Drop in Profitability of PR Businesses, 2018 Report Discusses Way Forward
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 turn around 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.