What are the 10 marketing ‘myths’? They were unveiled at a marketing summit in Lagos by the founder of Media Reach, OMD, TBWA and Tequila Nigeria, Mr. George Thorpe. Is he right in his assessment? Advertising gurus, such as Mr Biodun Sobanjo of Troyka Holdings do not agree with him. ADEDEJI ADEMIGBUJI reports.
The summit was meant to celebrate the 10th anniversary of a publication, Marketing Edge, but it also became a platform for leaders in Integrated Marketing Communication (IMC) to speak on the trends in the industry which they have shied away from confronting over the years.
The summit, tagged: “Exploding Myths of Integrated Marketing Communications” drew stakeholders from all sectors of the industry. Mr George Thorpe of Media Reach was the keynote speaker.
Thorpe, who described his presentation as a “parting gift” to the industry, expressed concerns on what he perceived as the problems of the industry whose many are shying away from.
Thorpe, who is to retiring soon identified 10 myths which he considered to be hindering the sector’s growth.
He believes that in these myths are assumptions about the industry which are not true.
Myth 1: Juicy accounts and lucrative agency business
Thorpe challenged the popular assumption that leading agencies serving big multinational clients are doing well financially. “The reality is that most of these agencies have a negative cash flow with huge receivables,” he complained. He concluded that if the business with the “juicy” accounts were subjected to proper scrutiny, it will be discovered that most of these agencies are not doing well. “At best, some of the individuals running them may be doing well but the businesses are not healthy,” said Thorpe.
Citing the case of a United Kingdom (UK) agency that had an entry on its client list as ‘Income derivable from interests on “cash at bank”, Thorpe said this particular agency was able to cover all its overheads from the interest generated from its bank balances. He wondered if there were agencies with such lucrative businesses in Nigeria.
However, his position under this myth was countered by the Chairman of Troyka Group, Mr. Biodun Sobanjo, who maintained that despite Thorpe’s assumption, there were indeed juicy accounts during his days in active practice and such still exist today.
“The challenge is that few agencies’ heads are ready to look at their clients eyeball-to-eyeball and demand fair compensation for their services, but will rather hang on at all costs. This is what needs to change, as agencies need to be more business minded,” Sobanjo said.
Myth 2: IMC is here to stay
For the second Myth, Thorpe believes that most agencies in the country are not well structured in line with the three levels of integration, namely thematic, mechanical and strategic, which the are three levels of integration under IMC. He said the practice in the country is a Thematic Integration where an idea is distilled Through-the-Line (TTL), which is the use of mass advertising to form a prospect or customer database, which can be implemented for direct marketing activities.
The reality, Thorpe explained, is that most agencies are not structured to work in a truly integrated manner. The other side of the coin is that clients too are not ready to put all their eggs in one basket in a way that will allow proper integration to take place.
So, contrary to the popular assertion, we are still some way off in practising truly Integrated Marketing Communication, he added.
Myth 3: Retired founders, MDs can come back on salvage mission
He raised concern over recurring cases of retired founders who still come back from retirement to rescue their agencies from collapse.
He said: “A few retired founder Managing Directors feel they still have it in them to steer their agencies back to the path of recovery when the business nosedived, post- retirement,” he said.
Citing his personal experience, he said coming out of retirement could be frustrating as he felt old and out of place at client meetings he attended.
“The reality is that the client contacts also have a challenge relating with the ‘big man’ that further frustrates the rescue mission,” he noted. On the basis of this, he advised founder MDs to take succession plan serious and possibly put in place a two to three-year plan before handing over the business.
Myth 4: Brands pend on media advertising/media is expensive in Nigeria
Thorpe said only seven advertisers spend above N1 billion yearly in Nigeria, while the next four will spend between N500 million and N999 million.
“In total, only 11 clients spend more than N500 million annually. Most advertisers actually spend less than N500 million. This clearly shows that available total spend in the entire industry is small and by current data figures, only about N103 billion is spent per annum,” he said.
“A comparison of Ad spends to Gross Domestic Product (GDP) from across countries will clearly demonstrate that media is inexpensive in Nigeria: World average is 0.8 per cent of GDP, US: 1.1 per cent; UK 0.79 per cent; Brazil 0.7 per cent; Ghana 0.5 per cent; Nigeria: 0.1 per cent (Rebased GDP),” Thorpe stated.
He said: “When a comparative analysis of cost per thousand across countries is made, it is clear that media in Nigeria is cheap. Again, comparatively, cost per ’000 of 18+ adults showed that Nigeria’s costs stand at N86 for TV and N46 for radio, compared with N167 and N98 for Ghana, and Kenya N688 and N202; UK N1251 and N495. This clearly shows that Media costs are relatively cheaper in Nigeria,” he added.
He, however, introduced a caveat that he is by no means advocating a rate increase by media houses, but merely stating the facts. He urged media owners to invest in content to attract more audience in order to derive greater value based on the audiences they deliver.
Myth 5: Digital in and traditional media out
Thorpe also expressed concern over the assumption that digital media will take over traditional media. “Digital is over hyped and over promised,” he said, adding, however, that though digital will continue to grow in importance, it will find its place and ‘settle’ in the mix and compliment each other but not replace ‘traditional’ media.
Myth 6: Protectionism/APCON Reform
Being a marketing professional Thorpe is inclined to the philosophy of a free market environment where competition thrives, he observed that those who argue in support of ‘Protectionism’put forward three main arguments; protection of an infant industry, protection of domestic jobs and national security. “None of these applies to Nigeria, so what is the basis for the proclamation made by APCON? The Nigerian IMC industry and professionals can hold their own anywhere and are therefore not in need of protection. The advent of telecoms has also debunked the argument of national security,” said Thorpe.
He contended that Nigeria IMC agencies should have a vision for West Africa and Africa by extending footprints across the continent. “If other countries were to go by APCON’s example, this bold quest will be truncated by Protectionist actions,” he added.
However, Thorpe questions the legal status of the APCON proclamation and the level of stakeholder consultations that was done before it was made public. He also questioned the right of APCON to regulate the ownership of advertising Agencies, postulating that the remit of APCON should be the practice and professional conduct. He concluded by requesting that APCON rethink the proclamation.
In defence of APCON, a council member of the advertising regulatory body, Mr. Funmi Onabolu, said the proclamation is a law as it has been gazetted. Onabolu said further that APCON consulted, engaging with various stakeholders that included agency heads and owners for over two years before announcing the proclamation.
He added that APCON acted in enlightened self-interest by putting some controls in place for foreign agencies that want to do business in Nigeria and not a shutout. “This is no different from what happened in other climes to protect local industry citing Brazil as an example,” he said.
But, Shobanjo countered Thorpe, citing how the 1972 Indigenisation Decree paved the way for local agencies that resulted in the emergence of local ad agencies. He added that APCON is a government agency and that it is one of the steps they take to protect local industries just like the Petroleum Industry Bill (PIB).
Still, Thorpe requested APCON for a clarification of what enlightened self-interest means and sought to know if some aspects of the APCON proclamation is not at variance with some of the provisions of the Company and Allied Matters Act (CAMA). He further argued that creating an environment that will promote competition and improve services would be the source of greater growth.
Myth 7: Dearth of data
“The reality on ground is that there is a myriad of published researches and data available. So, the assertion is not true. There are also a number of world class research agencies in the country with the skill sets to conduct specialised researches but the challenge is that people are not willing to pay for information. It is incredible that some advertisers are ready to spend N2 billion on advertising but not N4 million on researches that will enable them to get more value,” said Thorpe.
Myth 8: Career advancement of indigenous
marketers on rise
As against what stakeholders assume that career advancement of indigenous marketing executive is on the rise, Thorpe revealed that between 2004 and last year, the ratio of Nigerians holding top marketing positions compared to expatriates in multinationals declined from 4:7 to 3:8. “This statistical evidence suggests that all is not well as Nigerian professionals in marketing are not doing as well as their predecessors. Surely, the trajectory ought to be in the other direction. Fewer Nigerians are actually occupying the senior positions in marketing,” he cited.
Myth 9 & 10: Advertising agencies win creative awards or die! Affiliate (to global networks) or die!
The Multinational Account (MNC) and Foreign Direct Investment (FDI), according to Thorpe, is the last frontier of opportunity. “Get in Now! This is a very popular point of view within advertising circles that was challenged with facts. MNCs/FDIs are the only group that really gives second thoughts to the affiliation of the agency and the awards they win at creative competitions,” he said.
According to Thorpe, coincidentally, working for these clients has been known to impact on the creativity of the local agency adversely, in that most of the works they do are ‘adaptations and ‘templating’ along globally agreed lines.
On the other hand, he said LCEs, MDAs, SMEs and NGOs are sensitive to awards but not so to affiliation as they are looking for agencies with local knowledge but world-class standard who can model their services to suit them. His words: “They allow the agency develop creative work and are willing to explore compensation models that are far more lucrative than the MNCs.”
On SMEs/NGOs, Mr Thorpe contended that this is a major area of opportunity for agencies that can fashion out a unique way of servicing the needs of these clients who are willing to be more creative in remunerating the agencies. He said they are also available in greater numbers with more to choose from and work with.
But Shobanjo challenged his position by referring to the statistics provided which show that out of the eight big spenders, only one is a local client and since multinationals companies play a key role in who gets the business through agency alignments, affiliation will still remain relevant.
However, Mr. Bola Akingbade, former Marketing Director of MTN, described Thorpe’s exploded myths as concerns not meant to be prescriptive or canonised, but the intention is to provoke further deliberation and elicit constructive debate that would take the industry forward.
