‘Companies who cut marketing budgets today are risking future profit’

Tayo Oyedeji is the Managing Director ofMedia Perspective, Nigeria’s foremost advertising media planning agency.Oyedeji has both corporate and academic work experience spanning media advertising, management consulting, and financial services in Africa, Europe, and North America. In this interview with Daniel Obi, he says that the clamp down on corruption by the President will play up innovation and intellectual ability in various sectors of the economy. Excerpts

2016 is here, what are those factors that will shape this year?

There are three core issues that any businessman or woman must be aware of as we continue into 2016.  The first is that businesses will face significant headwind due to macroeconomic issues that will impinge significantly on Nigeria. The effects of the declining oil price will be particularly stringent. We are hearing forecasts that the price of oil will further decline and that means a significant portion of our GDP will drop. That will lead to a lot of liquiditysqueeze in the market. The second factor is the government’s clampdown on corruption. The core driver of corruption in Nigeria is public sector spending. The expected liquidity squeeze will make the public sector less attractive and less prone to corruption. Oil revenue is the grease that makes the wheel of corruption go round so its decline which will have a negative effect on 2016 GDP may end up benefitting the country. My third expectation for 2016 is the development of a “new normal” in Nigeria. This “new normal” is the place where innovation and intellectual ability will begin to win in the Nigerian business place instead of nepotism. The declines in oil revenue and corruption will hopefully empower intellectuals and the innovators to become more prominent in our country. The culmination of these hopes will take a while but I hope 2016 will start the process.

  Then how will the anti-corruption drive affect the IMC industry?

The oil boom of the past few years produced record corporate profits that precluded the need for fiscal discipline in many Nigerian businesses. There was so much liquidity in the system that even very bad advertising campaigns were approved and deployed without regard for metrics and effectiveness. In 2016, clients are going to be more concerned about the return on investment from advertising campaigns. Clients worried about returns on investments have no time for nepotism and corruption. They want the most innovative marketing communication service provider at the best possible cost. That gives consummate professionals a chance to win in this market. Professionals win when the metric of concern is ROI so I am really excited about 2016.

Are you  emphasizing that in the “new normal” innovation and fresh thinking will be the next niche for the marketing communication industry

Yes. The Troyka Group in general and Media Perspectives in particular have consciously elevated the importance of intellectual abilities and innovation. And the good news is that discerning clients across our country are seeing this renewed focus and are asking us to work for them.  We know the year will be tough for our industry but are not afraid of losing business because we have consciously invested, even more, in our people, process, and strategic solutions. Everyone is looking for value and ROI, Media Perspectives delivers media ROI at the highest rate in our country so discerning clients will keep working with us.

In the early year like this, operators start to prospect for businesses, where are the opportunities?

There are a number of growing industries in Nigeria that will define the future. E-commerce is the most obvious candidate because of the growth of brands like Jumia, Konga, and PayPorte but I think any industry that is not import-dependent will do well in the short-term since the government would be keen on developing the non-oil sectors. Therefore, agriculture, local manufacturing, food processing, and the service industry will do well while import-dependent retail and manufacturing will suffer. Another sleeper industry that will awaken is the consumer tech industry. Netflix just announced that they are moving into Africa to compete against Iroko TV and other local content providers. Facebook is investing heavily on the content; Google is hiring for the Lagos office virtually every day while other tech giants are also ogling at the potentials in a market where more than 50% of the population are younger than 25. Every industry that relies on intellectual power will do well in the evolving Nigeria. These are exciting times, and I am glad it is happening now.

The present government doesn’t seem as a talking about the direction of the economy, what implication does this portend?

The government is not speaking but it is speaking louder than ever. I was in the US sometime in December last year, and met with an Egyptian gentleman who said, “Tayo, I am excited about Nigeria but worried about my country. All of Africa is excited for Nigeria because they can see that there is somebody that is trying to stop the spread of corruption in the country. If Nigeria gets it right, then the rest of Africa will have hope that it can be done”. The government may not be speaking on TV every day but its actions are speaking loud and clear to the rest of the world. From a theoretical perspective, communication can be verbal or non-verbal. And believe it or not, non-verbal communication is louder than the verbal one.

In your opinion, how would the Nigeria’s IMC industry assist government in this anti-corruption drive?

We need to help the people understand the realities of the new Nigeria we are all hoping for. We need to help them understand why inflation is rising and why we must experience some temporary pains before we attain redemption. We need to let them understand the importance of staying together as a nation. We are better, stronger and smarter as a single entity. Nigeria has about half the landmass of Texas, one single state in US. But the US is such a huge economy with over 300 million people. Anybody who wants to invest in the Americas must start in the US because it is big. Similarly, Nigeria has the largest population in Africa with about 170 million people and anybody who wants to invest in Africa must come here first. If you split Nigeria, then we become small countries like Benin and Togo. Nobody wants to invest in a small economy with 20million people. We are better together. We need to help our people see this fact clearly.

How do companies reconcile between cutting communication budget and the need to reach consumers which needs funding

It is really a tough decision for a lot of them. But the discerning ones understand that they need to invest in the future. Marketing communications is the art and science of investing in the future of a brand. Without it most companies and products will die. Brand managers need to know that marketing budget cuts is a conscious effort to harvest the profit for lunch today instead of investing it into the future of their brands. All businesses have to choose between investing and harvesting. Those that harvest eat today, but suffer tomorrow and those that invest are lean today but tomorrow is bright for them. That is the model I will advise any marketing director to consider. The best investment is in the future of the brand. Tough times are not the time to cut budgets but to invest.

In buying media, how do you determine the medium and how do you measure engagement?

We make buying decision strictly with marketing research. We use scientific, data-driven algorithms to choose media vehicles to optimally reach our client’s target audience at the most cost-effective costs. We don’t make buying decisions with rules of thumb or heuristics. Nor do we place adverts based on friendship or relationships. We are the Math men of advertising and we stick to Maths and statistics in making buying choices. If you see our clients’ adverts in BusinessDay, it is because research has said the paper is the best way to reach the consumer for that particular purpose or brand. We are research driven. If a client is buying with Media Perspectives, for every kobo they spend, they will get at least a 20 percent premium in targeting and buying efficiency because of our data and analytics skills. Even I, as the Managing Director of the business, don’t have a say on the buying process. Numbers and analytics rule at Media Perspectives.

Where is Media Perspectives in the industry?

We are one of the foremost media independent agencies in Nigeria and it is difficult to find our peer in this country if you consider our billings, our reputation for excellence, and our excellent operations. We think we are the best media agency in Nigeria for any client interested in achieving measurable returns on investment from their media budgets.

Looking at the digital advertising, what is your take and what is the percentage of digital advertising now compared to other forms of advertising

Digital advertising is actually growing very fast. When I was leading digital media at another agency, about four years ago, it was just about 5 percent of the entire billings in Nigeria but now it is closer to 10 percent. It has doubled in about four years. I think it will grow further to about 20 percent of the total advertising budget in a few years. Nigeria is a young market where almost 50 percent of the population is younger than 25 years. These guys are not watching TV everyday; they are more engaged with their mobile phones and other digital access points. Last year we had a media brief that was 70 percent digital and only 30 traditional media. Brands will go where the consumers are; and digital is gradually becoming their congregation point.

Daniel Obi