Wednesday, May 26, 2010

Thought Leadership: The Game is Changing.

Uganda, the land of milk and honey, corruption and money. A beautiful kaleidoscopic picture of zen view sunsets and the gory dog-eat-dog world of modern-day capitalism. To the naked eye, the country is preparing for elections in 2011 but to the trained eye the powers that be are in anarchy.
Over the past few weeks there have been relatively few ads in the newspapers. Well this is what has been going on…

A couple of months ago all the media houses in Uganda got together and decided that agencies who book, sell, buy and plan media for the corporate machine owed them too much money and therefore they were going to stop running all adverts. They called a meeting to talk about this and they were right; agencies and clients together owed the media houses a whopping [Red Pepper style] UGX 5.9 Billion! They gave the agencies, who foolishly agreed, 90 days in which to address the delicate matter with their respective clients and get back to them. 

 
90 days later.

A couple of weeks ago Robert “KaBush” (from hereon known as Bush), summoned the mother of all meetings, he and his Nation Media Group counterpart Dr. Githinji (did you know he was a gynecologist?) had amassed all their smaller and diverse media cronies and, seated at the head of the table, announced that all advertising was going to stop running. They had done what scholars and industry watchers had thought was unthinkable, let alone undoable. They had blacklisted all media agencies; a blanket ban.
The review meeting following this announcement showed that the agencies had managed to bring down their debt to about UGX 2.9 Billion claiming that some of their clients were adamant to pay or had stricter payment procedures and therefore had not been able to remit the balance in the 90 days pending. So all advertising was going off air.

He shouldn't have:

1. Been positioned as the leader of the fight against the corporate machine because that evening nearly all MDs, CEOs, and CFOs of the corporate machine met separately to discuss this new turn of events while simultaneously the agencies also met to digest this new twist to things.

2. Put a blanket ban on the all the agencies because not all agencies had failed to pay. Therefore the whole industry being victimized for one agency’s lack of fiduciary wisdom was not perceived as just or bright.

3. Stood together with his competition to try and “Enforce” a measure that he felt was for the “greater good” because in the end he will still be standing alone to his shareholders to account for what’s happening to their investment.

The results of the meetings.

The Bush meeting ended up with an alliance signed in blood committing all the media houses to a cooperation where if you owe any single media house money e.g. Observer, you will not get be able to run your advertisement in any other newspaper. Of course this would mean increased cooperation amongst the media houses but it also posed the precarious question of commitment and solidarity. In a time when the market is shrinking and print media budgets are quickly being replaced you don’t want to be caught biting the advertisers’ hand. 


45 extra days were given and ZK Advertising, the second largest spender of advertising in East Africa since 2009 and Ignition advertising were blacklisted. All their advertising was blocked and no work would be coming through them from anyone. Instead, the media houses circumvented the agencies and went directly to the clients and got the adverts directly.
The MDs and CEO meeting resulted in reimbursement bills to their secretaries for coffees and networking time spent discussing “industry re-formation”. They all however agreed that what Bush had done was undesirable and they would have to find a way of punishing the bad boy for his behaviour. “Let’s pull all our advertising from him”, someone whispered, but just like the whisper, he was asked to speak quietly because they all needed Bush.

The agency meeting yielded slightly more than the above because they ended up forming something called the Advertising Association of Uganda. (AAU?) Kind of funny considering how much weed and alcohol those guys consume no?) They, on the other hand decided to give a united position to the Media Owners’ Association, which had triggered all of this. Some radicals said they should get together with their clients and force the media houses to apologize and come to more amenable terms of payment and relationships.


What does this mean for the future?

Bush and the Gynecologist are definitely not being loved in a lot of client circles and if you are keen there will noticeably be reduced invitations to them to attend corporate functions in the period ahead. 

A certain guerilla caucus has come together to find all the ways in which the Vision conglomerate and the Nation behemoth are replaceable starting with the newspapers. Starting at the top, they are re-doing the research, figures, rationales, and psychographics to justify why all the FMCG companies and the corporatocracy should shift from mainstream media and now invest in more audience-driven forms of media. Perhaps new media even; blogs, Facebook, websites, Twitter, You Tube, mobile phone ads, etc. Its no secret that Fireworks has a team dedicated to online/new media; surveying, analyzing, studying, experimenting. Are they about to propose a radical shift to their clientele that will extend the advertising frontier, once again?


The smaller players in this convoluted power play have failed to get their erections up to speak up for their rights and so they are doing what they know to do best; going behind the big media boys and saying ”Those guys are doing their own thing, you just give me my ads and I will run you.” The disconnect this has created is not to be ignored. The agencies have not and will not. What they do next with this crack will probably shake the media industry like we have never seen. Perhaps a total advertising blacklist of New Vision, or the Nation Group?

Let’s wait and see.

The agencies have become galvanized under one umbrella body. Whether this is a good thing or not can only be seen with the passing of time. The Scangroup behemoth (East Africa’s largest spender and biggest marketing services provider) is in search of a Ugandan Telco to bolster its ranks. They already have the East African Breweries and the regional Lafarge business to cater to. When I spoke with CEO to one of the agencies that handle one of the Telcos, she said, “What I think we should do is organize as the big agencies and squeeze these small motherfuckers out of business. Because if we dare try and stand against the media houses, they will go behind our backs and confuse our clients and next thing you know we will be royally shafted here. They can do it.” What she meant was squeeze the agencies without big clients out of business by negotiating better commissions from the media houses through bulk buying. What this would do in essence would be to force the industry to re-align reporting, billing and fiscal control procedures. So, one uniform billing document recognizable across the industry, one process. A clear signal of progress in the industry but what does it truly mean for the clients? In a world of organized and unionized advertising, there are no surprises, no game-changers, and definitely no lowered costs. The client looking for clear, distinctive and outstanding advertising and market presence will have to literally go rogue, but which agency will, or can? The argument can be made that a lot of agencies will think out of the box and go rogue. That is until they become isolated by fellow agencies, over charged by the media houses and soon rejected by the corporate machine; killing creativity, and dulling the sharp, incisive edge that it takes to cut through today’s’ advertising clutter. What is dizzyingly clear though is that the industry will never be same after this. 

Bush promised the powers that be a platform on which he would deliver the 2011 election. He gave them Bukedde TV, has opened a radio in every mainstream local dialect and is on a roll to revamp the local language papers. This happens amidst an environment where all media houses are trying to acquire more media houses. KFM, currently the most listened to station in inner and greater Kampala, is shopping for upcountry stations to bolster its arsenal of listenership and footprint, while Dembe FM recently acquired the rural based Rwenzori FM. So as the media landscape’s tectonic plates continue to shift and change one thing is for sure; we are on the cusp of something that has happened in very few other countries: Uganda is preparing to leap frog – Again!