Africa's 'explosive growth' in adspend

Boko Inyundo and Paul Rajput from law firm Lewis Silkin, fresh from last week's IAA Africa Rising Conference, explain why and how big brands are taking the continent seriously.

Lewis Silkin: Boko Inyundo, business development manager (left); Lewis Silkin; Paul Rajput, partner, corporate
Lewis Silkin: Boko Inyundo, business development manager (left); Lewis Silkin; Paul Rajput, partner, corporate

Is Africa rising or has it risen already? Or has it only risen for some and not for others? Or has Africa not risen at all?

As Mr Seni Adetu, the CEO of Guinness Nigeria plc until  December 2014, insightfully summarised, this was the essence of what global industry leaders among brands, advertising agencies, the media and regulators explored during an inspirational leadership conference in Accra, Ghana, held on 27 and 28 April 2015 under the banner "Africa Rising – the New Consumer Generation – What’s Coming Next?".

The forum was hosted by the International Advertising Association (IAA) and the Advertising Association of Ghana (AAG) and officially opened by his excellency John Mahama, president of the Republic of Ghana, himself a marketing communications professional in the early part of his career.

While there were both optimistic and pessimistic observations about the extent to which Africa was rising, we came away with some observations no doubt also informed by our experiences, at the law firm Lewis Silkin, advising our clients on a range of legal matters including mergers and acquisitions across sub-Saharan Africa.

Market confidence in West Africa was certainly palpable in this conference and the discussions we had with various industry stakeholders, as well as the many brilliant presentations over the two days, led us to believe that four areas would be key to future progress of the advertising and marketing industry in Africa.

The four areas are: Revenue; Regulation; Reputation; and Research, the four "R’s" we believe will be key to Africa Rising.

So, taking each in turn and providing context for each as gleaned from the conference.

1. Revenue

Most are aware by now that Africa’s fast growing markets and improving macroeconomic fundamentals are proving attractive to investors. With its large reserves of natural resources as well as its diversifying economies and transformation through structural and regulatory reforms, Africa has registered strong and sustained GDP growth.

Many anticipate further market stimulation through regional integration, public investment in infrastructure, increased agricultural production and a buoyant services sector.

In fact, many of this conference’s sponsors are widely recognised for their pursuit of growth in Africa, notably: Ecobank; Coca-Cola; Vodafone; MTN; Unilever; and Moneygram. In addition, advertisers such as Diageo, KFC, Walmart, Nestle, Danone and India's Bharti Airtel telecoms are all taking African expansion seriously.

This has spurred a local talent hunt by both marketers and agencies as they gear up their Africa operations.

With explosive growth in advertising spend by major global brands in Africa, the major advertising networks’ appetite for establishing affiliate agreements, or for acquiring such operations, grows concomitantly.

A notable debate among delegates at the conference related to the role of multi-nationals and global advertising networks in building the capacity of the local advertising industry.

As many of the speakers and local delegates held affiliations with one, or in some cases more than one, global advertising agency network, there was widely held recognition for the important role the networks played in training and up-skilling local practitioners.

However, there were some in the audience that declared concerns about the potential for capital flight once affiliations were struck or local industry consolidation was stimulated by the major networks.

Interestingly, some delegates also advocated for the growth of African brands cross-border, many seeing the regional scalability of locally owned brands as being key to local, independent agencies growing revenues across Africa’s borders via these clients and this leading to these agencies becoming even more attractive propositions for the large global advertising holding companies.

2. Regulation

Progress has certainly been made in West Africa’s local and regional brand management and advertising industry. This was evident from the impressive talent on show at this conference among representatives of local brands and independent advertising agencies.

However, one interesting outcome of the past few years of economic growth, rising demand for advertising from brands, deepening penetration of the internet, mobile connectivity and increasing competition from new entrants, was perhaps the undercurrent of debate during the conference regarding imminent regulatory reform in Ghana.

This includes a proposed new licensing regime seeking to ensure quality and professionalism in line with a global standard as well as new entry and operational guidelines for foreign practitioners, much as has already been put in place in Nigeria by the Advertising Practitioners Council of Nigeria (APCON) through its Committee on Advertising Practice Reforms (ACARP).

This industrial desire to improve standards seemed to have widespread support among delegates at the conference, though there were some mixed reactions amongst what appeared to be a core group of younger, possibly more digital-savvy, entrepreneurs eager to ensure such regulatory reform was not simply a protectionist reaction amongst the "old guard" looking to raise barriers to entry for new, perhaps more agile, entrants.

If that was the underlying driver some voices from the floor highlighted that this could, potentially, stunt the progress of the Ghanaian advertising industry as it seeks to become fit for purpose for serving brands in the context of Africa’s mobile and technology evolution.

3. Reputation

Nurturing and maintaining reputation through behaving as a socially responsible brand will likely be a key facet for any organisation seeking to operate successfully in African markets.

Corporate citizenship in Africa will undoubtedly attract a variety of stakeholders’ attention given that brands in Africa operate in a context where poverty, conflict, and weak government institutions tend to be more pronounced.

Arguably the best presentation over the course of the conference was made by Yaw Nsarkoh, senior vice-president, Unilever Nigeria, who advocated for a more balanced perspective on whether Africa had, as yet, risen.

While clearly passionate about Africa’s potential, this speaker emphasised that brands needed to shape themselves appropriately for African markets by working alongside African consumers to positively impact their lives.

One example he gave was Unilever campaigning to get consumers to brush their teeth twice a day, thereby catalysing improvement in dental hygiene in the region while growing the toothpaste market. This echoed similar sentiments at a global level over the past few years from Unilever CEO, Paul Polman, and Keith Weed, the chief marketing officer at Unilever.

It also chimed with the aspirations underpinning Unilever’s Sustainable Living Plan launched in 2010. This aims to double the size of the Unilever business while reducing the company’s environmental footprint and increasing its positive social impact in an increasingly resource-constrained world.

4. Research

Ilana Melzer, one of the co-founders of Eighty20 Consulting, championed the importance of data and the role of quantitative, as well as qualitative, research in ensuring government policy-makers, brands and advertising agencies better understand Africa’s consumers, the size of markets and the profile of demand across a range of products and services.

She emphasised that the smarter collection and interpretation of data from research would stimulate more creative campaigns anchored in real insight that better resonates with consumers, thereby helping brands with their positioning in African markets.

Furthermore, Jarrod Eckstein, Managing Director, Unit5, The Creative Counsel, South Africa’s largest advertising group, highlighted how a better grasp of traditional and digital media consumption trends in Africa would enable advertising agencies and brands to more effectively reach Africa’s consumers across a plethora of channels.

So, is Africa rising or has it risen already? Or has it only risen for some and not for others? Or has Africa not risen at all?

Reflecting on our observations about the four "R’s" that are key to ‘Africa Rising’, namely: Revenue; Regulation; Reputation; and Research, we would concur with the CEO of Vodafone Ghana, Haris Broumidis, who said at this conference that with Africa, "we can see the glass is half plenty", a play on the common expression "is the glass half empty or half full?".

Following our time in Accra, we felt that, on the spectrum of optimism (half full) vs pessimism (half empty), Africa is brim-full with potential and all stakeholders must look to harness this potential collaboratively as well as with a purpose that has the common good front of mind.

Key to this will be how brands and agencies generate Revenue and invest profits in innovation and sustained growth, how Regulation is applied and enforced, whether Reputation is front and centre of brands’ engagement with consumers and markets, and whether data from Research is appropriately mined and interpreted.

Boko Inyundo is a business development manager and Paul Rajput a corporate partner at Lewis Silkin


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