Wednesday, October 7, 2009

Modise Makhene, Group CEO JWT South Africa, looks at the benefits of investing in Africa

JWT's network is established in Mozambique, the DRC, Kenya, Tanzania, Uganda, the Ivory Coast, Zimbabwe and Nigeria and has recently extended into Madagascar.

Do you think there are significant financial rewards to be gained beyond the borders of South Africa on the continent?

Makhene: Absolutely. For far too long, the African market has been ignored. Prior to the global economic meltdown, compared to Western economies, many African economies were growing at higher rates.

Africa is viewed as the last economic frontier. This is evidenced by the rapid growth of Chinese investment in Africa over a short period of time. The problem for many Western countries is that they did not necessarily understand the terms of business engagement on the African continent. Both Chinese and some South African companies understand how to engage the various governments and business communities and have, and are implementing their methodologies - their efforts are bearing fruit.

How does JWT South Africa combat the countless challenges of doing business in Africa?

Makhene: On one hand, the continent presents some fantastic and untapped opportunities, whilst on the other, there are challenges to be overcome.

In responding and overcoming challenges presented in African markets, one must be nimble, and flexible to adopt unconventional approaches to doing business.

A key challenge is the basic, poor communication infrastructure levels on the continent. Communication in many parts of Africa is complicated by a lack of infrastructure and seldom as simple as dropping an email, which will arrive timeously, or making a quick telephone call. Lapses in the communications system can result in lost opportunities and extended deadlines.

To overcome difficulties when building and deploying brand campaigns, it is imperative to factor in identified challenges to ensure deadlines are met and campaigns executed flawlessly. Having said that, we know that the deployment of the Seacom cable on the east coast of the continent should significantly improve bandwidth access in the near future.

What critical lessons has JWT learnt in its interactions with brands and clients on the continent?

Makhene: JWT has been active on the continent for many years, carefully developing local agencies in selected countries.

We have learnt not to enter the market with a wholly South African sensibility. JWT brings, to each market, bespoke branding and communications solutions. More importantly for us, however, is to allow, and encourage, our partners who have superior in-market knowledge, to take the lead and ownership of the various assignments we collectively work on.

Secondly, the “African market” is not a monolithic one, there is a tendency to generalise and not fully acknowledge the nuances of each market.

Lastly, we are a get-up-and-go agency and don't glean insights from Johannesburg and endeavour to apply these across our African relationships. Instead, we accept and enact a principal - get in-market and be wrapped up in each market's unique proposition.

What key trends are we seeing on the continent in terms of media consumption?

Makhene: 1. An increase in adspend driven mainly by the financial services sector, hotels, breweries and telecoms companies, particularly the mobile ones, as opposed to fixed line.
2. Whilst TV, billboards and radio are still the pervasive media because of their penetration across the continent, the mobile phone platform offers the best opportunity as an exciting medium for advertising because of its exponential growth.
3. We are seeing more credibility and believability placed on Word of Mouth communication, especially amongst the youth, making Word of Mouth advertising a viable proposition as a marketing property.
4. There is pent-up demand for social networking. Its growth however, is being hampered by low Internet penetration levels and slow bandwidth. That will change as high-speed bandwidth becomes available at fractions of current prices.

A large population on the continent is the youth, how does this segment consume media?

Makhene: Generally, the youth behave no differently to the South African youth.

The Trax research conducted by Youth Dynamix, a subsidiary of JWT, shows that the youth multi-task - they consume a foray of media at the same time, adeptly switching between them. They consume vast amounts of information from media in a selective manner. Like our own youth, these youngsters have the ability to filter and select only messages that are appealing, and of course relevant, to them.

Mobile phone penetration for youth in SA is at nearly 90%, with 88% of Kenyan youth and 50% of Nigeria's youth owning mobile phones. Again, this points to the exciting opportunity this mobile, and soon to be ubiquitous, platform offers. Increasingly, mobile phones have become internet capable, and African youth are ‘early adopters' thus tending to be the first segment of the population to access the internet and social networking platforms via the mobile phone.

“Brand Africa” has a long way to go, what are your thoughts on how the continent and the various countries could better brand themselves?

Makhene: It's interesting that when it comes to the African continent, the good achieved by a few countries is negatively impacted by other countries' endeavours. As a continent, we have to embrace the idea of nation branding.

Unwittingly, global showpieces such as the [2010 FIFA] World Cup have been catalysts in progressing much-desired awareness of nation building. Countries and their symbols are brands which need to be nurtured.

There is a fallacy of focusing too much on tourists and foreign investors at the expense of the population of the country. It is important that the message starts with the ambassadors of the country, and then builds credibly on the solid foundations of the country's own people.

It is easier for a country to manage its reputation when its own populace has bought into the concept and they are all acting in sequence. I think we will see more nations embrace nation branding as they compete for attention from investors and tourists.