We’re transforming the milky way
Advertising agencies in South Africa must confront the need for change if they are to survive
At the Ad Focus awards late last year, Zibusiso Mkhwanazi, the chief executive of Avatar Investment Holdings, stood on the stage with a glass of milk in his hand.
That glass, he said, was symbolic of the ad industry in South Africa.
The company’s publicist, Keri-Ann Stanton, said the audience did not exactly enthuse over the sight of that glass or its alleged symbolism — their taste for dairy obviously not sufficiently refined.
Listening to Mkhwanazi and Stanton narrate the story, I am intrigued.
Mkhwanazi says he then began spooning generous dollops of chocolate powder into the glass of milk. “That,” he said, “is what we are going to do with the industry.”
A stunt like that has to be admired for its sheer audacity, but I must admit my own biases: I’ve long complained about how an untransformed ad industry is complicit in the decline of the news media in South Africa. I believe news publishers have accepted that transformation is intrinsic to survival but the advertising industry appears to have been allowed to admit change only as it wills it.
Ad agencies, however, are facing the same digitally induced pain. Tech giants such as Facebook and Google have devoured once-lucrative margins from traditional advertising such as print and TV while keeping the lion’s share of digital revenues for themselves.
Then there are the likes of consulting firms PwC and Accenture, which have launched digital practices, further frittering away the revenues of traditional ad agencies.
So, in addition to its milk problem, the industry in South Africa also faces systemic difficulties that threaten the existence of the traditional agency model.
But it’s not all doom and gloom. The point of Mkhwanazi’s chocolate milk stunt was to announce the establishment of an African communications network, M&N Brands, to take on the global giants.
The network is the latest project undertaken by Mkhwanazi and his partner Veli Ngubane, who own a sprawling conglomerate of advertising and marketing concerns, which is a far cry from its humble beginnings.
“I started the root of what became Avatar when I was 17 years old in my bedroom with R2000 seed capital,” he says.
“In 2006, the business went through a transformative stage. Well, it was a web development business back then but in 2006 it became a digital agency. In 2012, I met my current business partner and we transformed it again. It became an integrated agency — Avatar as it is now.”
It is the biggest black-owned and managed agency in the country. In all, it employs 70 people between its Cape Town and Jo’burg offices.
“We service some of the largest clients in the country from the private sector and the government sector,” he says.
Their next big thing is M&N Brands, which, as a network of connected agencies, aims to disrupt agency ownership and then go on to compete for big contracts that are usually the province of foreignowned agencies.
It is, however, the ownership of advertising agencies in South Africa that Mkhwanazi believes is the new frontier of confronting historical imbalances in the industry.
“When you look at the ownership structure of the industry as a whole, about 78% is owned outside South Africa,” he says. “So South Africans don’t own their own advertising industry.”
And although I argue that the industry shows very little urgency to address the lack of transformation in South Africa, Mkhwanazi believes government policy is propelling change.
“It’s the charters. It’s the clients themselves wanting to ask the serious questions like, ‘I’m looking around the boardroom and I’m not seeing diversity. I’m not seeing my market’. When clients ask these questions, it is because someone within their organisation is asking those very same questions, which means there is a demand. They stem from policy, they stem from government policy around BBBEE [broad-based black economic empowerment]. So, oddly enough, the BBBEE policies are actually changing advertising itself,” he says, then hastens to add, “To an extent.”
Of course he believes that his newly launched M&N Brands is the answer to the transformation lags. “We made a movement to unite ad agencies under a banner and we can basically do what the foreign agencies are doing, but we can do it ourselves, as independent agencies. And what is driving this is the added benefit of working together. And being able then to start to build the network,” he says.
That network already encompasses 15 companies.
“So when M&N needs to go and pitch, they will possibly consider [M&N and its connections across the continent].”
It’s not quite David taking on Goliath, but David on steroids taking on a Goliath that looms so large it’s a Dubai skyscraper that you could have sworn you’d seen in New York already.
But he is confident, not in the meeting of biblical analogies with the constructed grandeur of Dubai, but in his own assessment of the way advertising agencies go about their business.
“The idea is that the businesses that are going out to the continent from South Africa are either a) South African-owned like your Standard Banks and Shoprites, well they need to be supported in the various markets they are going into, or b) it can be foreign-owned businesses, but South Africa is the preferred base for those businesses. So it is very strategic to have a network that is headquartered here in South Africa and we grow these networks in different territories.
“Then, guess what, as Africans we can then begin to tell our own stories.”
And while owning the means to craft narrative is vital to communicators working anywhere, in advertising it is perhaps even more important.
“I can produce an ad here in South Africa, but that ad is interpreted into different languages in different countries, or the concept is repurposed in different countries,” Mkhwanazi says.
“Now, on the continent, now when you start looking at it from a continental perspective, as Africans we can’t tell from an advertising perspective, we can’t effectively tell our own stories.
“The networks that sit on the continent are not African networks, they are European networks, or they come from America. So even the stories we are telling among Africans are actually being told for us.”
Mkhwanazi exudes a quiet confidence as he speaks. As a seasoned marketer he knows how to sell his business well, but there’s something else there too — a conviction to do the right thing, to make things right, that I can’t help but admire while sipping this glass of milk.
for us”