We’ll soon witness lots of M&As in the nation’s marketing communication space —John Ehiguese

The Chief Executive Officer, Mediacraft Associates and former president, Public Relations Consultants Association of Nigeria (PRCAN), Mr. John Ehiguese, in this interview by AKIN ADEWAKUN bares his mind on burning issues in the nation’s marketing communications industry, especially the likelihood of an upswing of mergers and acquisitions, in no distant future.

 

The nation’s marketing communications industry is still believed to be going through trying economic times, with some actually mooting the idea of Mergers and Acquisitions for the industry. As a practitioner and former president of the Public Relations Consultants Association of Nigeria (PRCAN), what do you think is the way out?

I think the nature  of business that we do, the  fortunes of our industry are tied to the fortunes of the larger economy. So when there is a deep in the larger economy, it affects us. because if businesses are not doing too well, one of the early signs will be a  cut in the communications budget. So I think that the recession that happened in 2016, had serious effects on a lot of marketing communication agencies. So to that extent, yes, the larger economy affected most of us, and some of us had to take a second look at our business model and find a way of  adjusting and surviving. But I think that’s behind us now. A lot of agencies are on the recovery path, because the economy is doing much better, and some have also learnt their lessons, in terms of some things they probably did wrong, or could have done better that got them into a tough situation. I’m sure they are better equipped to handle  this kind of situation in future. I think we have put that behind us. To the issue of merger and acquisition, I think at some points we are going to begin to see a lot of M&As in this industry. First, for reasons of scale. We have PR agencies in some countries that have up to 300 employees. We don’t have such in Nigeria, yet. So if you have certain kind of clients you are working for, you will require to scale up, to be able to handle them satisfactorily. So there is a place for  M&As, and I think that down the line, that will begin to happen. We have not seen it happening yet because we have certain cultural nuances that affect the way we own and run our businesses. It’s going to take a while, but I think the imperatives and the dynamics of the industry, will dictate that at some point in the near future.

 

Can you throw more light on the re-tooling and other strategies you said some agencies adopted to weather the recession storm?

The nature of our business is such that account comes and goes. And if you have a major account, leaving your business, chances are that  it will hurt you. There is no way around that, it will happen. Now agencies need to find more sustainable models of survival such  that when you lose such account, the shock is not as much as ordinarily, it should be. So it behoves on us as agencies to be more creative in the way we run our businesses, so that we are better able to handle this kind of shocks that happen in the cause of the business that we do. For me, it’s a personal challenge I’m working at, and I can assure you that next time this type of recession happens, we will not suffer as much as we did the other time. We’ve taken some of the lessons from that and is affecting the way  we run our business now.

 

As president of PRCAN, then, when recession was biting hard, how did you manage the issue of debts being owed members by clients?

For us, the challenge was more of no more business. It’s not really a matter of debt. It wasn’t as if clients were really owing us money. The issue was that the businesses were going away. Clients were saying ‘look we don’t have the budget to continue or we want to move from a retainer to a transactional arrangement, that is, when we need you, we’ll call you.’ That was what was happening. I think the issue of debt is not yet an industry-wide thing for PR. It’s more of an individual agency issue. If it had become an industry-wide issue, PRCAN could afforwd to come in at that point, but we never had such. It’s just an individual relationship between agencies and their respective clients.

 

Talking about M& A, what has been your experience since your affiliation to FH, a foreign agency?

It’s been fantastic. You know the agency we are affiliated to is a global network, and what happened, automatically, with the affiliation is that it gives us the opportunity to a vast array of resources and tools, which this network has built over the years. Besides, if I have a business in Hong Kong, for example, or in Angola, all I have to do is to get on the Network and ask who is their agent in those places, and they can talk to the client. We get a lot of business from them, too. There are some clients that are global clients of FH. So automatically,  by implications, we will handle such businesses in Nigerian market, because it’s an exclusive affiliate. So there are business opportunities that come from it. There is exposure to resources, tools, and then we also have specialized competencies. So if you choose crisis management, for example, there is a global head of crisis management in the FH Network. So if I have a major crisis, I can call the person, if he’s domiciled in Hong Kong for example, all it would probably cost me is ticket and hotel bills. If he’s free, he will come and help me out.

 

You were at the forefront of using data to drive PR practice in Nigeria, when you were at the helm of affairs at PRCAN. How far were you able to push this?

Unfortunately, I regret to announce that we didn’t make much progress. One of my objectives in office was to introduce an industry-wide research where you can gather firsthand information and data about the industry. For instance, if you ask me, what’s the billing for PR in Nigeria? I don’t know. Nobody knows. I’ve also discussed with the incumbent president. We need to begin to gather data about the industry. What you don’t know you can not measure. I was sharing with somebody that,  ‘look when you go to international conference, there are two things they want to hear from you: what is the latest research from your market? And that speaks to data. And the second is: what are the latest case studies from your market? Everything else you can google’. So if you go to international conference this year, and you talk about potential and opportunities, next year potential and opportunities, third year, the same subject, the question therefore is: when are we going to move from potential to substance? So, it’s a big challenge for us, and it’s something that we must address, whether we like it or not. We need to have an idea of the size and dimension of scale of the business in this economy. For now, you can’t plan, you can’t regulate. So that’s the challenge we face.

 

How is PR positioning itself for the AfCFTA, the trade agreement Nigeria has just signed?

I think that each agency has to prospect for business, that is position itself for such opportunities. It’s not something that you want to do at cooperative level. There is that opportunity, but the fact remains that each individual would have to make contact with the  different governments involved. You make contact with the organizations involved and if there is a genuine need for your services, then you enter into it. There is nothing happening at the association level right now, in terms of a formal pitch for business opportunities, but individual agencies are doing their best, and don’t also forget that agencies are now setting up cross-border operations. For us, for example, we wish to expand to one or two West African countries to be able to tap into these opportunities. It’s something we are really working on. Again we get brief from clients, asking us whether we can operate from five, six markets, and it’s always a minus, when you say no, and that you can only operate in Nigeria.