For an economy such as Nigeria’s that depends on crude oil for its sustenance, these are bad times. The situation has been worsened by the devaluation of the naira. But hope is not lost as President Muhammadu Buhari has embarked on the process of economic restoration. The Managing Director/ CEO, Neo Media & Marketing, Mr. Ehi Braimah, says the second half of the year holds a better outlook for the economy. He says marketing communications agencies should be innovative to overcome budget cuts during economic slowdowns. ADEDEJI ADEMIGBUJI met him.
The first half of this year has not been very encouraging for the industry. Factors such as the general elections, oil price drop, among others, are believed to have affected businesses generally. What is the impact on the marketing communication sector?
Every industry is affected and not just our industry. Look at the devaluation of the country’s currency- the naira, it is a big issue. When your reserve depletes, the external reserve is depleted and you need to devalue your currency. Secondly,the revenue from oil dropped by 50 per cent and that has had a terrible impact on the economy. You know, once your major source of income is from oil practically, your economy revolves around oil income, so if you are losing 50 per cent of your business, it only means that you cannot pretend things are normal. It can no longer be business as usual. Then we also had a crisis- the elections, which slowed down businesses, as people were waiting for the outcome of the elections before knowing what to do. Also, don’t forget that there were all kinds of predictions about Nigeria falling apart and, indeed, there was capital flight too. So taking together all these issues- uncertainty, drop in naira value and revenue from oil in the first six months of this year, no meaningful business has taken place. We are actually now looking at the second half the year.
What are the implications of states owing workers’ salaries ?
I do not have the information but from what we have read in the papers, we understand that the economy is in a bad shape and that is to be expected knowing how government could no longer pay salaries before the bailout by President Muhammadu Buhari. So, that can only be expected if you mismanage your resources,your economy. With the income Nigeria has made from oil in the last six years, I am surprised that government could not pay their workers when we all knew that most of the time they devote between 70 and 80 per cent to recurrent expenditure probably next to nothing to capital expenses. The governors owe Nigerians explanations why they could not pay their workers because they collect money from Abuja every month. So, what did they do with all the money? Some of them were launching ambitious projects that were unrealistic like building airports. For me, they just mismanaged their resources. That is why they went bankrupt and could not pay workers and stop blaming it on drop in oil revenue. If you plan for the rainy day, then you will know that because you were making money in boom time it doesn’t mean you will not save for the rainy day. Every business circle experience boom and down time. So, you must also anticipate that one day it will not just be the same story of increased revenue from oil every month. It’s been very tough for us this year and we have also lost some businesses on account of the economy that has refused to pick up since January. We want to believe that the second half of the year things will be a lot better. There were lots of borrowing by the federal and state governments. That is part of the problem that made me asked what they did with all the money. They had money from the excess crude account apart from their monthly allocation. What did they do with all these money running into billions of naira every month? On top of that, they were still borrowing money and floating bonds and taking loans. The other day, I was listening to the chairman of the governor’s forum saying some of that money they borrowed that their tenure is stressed as much as 20 years. So you just borrow for generations unborn to come and pay? It doesn’t make sense. I understand some governor left some money in the treasury in this difficult time such governors were so prudent they had a lot of development in their states and they still left some money behind in the treasury. I think such governors should be congratulated and honoured if you ask me, believe me, because they were very prudent managers of resources.
So how do you think foreign investors will react to these indicators? Does it portray a very good business confidence in the economy?
Nigeria, any day, is still a great business destination and a lot of investors outside Nigeria still want to come here but the signals that received prior to this have been very discouraging. You know if you take the issues of security, corporate governance, transparency, and others, most investors won’t want to come here. Take the case of Richard Branson for instance. He said he wanted to invest in this economy but he was frustrated out and that he will never come here again. So, there are a lot of other investors who have put in money in this economy and they want to take the money out. Before the elections, there were lot of capital flight and we had stories like people now looking the direction of Ghana, South Africa, Kenya for investments purpose when there were so much of uncertainty here. I will not blame this people who wanted to take their money out. We believe now that we have a new government and there should be a deliberate attempt to woo investors to come into Nigeria because the country still presents a great opportunity for investment.
When there is lull in the economy, companies are known to cut down on their marketing communications’ budget. Has that been the case this year?
That is true. We were also having problem, some of the clients we were working for also had to cut budget or cancel outrightly some of the project they used to do with us because what we do is basically public relations. When the economy is bad, the first place to go to is marketing budget to trim it down. I can assure you that a lot of companies did that this year but that is not to say, most of the companies in the first quarter experienced negative growth. It will always be like that. I want to look at it as a period of temporary setback and the elections were largely a setback. Most people were not sure of the outcome of the election and you cannot plan; you don’t want to stick out your neck but am looking at the second half of the year becoming much more dynamic. I think we should look at the brighter side and I think as we begin to settle down and the politicians are beginning to get their acts together, the economy will bounce back fully.
The president appears not to be in a haste to appoint ministers. The National Assembly too has its battles. Where does these lead to?
Well the president has told us that there is so much mess. He needs to clear them and he is not in a hurry to appoint some of government officials. I think yes the momentum is slightly slowing down; I think we should still give him benefits of the doubt. These are still early days. I know Mr. President means well for this country. So, it is too early to say we are so much in a hurry. Nigerians are very impatient people. They want to see the president get to the seat today and appoint ministers tomorrow. Yes, we are in a hurry I agree but at the same time the president has his own style and his methods and we must concede that to him. Let us begin to expect that there is going to be a complete turnaround of the situation in terms of the economy, the opportunities for Nigerians, for investors so that we move from what I will call unacceptable state of affairs. The economy is slowing down, workers are not being paid fully their salaries arrears, nobody knows what is happening, inflation is also going on, cost of borrowing money is also going up, the dollar today is about N226. It is unacceptable because about six month ago we still bought dollar in the black market in this country for about N170. So now we have to pay more and it is likely to go higher so we have a crisis and that is the truth.
‘It’s been very tough for us this year and we have also lost some businesses on account of the economy that has refused to pick up since January. We want to believe that the second half of the year things will be a lot better’
Let us look at the industry generally we have PR, we have advertising, we have media, we have experiential marketing. It is said that out of this sectoral groups under the marketing industry, PR industry is not fully exploiting it’s great opportunities in marketing. How has PR fared in marketing communication?
Well, I will let you know that the PR industry is growing and the practitioners are also warming up to that challenges that you have just identified. There is a knowledge gap obviously, there is a practice gap and I think we have responded to that by having the Public Relations Consultant Association of Nigeria which is an association of practitioners, consultants, consulting aspects of the practice aspect of PR. We believe that through that forum, we will begin to engage one another; we will develop the potential to build the industry for the practitioners. I can assure you that as I speak to you now, so many organisations locally are beginning to engage PR firms whether from corporate communications or to help them to promote their brands and marketing communication campaign but like I said during the last election period most, of the politicians also work with a lot of the PR people on a consultancy basis in terms of delivering their key messages, helping them to engage with the media and all of that. Most of those things also happened, I believe that with more training, with more engagements, the industry can only grow. PR industry has a lot of potentials like I said we are gradually coming up.
One of the major challenges the industry is having is statistics. No statistics to ascertain the worth of the industry financially. So what are the challenges towards getting to this direction?
It is an area we have identified in terms of the PR campaign. We are having different committees working and I want to assure you that the president is actually working around the clock to make sure we do things properly. We actually know the value of that business, the industry in Nigeria in terms of billings even the rating of the agencies we want to know who is doing what and the kind of business that we are doing. So it is a process that is continuous and I believe if we get it right the industry, the practitioner will be better for it.
So many clients are looking towards experiential marketing. They say through evaluation, experiential marketing delivers more impact than some other areas of communication. How do you react to this?
It is not peculiar to Nigeria. I think all over the world, the brands budget on top brands are moving from above-the-line to below-the-line but that is not to say traditional advertising communication platform is no longer or losing its relevant. It is just that you have to move with the times. The trend now is the consumers are beginning to dictate how their product should be given to them. Secondly, they want to jointly own the experience, so our technology is playing a big role in that transition. So, the truth of the matter is we want to engage with consumers, consumers want to experience the brands in all its dimensions. So it is no longer enough to just put your brands on the shelve, the consumers want to be properly engaged to know the full benefits of that brand. Why should I buy your brand instead of buying the other brands? So through that experience, it could be creating events, live events. For example, the consumer becomes connected emotionally with your brand so, that way, the brand gets the patronage from consumers. The tendency now is to look for those channels where you can connect your brand with your consumer and then you create an experience that is a memorable for them to make them to always come back. Advertising is not sufficient. When you run a campaign on television, radio, you are just informing me but if I experience the brand first hand in terms of direct engagement. When the consumer responds then it is like two way traffic. So you have what is called activation platform where the brand and the consumers interact, it is like a emotional space. We are actually now doing what we call emotional marketing where as the functional benefits has been communicated through the normal advertising but the emotional path is through experiential marketing. So I think that trend is what is beginning to gain attraction; even when defining event marketing the simple definition I always give “it is the design and implementation of an event and then you manage the media below-the-line activities so you are actually engaging with the consumers directly whether through the sense of smell, touch, the five senses, so you give an awesome experience and then the consumer feels he is a part of your space now, now the consumer are now becoming a part of the space, now there are no longer there to receive information, they want to be part of your total marketing experience for that brand.
‘These days, you don’t just create facts for your brands you create what you now call fanatics and very good way we now do that now is to identify people that will own that experience on behalf of the brand in terms of music influencers, you can use as ambassador to reach your consumers that is also an emerging trend’
Can you share your views on experiential marketing and the purpose of its conference?
The experiential marketing summits hold every year in the U.S and this year it was held in San Francisco from May 11 to 13. We had practitioners in the industry from all over the world coming to attend and the idea is to share knowledge, review case studies from different organisations. All of these were shared and the results were very interesting. These days, you don’t just create facts for your brands you create what you now call fanatics and very good way we now do that now is to identify people that will own that experience on behalf of the brand in terms of music influencers, you can use as ambassador to reach your consumers that is also an emerging trend. We are also beginning to do things like that in Nigeria because you engage where the consumers live or work or shop, you take the activities to them in those places, you engage them. It is called channel marketing. Where they shop, you meet them there; where they live, you will meet them there; where they work, you meet them there. So it is an experience through engagement. That way, like I said, there is an emotional connection and I think at the summit, we had a lot of case studies, opportunities to network, opportunity to collaborate, opportunity to have new resources to learn about new trends.
