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Nigeria PR Industry Witnessed 20% Drop in Profitability- According to Report
The Nigerian PR Industry has been suffering from a slow decline in profitability, as competing practices continue to encroach on the public relations space.
This and other revealing data are contained in the third edition of Nigeria PR Report, issued today in Lagos, Nigeria’s commercial capital, and the city with the most concentration of PR consultancies in the country.
Published by BHM Research and Intelligence, the 2018 Nigeria PR Report, records a 20% drop in respondents’ assessment of profitability in PR and a 33% increase in the number of respondents who think profitability is dwindling, reaffirming the fact that PR is mostly the first casualty when companies initiate a cost-cutting exercise.
Dwindled PR spend caused by the 2016/17 economic recession in the country manifested in the profitability of PR businesses.
‘The state of affairs has been driven largely by currency volatility, macro-economic shocks and policy issues with big spenders like MTN and Etisalat (now 9Mobile) in the Telecom sector, the Unilevers and the P&G’s in the FMCG sector crawling back with consequent squeeze on the local PR industry”, says Bolaji Okusaga, one of the key respondents whose think piece is also featured in the report.
The report, which gathers and analyses data on trends, perceptions, challenges and prospects within the industry, is a joint product of the BHM Research team and Brentt Consulting, one of Nigeria’s most respected market research companies.
Since its inaugural publication in 2016, PR industry stakeholders – practitioners, clients, investors, regulators, media and students – have come to look forward to the annual release of the report due to the useful insights that the report offers.
As in previous editions, the 2018 Nigeria PR Report looks at current trends, backed up by both quantitative and qualitative analyses.
Also, this year’s report is a product of online surveys, focus group discussions and individual interviews covering key stakeholder groups like agency CEOs, PR consultants, media practitioners and clients being served by PR experts.
The facts are presented in a reader-friendly format, employing infographics in data presentation for better understanding.
Over 400 practitioners were surveyed, over a period of 4 months. At least 25 professionals participated in focus group discussions.
Expert opinion articles were collected from Nigeria, South Africa, Canada, the United Kingdom and the US.
The 2018 edition is divided into seven sections covering various areas of interest – Research Findings,, Perspectives on Improving Nigeria’s PR Industry, Ethics and Professionalism in PR in Nigeria, Regulatory Bodies of Nigeria PR industry, Measurement in Public Relations, Perspectives from the Global PR Industry and a directory of Public Relations Agencies in Nigeria.
The first section of the report, Research Findings, is further divided into two parts of industry overview and state of Nigeria’s PR industry.
This section is a hugely quantitative presentation of industry facts and figures. It highlights a trend that more agencies in the country are recording some increase in their annual revenue.
The data shows that only 14% of agencies were billing below N5 million annually in 2017, compared to the 33% recorded in 2015.
The report noticed a 166% rise in the number of agencies who recorded annual revenues of N6 – N10 million between the 2015 and 2017 data.
There was also a 58% increase in the number of agencies who earned N150m and above, when comparing the 2015 and 2017 figures.
However, the report shows there were drops in the numbers of agencies whose annual revenue bands were N11m – N20m (9%), N21m – N50m (16%) and N100m – N150m (42%) between the years 2015 and 2017.
Overall, the report indicates that mid-sized agencies (billing-wise) did not have it as rosy as their micro- and mega counterparts.
It also highlights the fact that alcoholic beverages, with approximately 200% increase over its standing in 2016, upstaged the banking/finance, which dropped by 11 percent, telecoms (with a 38% drop) and manufacturing (even with a 15% increase) in the sectors serviced in 2017.
Over 80% of respondents checked digital/social media marketing as the most sought after/offered service in the Nigeria PR industry.
The reason may not be unconnected with the ease of measuring digital media results. Calculating reach, impressions and engagement on social media and online platforms is easy and the numbers are considered more accurate than those of traditional media.
“Digital and social media channels provide the platform for engagement and advocacy amongst a youthful, tech-fuelled population and with that comes the reputational challenges of a society that now has the power to communicate in real-time with its global ‘neighbours’.
“Now, more than ever before, PR professionals are under pressure to be more thoughtful, more creative and focused on delivering value for their clients.
“What makes a PR person different from the regular ‘tweet’ is their ability to bring to bear the traditional principles of PR in a technologically sophisticated communications terrain,” specialist in Strategic PR, Media and Reputation Management, Moliehi Molekoa, reiterates in the report’s foreword.
On PR Spend, the report indicates that most micro-, mini and mid-sized companies avoided PR agencies in 2017, leaving the space for mostly the large companies.
The data shows that companies whose PR Spend were in the bands of N0 – N5m, N6m – N10m, in 2015 did not engage PR agencies for the year 2017.
Those companies whose bands are N11m – N20m and N51m -N100m recorded a 25% increase in the PR Spend in 2017.
The disposition of communication managers in corporate organisations towards PR is the reason PR is the most hit of all companies’ supplies items in times of cost rationalisation.
This disposition even manifests more in these managers’ perception of the PR landscape as highlighted in the report.
There is almost a general consensus that the landscape is declining, with the group of respondents who are of the view that the landscape is improving dropping by 26%; those who said it is deteriorating increasing by 33%, while those who said it remains the same had also increased by 10%.
According to 70% of respondents, the skills required for success in PR are business, content and storytelling while 62% are of the opinion that creative thinking is important and 55% propose that media relations is equally important.
The report offers perspectives on improving the Nigeria’s PR industry, authored by some of the industry’s bests.
Bolaji Okusaga, a PR and communications strategist in his paper titled, Precise Projections On The Nigerian PR Industry In 2018, highlighted the performance of PR in 2017 and posited that “2018 promises to be brighter and better, given the obvious recovery of the economy and a projected increase in government and political spending being a year before the general elections.”
Nkiru Olumide-Ojo, an integrated marketing communications professional, in her article, PR: What Clients Want, highlighted some of the attributes that clients expect from their agencies.
These attributes include increased stakeholders reach, creativity and innovativeness, pedigree and good track record, professionalism, clear understanding of clients’ business, quick turnaround time, among others.
In her words, “there’s a lot that goes into being a successful PR consultancy or consultant.
“And while everyone takes a unique path, there’s one prerequisite that stands in the way of becoming successful: You have to possess a weighty understanding of who you are and what you bring to the table.
“In order to help others, you need to be acutely aware of your strengths, weaknesses, past experiences, and future aspirations and limitations.”
Ikem Okuhu, an editor of a brand publication reviewed the relationship between the PR agencies and their media partners.
In his article, Media and PR: Reviewing the relationship between two sides of same coin, Okuhu called on PR practitioners and the media men to dialogue and renegotiate how news stories should be treated, as most of the items PR practitioners pass off as earned media should actually be paid media.
Femi Falodun, a Marketing and Digital Communications Consultant, in his article, How ‘Influencers’ Are Killing Agencies and Why Clients Enable Them, advises brand managers, who run to social media influencers instead of PR agencies to promote their brands, to ensure that these influencers “really deliver value in terms of sales growth, marketing ROI, consumer behavioural change, brand recall and TOMA — the real outcomes that matter, and not just vanity metrics of Likes and Impressions.”
In his treatise, Moruff Adenekan, Marketing Communications and Reputation Management professional, also focuses on influencer marketing, expressing regret that some clients are beclouded by the sheer number of social media following of paid influencers, instead of first ascertaining whether these followers actually believe in them.
Although the report is billed to focus on Nigeria’s PR industry, there is the conscious fact that our local PR industry is not an island on its own but is also a part of the global PR industry.
This prompted the dedication of a section of the report to important perspectives on the global PR industry, which offers insightful articles by renowned practitioners on the trends of PR on the world stage.
Like the previous editions, the Nigeria PR Report 2018 is truly a collector’s item for all PR stakeholders, both in Nigeria and outside our shores.
It fills in for the omission of our local landscape in the Global PR Report, whose major focus is the top 250 agencies around the world, which unfortunately no agency in Nigeria currently belongs.
It is very informative, thrilling and presented with the reader in mind.
ARISE News Channel, Africa’s premier broadcaster, has announced its expansion into South Africa and nine other Southern African countries.
The channel is now available on Multichoice/DSTV Channel 416 in South Africa, Angola, Botswana, Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia, and Zimbabwe.
With this expansion, ARISE News Channel is now live in 54 African countries, including Kenya, Tanzania, Rwanda, Uganda, Cameroon, Sudan, Ghana, Senegal, and Cote d’Ivoire, among others.
Celebrating its 11th anniversary on January 31, ARISE News Channel continues to showcase Africa’s diversity in business, politics, technology, commerce, science, sports, show business, and fashion, while projecting the best of Africa and its cultures globally.
Nduka Obaigbena, chairman and editor-in-chief of ARISE News Channel,, expressed determination to launch the channel in all countries worldwide, stating, “The move to Southern Africa reaffirms ARISE News Channel’s position as the leading broadcaster in Africa with independence and clear thinking. We are determined to celebrate the best of Africa and tell the African story in the global marketplace.”
He added, “We shall continually showcase the emerging African century where Nigeria and other African countries will be some of the leading economies around the world. This is a marathon and not a dash: we will do for Nigeria and Africa what the CNN, the BBCs, and Aljazeeras have done for their nations and regions. In the emerging African AI- driven new information highway, no one will shape your narrative better than you.”
This week, the incredible talents of Nigerian singer, songwriter, and actress Simisola Bolatito Kosoko, better known by her stage name, Simi, will be highlighted on African Voices Changemakers, an interview program sponsored by Globacom on Cable News Network (CNN).
Simi began her career initially as a gospel singer. Her debut studio album, “Ogaju”, was released in 2008. After she got a record deal with X3M Music in 2014, she released the album “Tiff,” which was nominated for a 2015 Headies Best Alternative Song award.
Her debut studio album, “Omo Charlie Champagne”, Vol. 1, was released to mark her 31st birthday on April 19, 2019, and her second album, “Simisola”, was also released the same year. She became the CEO of her own label, Studio Brat, which she launched in June 2019.
Simi was one of the judges of the Season 7 of the Nigerian idol TV show in 2022.
Mother of a girl named Dejare, Simi married popular musician, Adekunle Gold in 2019 having graduated from Covenant University in Ota, Ogun State. Some of her works include “Joromi”, “Know You”, “Jericho”, and “Duduke”.
On Saturday at 8.30 a.m., the 30-minute magazine show will air on the global channel. Reruns can be seen on Saturday at noon, Sunday at 4.30 a.m., and Sunday at 7:00 p.m. Another rerun will air at 4 a.m. on Monday of the following week, 8.30 a.m. and 12 p.m. on Saturday, and 7 p.m. and 9.30 p.m. on Sunday.
Some MultiChoice shareholders have expressed relief at the offer by Canal+ to buy Africa’s pay TV giant for $2.9 billion, essentially viewing the potential deal as a vehicle for them to be rescued from an investment that has turned sour.
On April 8,, the deal inched closer to being cemented when the board of MultiChoice agreed to cooperate with Canal+, a sign that it was warming to a tie-up with France’s broadcasting conglomerate.
The board initially rejected the offer by Canal+ to buy the MultiChoice shares that it does not already own for R105 each, saying it was too low and undervalued the company’s growth prospects.
But MultiChoice has been convinced to reconsider its position after Canal+ improved the offer to R125 per share. Canal+ already owns 40.01% of MultiChoice shares on the JSE and wants to pay R35-billion to buy the rest of the company and take control of it.
The next big test is whether MultiChoice shareholders will support or reject Canal+’s offer, which requires support from 90% of shareholders to get the multibillion-rand deal over the line.
Daily Maverick canvassed the views of MultiChoice shareholders and industry players about the merits of the deal and whether they planned to throw their weight behind it when it comes up for a vote in the coming months.
Early indications are that some shareholders view the deal as a blessing and an opportunity to bail out from their investment in MultiChoice.
Before Canal+ made a move on MultiChoice, the latter’s share price had been down by 22% as its operations came under pressure from declining DStv subscriber numbers and intense competition from streaming services such as Netflix, Amazon Prime and Disney+.
Its earnings have also taken a hit of billions of rands because of the depreciation of African currencies against the US dollar, especially the Nigerian naira.
MultiChoice also had a run-in with regulators; in Nigeria, it ran into problems relating to outstanding tax payments. In South Africa, competitors including the SABC and eMedia (the owner of e.tv) have complained to regulators, accusing MultiChoice of anti-competitive behaviour and using its dominant position to restrict access to its broadcasting platforms and dictating restrictive licensing agreements.
The investment community response
Anthony Sedgwick, the cofounder of Abax Investments, was withering in his assessment of MultiChoice’s investment prospects. “Put frankly, we were relieved to see Canal+ finally step up and bail us out of the position,” he said.
According to MultiChoice’s latest annual report, Abax Investments held 0.34% of its shares. But Abax recently sold those shares, taking advantage of MultiChoice’s 25% share price jump since Canal+ initially tabled its buyout offer in February.
“We think Multichoice is a great business that produces an incredible variety of content, creates opportunities for so many talented people, supports a huge variety of good causes and is a real South African business champion.
“But it operates in unfriendly regulatory countries … and faces some headwinds from hard currency priced content and broadcast costs,” Sedgwick said.
Asief Mohamed, the chief investment officer of Aeon Investment Management, shared Sedgwick’s concerns about MultiChoice.
“My guess is that the other shareholders will likely accept the R125 offer. Governance has for a long time been a concern of some shareholders, including ourselves,” Mohamed told Daily Maverick.
MultiChoice’s latest annual report puts Aeon’s shareholding in it at 0.43%.
Merits of the deal
Canal+ has argued that the aim of buying MultiChoice would be to combine both businesses to create an entertainment giant that can survive a market facing intense competition and declining advertising revenue.
A combined Canal+ and MultiChoice will boast media businesses in many African countries, from South Africa and Nigeria to Senegal and Cameroon.
Not all investors are pessimistic about MultiChoice, its business fundamentals and investment prospects. In fact, when MultiChoice ran into tax troubles in Nigeria in July 2021, which precipitated a steep decline in its share price (to a low of R115), Argon Asset Management saw it as a buying opportunity. It bought MultiChoice shares and has since maintained its holding in the company to about 0.41%.
Asked why Argon remained bullish about MultiChoice, the asset management firm’s equity analyst, Richard Court, said: “Simplistically, there are two parts to MCG [MultiChoice Group]. There is the mature South African business, which, for the most part, was highly profitable and cash-generative.
“Then there is the business that MCG is building in the rest of Africa, which was actually a drag on profitability, and it was still quite small in the life of MCG from a bottom-line perspective. Nigeria takes up a lot of the bandwidth.
“We think the market was overly pessimistic on the prospects of the rest-of-Africa segment. We thought the market was overreacting to the possibility of a tax penalty coming out of Nigeria. The share price fell back and we just took the buying opportunity. We thought that MCG share was worth more than the levels at the time.”
Court said MultiChoice had managed to defend its premium TV segment (consumers who subscribe to DSTV premium packages) despite the arrival of international streaming services in South Africa.
“It did quite well in the lower segment and in the lower-cost offerings by growing subscriptions in those markets. Management was doing the right thing strategically and executing quite well on that strategy,” he said.
MultiChoice’s investments into Showmax strengthened its defence position, he said.
Argon’s house view is that Canal+’s R125 offer undervalues MultiChoice and its growth prospects.
“At the moment, we are unlikely to accept at R125. In a few years from now, if they’re able to build Showmax and if Nigeria stabilises, which we can’t say when, then I think the outlook for MCG is going to be a lot rosier than what it is now. I think the market would recognise that and that should reflect in the share price,” Court said. He was unwilling to comment on what he thought would be a fair offer from Canal+.
Canal+ said the media industry in which MultiChoice was operating “is becoming increasingly globalised and competitive, with regional media companies having to compete with the firepower of global media titans, with enormous resources to invest in content, marketing and technology…”
With a customer base of 22 million, MultiChoice’s growth strategy involves investing in local and international content for its streaming service, Showmax, and Canal+ is likely to provide capital to fund the growth.
Peter Takaendesa, the head of equities at Mergence Investment Managers, has argued that only companies with scale and a strong balance sheet are likely to survive changes in the entertainment industry.
“Canal+ and MultiChoice can leverage content and financial strength. However, there is still no guarantee of success, as the fight against global streaming giants is intense.”
Other large MultiChoice shareholders are yet to opine on the deal. They include the Public Investment Corporation (PIC), which holds 13%, M&G Investments (more than 7%) and Allan Gray (6%). Allan Gray declined to comment to Daily Maverick, and M&G and the PIC were not available to do so.
Another MultiChoice shareholder that is not ready to express its view on the Canal+ deal is Sanlam Investments, which has a 1.9% interest in the broadcasting company. Sanlam said it opted not to express its stance or intentions “considering the sensitive nature of ongoing negotiations” pertaining to the deal.
“While we understand the importance of transparency and accountability, we believe it is essential to maintain confidentiality and prudence when dealing with such matters,” Sanlam said.
The MultiChoice-Canal+ deal is likely to take two years to be completed, as it still requires regulatory approval.
Credit: Daily Maverick
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