Arun Sudhaman 13 Sep 2013 // 10:50AM GMT
For the PR industry, the Africa story is finally becoming an attractive one. A rising continent which is starting to flex its economic muscles means opportunity for public relations firms, of the kind that few would have envisaged when considering the continent’s PR prospects as recently as five years ago.
In the last couple of years, notably, numerous global PR networks have flocked to the region, buying agencies and launching offices, focusing in particular on the key markets of South Africa and Kenya.
Housed within the continent’s most mature PR market, you would imagine considerable optimism about this turn of events from South Africa’s PR firms. While the country’s PR industry is relatively sophisticated and well-funded, it is small, unlikely to top much more than $50m in fee income.
Against that backdrop, and with numerous businesses aiming to lead their African communications from Johannesburg, there would appear to be a natural opportunity for South African PR firms to expand their scope across the continent, building on their experience in the manner of expansionary agencies in other hub markets such as London, New York and Hong Kong.
This would help explain why most of the global networks have chosen South Africa as the first place to establish a foothold on the continent, whether by acquisition (Burson-Marsteller, FleishmanHillard, Edelman) or through a start-up (Text 100, Waggener Edstrom, Weber Shandwick).
“Everyone is catching up on the Africa story,” says Vincent Magwenya, CEO of Omnicom’s Magna Carta. “Global networks are being led here by their clients.”
The 2009 recession, say many observers, is one of the drivers of this trend, recalibrating traditional notions of risk as MNCs seek to capitalise on Africa’s high-growth opportunities, particularly in such industries as mining, energy, telecoms and consumer goods.
South African PR firms have substantial experience in all of these industries, supported by a well-developed financial services sector. “We have a scope of agencies that are tried and tested, bigger and stronger,” says Peter Mann, CEO of independent firm Meropa. “You do have a one-stop-shop opportunity.”
Mann also points to a strong entrepreneurial streak among the country’s PR community, illustrated by a startup agency culture that rivals London and New York. In addition, many South African companies, such as telco MTN, Standard Bank and retailer Shoprite, are expanding into Africa, calling on their local firms to develop stronger regional capabilities.
“We are trying to take the lead agency role,” says Elian Wiener, MD of fast-growing independent Epic Communications. “That Africa capability is going to be a big factor for them.”
Despite South Africa’s advantages as an African PR hub, there are plenty of people who believe that this outcome is far from a foregone conclusion. “South Africa has no patent on smart PR,” says Francois Baird, who sold his 26-year-old Johannesburg PR firm to Edelman earlier this year.
Baird, who has spent a couple of decades building a pan-African network of “collaborators”, as he calls them, thinks that South African PR agencies are deluding themselves if they think that a strong domestic industry will seamlessly translate into a broader African offer.
“The industry here is more mature,” contends Baird. “But that could be your downfall. They think they are so smart they can simply apply what they know.”
Many African countries are “incredibly difficult to work in,” says Mann, who admits that Meropa’s attempt to establish a hub model in 1991 “absolutely failed.”
“There is an opportunity but I don’t think it’s being realised.” adds Mann. “South Africans are not necessarily that popular in Africa. We’re seen as quite arrogant. I think South Africa may be falling behind.”
Meanwhile, Kenya and, to a lesser extent, Nigeria are seeing fast-growing levels of PR activity. Africa Practice, perhaps the only genuine, wholly-owned pan-African PR network, has its largest office in Nairobi. International MD Natalie Maule notes that while Johannesburg remains the most advanced PR market, that is likely to change over the next five years as Nairobi and Lagos catch up.
“If you are sitting in Johannesburg you don’t necessarily have as nuanced an understanding of the politics of other African markets,” explains Maule. “You don’t necessarily have to look outside South Africa.”
Agencies in those countries, such as Kenya’s Gina Din, Apex and Scangroup, and Nigeria’s Quadrant, are “probably less afraid of operating in Africa than South African agencies are,” says Wiener. “Although the global companies still feel more confident about dealing with South Africans at this point.”
Even so, building a pan-African network is easier said than done. “There’s a lot of complexity and uncertainty about how best to do it,” explains Wiener. “Do you acquire and partner, or do you send someone over?”
Most South African agencies have built affiliate networks. Yet, because many African countries suffer from a paucity of good PR agencies, those affiliates are often shared. And as the global networks step up their African expansion, it is likely that many of the good independents across the continent will be acquired. “You’re going to see a rush to acquisition, especially in Kenya,” says Kevin Welman who leads Fleishman-Hillard’s South African operation and its pan-African affiliate network.
Baird, for his part, believes this strategy is fundamentally flawed. “You can’t be a hub unless you have Africans here working with you in situ.”
“Thinking you can run your own offices in Africa is tough,” he adds. “Firstly, project management is key. We’ve built a billing model for that. You must have a capability to deploy in places where you are not at fairly short notice. This takes years and years.”
Then there are the costs associated with identifying and managing agencies in less-developed markets, which often prove to be more expensive than their more mature counterparts, thanks to high energy and telecommunications costs. “It’s incredibly expensive and not for the faint-hearted,” says Mann.
Neither can language issues be overlooked. South Africans love to point out that the country has 11 national languages. That list, though, does not include Portugese and French, which are key languages when considering the opportunities available across the rest of the continent.
“An African PR hub could be run out of any country,” states Waggener-Edstrom South Africa MD Marcus Sorour. “What’s important is the track record and experience of the agency managing the hub, their systems and most importantly the quality of the people the agency has on the account.”
Sorour thinks that South Africa’s PR firms are still too focused on their domestic market and immediate environs. “Generally speaking, PR in South Africa is still very transactional,” he points out. “And pan-African hub work is focused on coordination, press release generation and reporting.”
“For people who want to capture the wave of growth, they have to be in places like Tanzania and Ghana,” adds Maule. “There’s great appetite for a sophisticated service offering.”
South Africa’s hub hopes should not be written off just yet. Magwenya, for one, thinks that the country’s PR firms have some unique advantages over agencies from Kenya and Nigeria, to say nothing of Angola, Ghana, Tanzania and Rwanda.
“There is a level of diversity here that is quite complex,” explains the Magna Carta CEO. “We live in two worlds in one country: the part that is highly developed and the part that is quite marginalised.”
“What our industry does well is straddle both these worlds, which puts us in a good place to embrace the rest of Africa,” continues Magwenya. “ You need to find ways of reaching out to that market in a manner that is socially acceptable.”
South Africa’s vibrant and independent media, furthermore, means that its firms are adept at tailoring messages to different audiences. “I don’t think firms in other African markets are as good at doing that,” says Magwenya. “They don’t have the media that demands that high standard of communicating. The media is quite demanding here and very discerning as well.”
Yet any regional aspirations that South Africa’s PR agencies might have are tempered by the biggest challenge facing the country’s communications industry: the cut-throat war for talent that mimics other small, mature PR markets.
This challenge, says Sorour, becomes only more pronounced when considering the specialised staffing needs that hub teams require.
“The team on a hub is crucial,” he points out. “It goes beyond the PR discipline. Individuals need to be self-aware, flexible and problem-solvers. They need to understand the complexities of working across a diverse continent. Context is very important when working in an African hub. South African agencies will need to make more time to invest in staff – from training to travel opportunities.”
For global networks and independent South African firms alike, it seems clear that a cohesive pan-African capability is no longer a luxury they cannot afford. As the PR industry in Kenya and Nigeria matures, perhaps it is the very idea of a single African hub that is under threat, rather than South Africa’s prospective role.
Like Asia-Pacific, for example, there is enough evidence to suggest a more viable model of three or four PR industry hubs, given the geographic diversity and scope of the African continent. Either way, South Africa’s thriving PR industry appears well aware of the adjustments that are required if it hopes to capitalise on growing interest in Africa’s broader rise.
“There’s a growing feeling that Africa has lost out over the last 50 years,” says Magwenya. “Africans are asking people to show that you understand their environment. Don’t just talk.”