equity stakes in at the moment are all working on the system.
The system is democratized because access is available to everybody. It has changed our business in terms of how people work and collaborate together. I am just one person, I can’t have people coming to me all the time and asking me to link them up with people; you have to democratize that information if you want to grow people quickly.
What is the volume of investments you are looking at in future?
We look at this by country and we look at the opportunities in those countries and then we deliver a strategy for the country. I think people like working with us because we have multiple businesses. It’s not like in WPP or Publicis. Publicis has a very linear set of businesses, if you are in one agency brand; there is probably not a good chance that you are a shareholder in another agency brand within the same group. We like to be more entrepreneurial and give people more opportunities to expand and grow the business. It has been very successful for us. But with regards the volume of investment, I don’t see their investment going down. The reason for that is we have proven that we can make success story out of Nigeria, which many people see as one of the toughest environment to do business, unfairly so I think. So I see our volume of investment accelerating. We can show the shareholders exactly what we are doing here.
With your existing relationship in Nigeria through Media Fuse Carat, what is Dentsu Aegis’ current investment profile and value?
We can’t tell you what the size and value is. Obviously, it is confidential. But our equity is 25 percent and as Emeka explained yesterday (the day before this interview), we do have very strong board representation as a minority there and we have built a very solid and compliant business that clients and our shareholders can trust; and Emeka has been very clever with that, like I said, in terms of democratizing information and making things transparent. If you are in an environment where nothing is transparent and suddenly you make everything transparent, it changes the game for everybody. I think he has been very smart about that. The value of our relationship here is more than monetary. As I have said, it’s proven in the biggest market in Africa, we can run a business compliantly, transparently and successfully and do some of the best works. I have no doubt that in the next 3-5 years, Nigeria is going to rise and actually claim all of the top awards at these advertising festivals. You have got the capability here. You just need exposure and inspiration.
How has your previous investments in the Nigerian agency impacted on your group’s global annual billing?
Significantly. I can’t tell you the exact amount, but I can tell you that it is significant. Two years ago South Africa accounted for 90 percent of our revenue and profit, but where we are right now, between Kenya, Uganda, Tanzania, Nigeria and Ghana, South Africa is 50 percent of our revenue and profit. Nigeria specifically, I can’t give you the exact number, but it’s significant and it is accelerating. But once the Nigerian market fully embraces digital, I think it will accelerate faster. So we are taking it very seriously for two reasons; the monetary part of it. The biggest part is actually to prove that as Africa we can deliver the same level of profit, same level of reliability, same level of consistency, same level of professionalism as in European market. I want our team to sit at the table with the big boys and not just be thought of as one of those Africans. I want people to take us seriously.
What is your global annual billing?
You can have a look at Dentsu Inc to get an idea of the billing. It’s massive. Just go online you will see it. But what I can tell you is that we are growing at two and half time faster than out competitor did. We want to double our business in the next two years globally, and I think we are well on track to achieving that. If you look at Sub-Saharan Africa in the last five years, we have grown from 60 people to over a thousand people and that is through start-ups, acquisitions. We prefer the model of a joint venture start-up type of business, it works more successfully for us because we can start with people that are like minded and because of our entrepreneurial nature, we have been more successful in partnerships like this, as opposed to coming in as a big brand and acquiring everything and telling people what to do.
And what percentage represents your business in Africa. And as you deepen your base here, what percentage volume are you looking at?
Our Russian business is a massive one. I want to be bigger here than Russia. People take them seriously. I don’t think that from an Africa perspective, we’ll be as big as the US market or the UK right now; but in the future we can be. However, my first goal is to be bigger than Russia or India.
From an outsider’s point of view, how would you rate the creative industry in Nigeria, side by side other creative environments in Africa and around the world?
There is such a huge creative opportunity here. You have got Nollywood, you have very educated people, you have got people of amazing level of creativity, but the quality of the work two years ago was appalling and I blame clients for this, because if you are a big mobile cellular operator with huge budget, why are you just allowing your agency to produce substandard work? I am not even talking about award winning works; I am talking about works of decent quality. People always ask ‘what is the value of awards? is it not just about agency bravado and rock star mentality? I think that clients should take time out and attend events like Cannes, The Loeries, Adweek New York and the others so that they can inspire their agencies to deliver the best quality work. I am not just talking about awards for awards sake; I am talking about creatives that deliver results.
If you take a look at the requirements for award entries now, 30 percent is tied to result. So if you can’t prove that your campaign delivered results, your award will not be considered. As such, clients need to go to these awards to get inspiration and they also need to take a good look at their relationships with agencies.
The other thing that I will say is that when you get to these events, what you see is that the biggest partners and stakeholders are no longer the TV or Radio stations, now what you see is the technology companies and if you look at the setup, you have a massive auditorium and about 15 stages that are constantly running with lectures; you now have two other auditoriums with multiple stages and one is focused purely on technology and that is the most exciting place to be; that is where people are talking about celebrity robot, that sounds crazy. You have people like IBM presenting all kinds of technology, like a machine that can listen back to the beginning of time; that sounds outstanding! How does that work? We have people talking data trends that can potentially change entire countries in terms of gathering data. I just think that as an industry this environment can stir up inspiration, not just for clients’ creative agencies but also for clients. I think that when you go to a place like Cannes, where you have thousands and thousands of entries, and win an award, it is truly a phenomenon.
In deciding to settle for Noah’s Ark as your Nigerian creative partner, what were the considerations Dentsu Aegis looked at?
What Noah’s Ark has actually achieved is amazing. As I said, we have got Nollywood, fantastically well educated people; you have got a huge amount of determination in this country, why are we not delivering work at the same level as South Africa and even the French countries like Cote de Voire. The quality of TV production work that they do is actually brilliant. So we definitely want to work with the local awards initiative in the market because the opportunities are massive.
Dentsu is a global company with presence in 145 countries, and you work for some of the big multinationals, so what are your clients saying about the Nigerian market?
Clients say ‘I can see the opportunity, but how do I invest, because the market is just so big’; the market is so big and so complex. I have been doing this for five years. What clients generally feel is a little bit of fear and trepidation because if you come here and make a mistake because of the sheer size of Nigeria it’s expensive. I think for investor to get the best out of Nigeria, they must focus on it for at least two years, you have to support your brands, you have to mobilise people to help; here you have to invent everything, and if you come to a place where you don’t invent anything, then that is tough. So it excites them, but it also scares them.
What’s the strategic importance of the Nigerian market to Dentsu Aegis growth plan, especially in Africa?
It is a two-fold thing. First, it’s a big country with massive potentials. I think that Nigeria in the future will make up 50 percent of our profit in the region. Financially, it could be the biggest part of our region. Value wise I think it’s the most important because if we can’t do this well, you could do anything wrong. This is probably the most important place to succeed, I think. We are putting a lot into it. We are investing in technology, training and so on. We have a number of people here that are on out training programs. We have a programme that takes the top 500 people in our network for training. We have one person from here , one person from Kenya, etc. If you can do it here you can do it anywhere.
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