Mr. Bolaji Okusaga, who recently bowed out as the chief executive of The Quadrant Company, to establish Precise, a reputation design and generation company, spoke to Raheem Akingbolu on likely marketing communications trends in 2018. Excerpts:
What are your thoughts on the performance of the Public Relations (PR) industry in 2017?
According to the Holmes Report, while global PR industry rebounded to seven per cent in 2016, up from five growth in 2015, hitting the $15 billion in total spend, with the likes of BlueFocus, Webber Shanwick, Golin and Ketchum out performing industry average; same could not be said of Nigeria PR firms in 2016. The state of affairs was driven largely by currency volatility, macro-economic shocks and policy issues with big spenders like MTN and Etisalat (now 9Mobile) in the Telecom sector, the Unilevers and the P&G’s in the FMCG sector crawling back with consequent squeeze on the local PR industry in 2016. The year 2017 opened with a host of foreign multi-nationals downgrading Nigeria and centralising their PR businesses in South Africa and Kenya.
As a top player in the industry, what are the reasons for this imbalance?
This was due largely to prevalence of foreign currency volatility which saw a great gap between official and black market rates and created a tough operating environment for businesses as they were not able to access dollars at the official rate. Under this context, 2017 opened on a bleak note for most PR practices given the impact of macro-economic shock on marketing spend and by implication, the PR share of that spend. However, following Nigeria’s exit from five consecutive quarters of negative growth in the second quarter of 2017 with the economy recording a positive but fragile growth of 0.72 per cent (revised from the earlier quoted 0.55 per cent based on improved Oil earnings), we saw a restoration of confidence in the market. This confidence saw a limited rebound in PR activities as foreign and local businesses hoping to cash in on the prospects of a full recovery began to raise their spend, albeit cautiously. So in terms of the knock-on effect of the recovery on the PR industry, it is still largely marginal given the fact that the non-oil GDP elements are not growing as fast as required for a big effect on marketing spend, at least not yet. The reason why the effect of this recovery are not yet visible are not therefore contestable. I did say earlier that while oil GDP expanded considerably in the second quarter of 2017, non-oil GDP only grew at 0.45 per cent, down from 0.72 per cent in the preceding quarter and -0.38 per cent in the corresponding period in 2016. In Q3 of 2017 GDP grew by 1.4 per cent showing sustained momentum. However, Q3 GDP results also showed that the nation’s economy is still exposed to the risks especially on the real sector side, as only two out of 10 sectors grew during the quarter. While the oil and gas sector grew by 25.89 percent, the non- oil sector from which a larger pool of marketing spend is obtained contracted by 0.76 per cent. Under this context, it does not take rocket science to see that the PR industry did not grow last year.
Many analysts, including the President of the Federal Republic of Nigeria, Muhammadu Buhari, have predicted that 2018 will be a better year, do you subscribe to that?
While the year 2018 promises to be brighter and better, given the obvious recovery of the economy and a projected increase in government and political spending being a year before the general elections, there is a big need for caution for obvious reasons.
First, while government spending goes up in the year preceding an election as the government will be in a haste to deliver on its electoral promises, the nature of the spending and the fiscal discipline around the spending may make or mar opportunities in the real sector. This is so because an uncontrolled spending regime may increase inflation and lower consumer spending power with attendant impact on goods and services from which marketing spend is derived.
In another development, while an increase in government and political spending will mean more money for agencies with Public Affair competence and clientele, the flip-side is that the fraction of this spend going to PR agencies in Nigeria may be low given the propensity of government and political spenders to shut-out local players and express preference for foreign ones.
Again, we need to look closely at the impact of the rise in government and political spending on the economy because without staying the focus on key government policies like the medium term ex[expenditure framework and the economic recovery and growth plan by maintaining fiscal discipline through keeping its expenditure within budget targets to avoid eroding the macro-economic gains made thus far, there may be an adverse effect on the productive sectors of the economy with consequent impact on marketing spend.
It is also important for us to know which sectors profit the most from a rise in government and political spending. For one, there will be a rise in activities in the Infrastructure and Housing Sectors during this period so government contractors and real estate players profit the most with marginal knock-on effect on marketing. Again if you break down the marketing players that profit the most, you see that the Digital and Hybrid players profit the most given changing media consumption habits and influence centres as these players have better access to younger demographics and so command more spend given the youthful skew of the mass of the population.
Essentially, what one is saying is while there are indications of improved PR activities and improved spend next year, players need to improve their offers and raise their game in digital to be able to tap into the projected growth.
Marketing practice is evolving everyday as a result of technology and consumer demand, what are the impacts of disruption on the PR Industry?
The forces of disruption militating against traditional public relations practice are many. Let us consider a few. First, let us look at the introduction of new technologies
The rise of Digital technologies and the opportunities available today for flow of information as well as syndication and aggregation of news by non-traditional news sources, be they News-sites, Wire Services, Bloggers and Social Media Influencers – all leveraging digital technology – creates direct access by the consumers to news and information and makes traditional gate-holding and gate-keeping, upon which Public Relations feed, irrelevant. With the introduction of digital technologies which aid news and information dissemination, institutional gate-keeping is now being replaced by machine gate-keeping and so power has moved from institutional sources of influence to machine sources with algorithms set by the likes of Google with it google-robots now a new agenda setting source rather than traditional media; with social media trends on Twitter, Facebook, Instagram and Linked-in replacing hot-topics in the newsrooms; and chats from sources such as Facebook, Whatshapp and We-chat becoming more believable than news from traditional sources. In this context, the place and effectiveness of the traditional press briefings, news release and articles is being called to question and so the traditional ad-equivalency measure of PR value and other traditional concepts upon which the industry is built are starting to hold no water. Beyond the issue of reach and measurement are other issues such as the understanding of these digital platforms by traditional players and an ability to navigate the complexities created by new technologies in delivering results to clients.
What will you say about the continuous rise in digital and social networking generation which are also posing threat to traditional practice?
Nigeria is a country of 193 million people with a median age of 17.2 years added to this is low life expectancy and a high population growth rate which means the median age can only go southwards rather than northwards. The implication of this is that the way the generations before the Millennials – those born after 1980’s – consume media is certain to become extinct as platform agnostic media and social media have already gone mainstream with traditional media becoming mere news re-base platforms as Facebook live, Youtube, Instagram, online TV’s, online radios and other digital platforms take-over. What this means is that hybrid platforms who are more adept at manipulating these platforms will go mainstream while PR agencies that lack the skills and the proprietary platforms to take advantage of this trend will shed what could ordinarily have been traditional PR spend to Hybrids with the implication being the death of PR agencies that fail to up their game in this regard.
Can you please quickly look at the Fourth Industrial Revolution and its implication on PR practice?
The fourth Industrial Revolution is coming on the heels of the digitisation of all systems from transport, to communication and the development of artificial intelligence for all systems. The implication of this is that except PR also embrace big-data, machine learning and analytics as the basis of its practice, the industry is either going to become extinct or converge with other allied industries given machine possibilities. The Holmes Report in one of its Industry Reports is already predicting the convergence of PR with mainstream marketing such as Advertising and Media Buying.
11 years at the helm of affairs at TQC is huge, can you share your experience?
Let me sum it up this way; my years in TQC were shaped by challenges and opportunities to explore the marketing communication industry. I led and I learnt. Two things worked for me; my background and the template I met in the foremost PR Company. Aside the fact that many top practitioners had overseen the activities before I came on board, TQC is subsidiary of a group of a marketing communications family that is guided by best global practice.
The agency has been in operation for close to three decades, having been established in 1989 opened up shop formally in 1990. It had had a series of CEOs from Phil Osagie who later left to set up JSP, to Longley Evru who now runs Angel, to Vincent Oyo, the husband of Oluremi Oyo who used to be Obasanjo’s spokesperson as President, to Benedict Upa-Ayede who went on to GLO as a Director to myself, in that order. I am about the fifth person to have run the company as MD. But interestingly I have had the luck of being the longest serving CEO. It’s been a wonderful place. A whole lot has happened in the last 11 years. It has been pretty much challenging but whilst it has been challenging I have also learnt a lot. I have had to learn to be more patient. One has had to really hold one’s temper in check. I have learnt to relate with the client in such a way that even if the client does not have a clue, they still must confer to that client that kingship status. In short, humility is one key thing I have learnt in the last 11 years.
Looking back, I think my background actually prepared me for the TQC job and as I move on, my client and agency experiences will further help me navigate through whatever challenge ahead. Aside my experience in the banking industry where I worked for a bank called Marina International Bank, my working relationship with the owner of the bank, the late business mogul, Alhaji Wahab Iyanda Folawiyo and later my closeness to Mr. Aighoje Aig Imoukhuede of the Access Bank family impacted on me very well.