African market is very exciting but at developmental phase, says Prather
Increasingly, the African market is getting the world’s attention especially as a place to invest and engage with. Djembe Communications is one such public relations firm that has taken a cue. In this online interview, its Managing Director, Mitchell Prather, who will be visiting Nigeria, gives some insight into this potential.
YOUR agency is based in Dubai, but caters for the African market.
It makes perfect sense to have presence in Dubai, which is a great headquarters for Africa due to the availability of the right kind of talent and quality infrastructure. Furthermore, our Dubai office serves as the consultancy’s centre of excellence and Middle East and Africa’s hub for companies wanting to enter the African market. At the same time, we are exponentially expanding our footprint in the African market and our Luanda office has grown to nine employees due to significant new business wins and organic growth of existing clients whilst new offices in Mozambique and Nigeria have opened with two employees each in the interim. Our recent industry recognition by the Holmes Report and receiving an Award of Excellence at the 2015 PRSA Silver Anvil further authenticates our belief that we offer world-class strategic communications platforms in Africa and beyond.
An increasing number of international network agencies with headquarters in Dubai are running the African market from Dubai. Why is this so?
Whilst the African market is very exciting, it is still in a developing phase, hence needs to be approached with a deep understanding of both the unique challenges and opportunities across business and cultural landscapes. Clients in Africa need to have a lot of local insights and upskill local teams, teams that are passionate about communications. Dubai is a great place for doing that – from digital to creative sphere you can easily find the right kind of talent in Dubai. The second element is that most of the African governments and businesses are looking for international exposure and Dubai, due to its connectivity with the global financial centres, is an incredibly important business hub to facilitate this exposure.
What is the potential of the African market? If positive, why no trickle-down effect on the majority of the continent’s population?
Africa is clearly a fascinating case study. A growing middle class is becoming a key source for private sector growth, accounting for much of the effective demand for goods and services supplied. Technological developments are clearly evident and the continent has leap-frogged some of its global counterparts when it comes to smart phone penetration. Tech giants such as Google and Facebook are expanding their footprint in the market and developments such as these are likely to accelerate Africa’s growth potential resulting in increased employment opportunities, away from oil and other traditional industries and focus on sectors such as manufacturing and technology.
It is a huge continent. How is it split up in terms of market potential and agency organization?
Africa’s economic growth potential, coupled with the region’s very young demographic and burgeoning middle class segment is giving rise to greater market opportunities, which has led to a dramatic increase in demand from companies wanting to invest in brand building to develop a competitive edge. At the same time, many government related entities are increasingly focused on enhancing their reputation in international and local markets, which is crucial to attracting foreign investment while enhancing public confidence in these critical institutions.
It is also important to note that six of the ten fastest growing economies in the world are in Africa and the region is expected to grow further. For an agency such as ours, the opportunity is most definitely across the entire African region.
What is the standard of creativity like in particular markets?
There is a high level of creativity, which is an essential insight to be successful in African markets. A Western focused approach to creativity misses Africa’s potential. One only needs to look at African trends in fashion, music and overall cultural to see that Africa is rich in creativity and opportunities.
Is South Africa dealt with as a separate market?
South Africa is the most developed economy in the African continent. The country’s well developed infrastructure makes it a destination of choice for foreign companies looking to expand their horizon across Africa. Other factors such as strong air connectivity, political stability, and the richness of their natural resources has resulted in many conglomerates setting up their African headquarters in that market. The international media also uses the country as their base to cover wider African issues. All these elements makes South Africa a very dynamic market and we see significant opportunities for our PR business to expand in that country.
What are the biggest challenges you face in Africa?
Like any developing economy, the risks and challenges of doing business remain high with political instability, corruption, legal and bureaucratic hurdles amongst some of the main issues for businesses. For instance, a market like the US, you can set up a legal infrastructure in three days, however in Africa you can’t do that. Identifying talent with the right kind of skill sets is another challenge for us. We’ve been working with a recruitment agency since February to expand our African offices and we just haven’t found the right person whose passion is focused both on their career and the region. Beyond that, you have the challenge of living in Africa. However, things are changing dramatically as African governments such as Angola are massively investing in public infrastructure with the aim of improving the quality of life.
Is there any way we could get a country breakdown for internet penetration, mobile usage, broadband etc?
Each African market has its own strong local media, especially local radio. From a regional perspective, the South African media market is a strong channel however, the views of the South African media need to be expanded to understand issues more from a sub Saharan African perspective. Dubai is also a very interesting media market that has strong inroads into reaching key sub Saharan stakeholders.
What is the importance of local agencies vs international agencies in terms of development?
Sub Saharan Africa is still supported more from an established industry communications infrastructure perspective. You have either South African based agencies, sometimes offices of the multinational agencies, going North into sub Saharan Africa or European agencies going South into the region. This support approach is fine for the industry but not from a sub Saharan African perspective. You need strong local insights first and foremost that are then supported by international best practices.
Advertising spend is growing fast? Where is growth the fastest and why?
This is one avenue where great opportunities lie for marketing agencies. Smartphone penetration across Africa continues to grow. PR and marketing firms should take note that Africa also has an incredibly young population with one of the highest levels of mobile phone penetration in the world – this is a generation that has a huge appetite for media across traditional and digital channels. Brands and public figures need to factor this in to their communications strategies.
Between 2008 and 2020, consumer spending is predicted to rise from $860bn to $1.4tn, according to the McKinsey Global Institute. This dramatic rise in consumer spending is also a key driver of growth in the services sector. Advertising spend rose by 14.6% in 2014, against the global average of 3.2%.
The fact is, any advertising agency looking for growth should be investing in Africa. And as demand for consumer goods increases, so too does manufacturing and investment in business-critical infrastructure. This virtuous cycle of investment and spending presents communications companies with enormous opportunities and the great news is that there is an increasing demand for the more sophisticated communications strategies.
How can the continent overcome its issues, especially those relating to instability and violence?
Political instability, corruption, regulations and poor infrastructure are some of the issues African countries need to address immediately to encourage inward investment. However there is a growing realization amongst African nations to overcome these issues. Countries such as Angola, Ghana, Mozambique and Nigeria are looking to foster an investor friendly environment in their respective countries. These sub-Saharan nations are amongst the top five destinations for capital investment. Angola is a particularly impressive story – it ended a decades-long civil war in 2002 and since then has enjoyed genuine peace and stability.
How could the specific growth points of the Nigerian market be maximized?
Whilst the slowdown in global economic recovery, oil-price volatility and global financial developments have somewhat subdued market sentiment across Africa, however, Nigeria has enjoyed sustained economic growth for the last decade mainly attributed to its non-oil sector. Industries such as manufacturing, agriculture and professional services have been the main drivers for growth in the country. Many of the African nations, including Nigeria, realize the importance of economic diversification and are consequently fostering growth in various non-oil based industries. We also believe that developing the local SME sector and empowering rural entrepreneurs will be critical to drive future success.