Recession: Firms may move media accounts this year

Some companies who struggled out of 2016 difficult economic environment may move their marketing communication accounts to different agencies within this 2017 as they search for value and solutions to business operation this year.

A marketing communication operator told BusinessDay that companies are reassessing who they are working with to ensure they are achieving maximum value in the competitive and harsh operating environment.

Companies are looking for agencies that are innovative, that can maximize resources and can suggest and engage in extra-ordinary actions to help the companies navigate through the consumer declining demand which is affecting revenues, he said.

This has become critical as marketing communication professionals are no more seen as Ad or PR agencies by companies but partners who would help them solve business solutions, achieve product extension and assist them to penetrate different customer segments.

The operator acknowledged that 2016 was a very difficult year, but within this difficult time is the period for innovative and forward looking agencies to win businesses.

Innovation, reduced cost as survival strategy

Assessing how, especially some marketing communication agencies survived in 2016, another operator in the PR industry, Oluwasola Obagbemi, Deputy Chief Operating Officer, Red Media Africa agreed that 2016 was indeed a tough year for media agencies in Nigeria because marketing budgets were essentially slashed by sometimes over 50 per cent with agencies required to achieve same results/target but with so little.

On how the agencies survived the year, Oluwasola said media agencies (digital marketing, media buying, advertising, and PR agencies) stayed resilient and innovative because competition remained despite the downturn. She also confirmed that there were calls for pitches because organizations wanted more innovative ideas on how to effectively communicate with their target audience.

“I would say it was a good year for us at Red Media Africa because we were able to win major accounts – Facebook, Nigerian Breweries, Union Bank Plc., and Uber Nigeria. We also handled PR and communication for Akufo-Addo’s successful presidential bid in Ghana”.

Other factors that agencies employed to survive the year, she said include finding a working balance between digital marketing and traditional advertising. “This was key because budgets were crunched so agencies and marketing managers were forced to be creative with media channels and messaging to audiences”.

In the face of less promotion, she said there was more of telling compelling stories that consumers can relate with. This enhanced effective conversion and also built brand loyalty.

Oluwasola said she foresees a better 2017.” This  will be largely driven by more digital campaigns and creative marketing so media agencies have to step up with innovative ideas and help brands tell their stories”.

  Lanre Adisa, CEO of Noah’s Ark, a top creative agency agreed that the year was particularly difficult but said many of the agencies reassessed their priorities as survival strategy.

He however said some agencies survived as they were engaged by clients who still invested in their brands.

John Ehiguese, the CEO of MediaCraft, a top PR agency  said most agencies survived the tough year through reduction in their expenses and adjusting cost profile. According to him, some agencies retrenched to stay afloat.

Looking in to this year, he said the prognosis does not look positive. He however believed that consumers would cope better this year as they have started adapting to the economic realities from 2016.

On his part, Akonte Ekine, CEO of Absolute PR, said in addition to cutting over-head cost, some media agencies embraced every business that came their way unlike before when they selected and rejected some businesses based on clients’ pedigree.

The President of the Outdoor Advertising Association of Nigeria, OAAN Tunde Adedoyin told BusinessDay recently that from his calculations, the outdoor industry has further lost 50 percent businesses in the last one year.

Adedoyin, who attributed the industry’s ordeal to recession and government policies which have adversely affected corporate organizations and impacted heavily on their advertising structure, exhibited worry on the plethora of vacant billboards around the country.

Affiliations

In 2016, some agencies signed affiliations with foreign agencies as part of growth and expansion strategy. Chain Reactions Nigeria, one of Nigeria’s most vibrant PR firms signed with Edelman, a foremost global communications marketing firm based in South Africa. Also, Dentsu Aegis Network Sub Saharan Africa, one of the leading global advertising networks, signed affiliation with  Noah’s Ark Communications Limited, one of Nigeria’s leading creative agencies, as its affiliate creative agency in Nigerian market.

Commenting on the news of Edelman’s decision to sign with Chain Reactions, Israel Opayemi, MD/Chief Strategist of Chain Reactions Nigeria, said, “Our admission into Edelman’s affiliate network is an important milestone in our growth trajectory. It is the kind of best-of-breed partnership we have always desired. Our affiliation with Edelman will continue to raise the bar of creativity and excellence in all that we do. Edelman’s global resources will propel us to do more of the creative work we have been known for in Nigeria.”

Also speaking on Noah’s Ark affiliation, the Managing Director and Chief Creative Officer of Noah’s Ark Communications Limited,  Lanre Adisa, stated that the affiliation with Dentsu Aegis Network is another significant milestone in the annals of the agency and would further help position the company as a thought leader in the advertising industry not only in Nigeria but also in the West African sub region.

Daniel Obi