Tough time: Some agencies struggle as others clutch accounts

After first half of 2014, a year expected to be buoyant for media agencies following envisaged plethora of activities, some agencies are still struggling while others are clutching to their accounts tightly, perhaps with innovations and value creative works.

Some agencies, both public relations and creative, hoped on the 2014 World Cup to put bright sunshine on their fortunes. During the period, some agencies smiled while some grind, an analyst says.

Some of the agencies are looking towards politics for succour, as serious minded politicians would like to engage marketing agencies for professional and meaningful communication messages, he says.

Between marketing communication agencies and their clients, it is no more business as usual as the later look deeper for superiority of ideas among agencies to drive their businesses. The source says some of the agencies have accepted pay cuts to retain business.

Another trouble for agencies is that, according to the source, some companies have extended payment terms for business beyond 30 days to up to 180 days, and sometimes over a year.

This development, he says, is adding pressure on the media agencies, some of which could not meet their obligations to banks, the news media and other sources. The source, who prefers anonymity, says the delay in payment for contracts executed has been a recurring issue, but “as it is now the clients are taking this for a ride without considering the agencies’ pains.”

He explains that clients’ delay in payments to Nigerian agencies is stifling agencies and media business. But it appears the agencies in Nigeria are careful of making their protests loud because they want to avoid incurring the wrath of the advertisers who dictate the media business pace.

A managing director of an agency in Ikeja, who prefers anonymity, says sometimes agencies wait for six months to be paid for jobs executed with borrowed money.

“It is tough for agencies doing business here. The banks are also not helping matters. We borrow at over 22 percent per annum and that is when the banks agree to support you to do the job and wait for payment,” according to him.

Some of the agencies much affected by the tough times are those not on retainership as some of the companies have tuned down their activities.

Earlier this year, Lanre Adisa of Noah’s Ark, who believes that a couple of agencies will be busy in 2014, considering that it is election year, said that this year will be about engaging clients more than anything else. “What will happen going forward is about supremacy of ideas and good thinking, and clients want good value for their spends and they will look for those agencies,’’ he said.

Daniel Obi