A peak into Uganda’s nascent PR industry

Tuesday March 19 2013

Roadside billboards

Roadside billboards. Through such channels, companies spend large sums on brand building. Photo By Rachel Mabala . 

By Nicholas Kalungi

In April 2011 ZK Advertising, one of Uganda’s biggest (then) PR and advertising firms summarily closed after it lost one of its key accounts (Zain).ZK had handled Zain’s (and Celtel) PR and advertising budget for about 10 years, with an agenda of transforming the telecom from a high-end-user clientele to a mass market.

However, after Zain was acquired by Bharti Airtel, a deal, negotiated in South Africa, handed this role to Moringa Oglivy, which was tasked to manage and grow Airtel’s publicity and subscriber numbers in 16 African markets.This meant that ZK had lost one of its cash cows, which was raking in about Shs2 billion annually in agency commission rated at 18 per cent on media spend.

In the over 10 years that ZK had handled Celtel and later Zain, the telecom would at least spend in the excess of Shs18 billion on brand image, media placement, sponsorships and PR among others. However, it should be noted that ZK is not an isolated case in the PR industry to have faced challenges of continuity after losing a key account.

In 2010 QG Saatchi & Saatchi, a leader (then) in the PR and advertising market faced similar challenges after it was accused of mishandling the Chogm media and publicity budget.The scandal, which dented the firm’s image, forced the exit of key accounts including MTN Uganda, and Stanbic Bank among others.

The loss of key accounts forced the firm’s operations on its knees scrambling through the fragile PR tide. The firm was in 2011 almost wiped out but continues to operate though as a market peripheral.

Fragile industry
The above circumstances are a clear illustration of a fragile but profitable PR and Advertising industry that has in the last two decades driven some of Uganda’s largest brands. A recent survey conducted by Prosper indicated that Uganda has about 45 PR and Advertising firms all competing to have a share of the seemingly small corporate market.

However, a few of the 45 including Metropolitan Republic, Fireworks, Scanad, Moringa Ogilvy and Hill + Knowton Strategies among others can boost of having an active role in the tricky PR market. Majority, according to industry players, are just struggling to survive with many said to be press release experts with no major impact on building brand image.

Mr Herbert Zzake, the Standard Chartered Bank head of corporate affairs, recently shared his frustration with Prosper about dealing with PR and advertising firms. He said the two firms that he had tried to deal with seven years ago had disappointed him thus taking a decision to handle the bank’s PR in-house.

“It was frustrating. We had to physically follow them to accomplish the assignments with virtually no value added.” However, he adds the industry is beginning to play its role, which had not been the case in the past.

“We still have a long way to go to reach the level of our neighbours like Kenya. However, with the opening of the EAC, the PR industry might take more root in Uganda,” he says.Mr Zaake’s assertions are a singled out illustration of how Uganda’s PR industry continues to struggle through a seemingly small market. Industry sources indicate that Uganda has about 45 PR and advertising firms.

These according to sources virtually employ all sorts of tactics including underhand methods as they seek to secure media space and publicity for their clients.This is attributed to the limited number of potential clients that have capacity to hire third party publicity and media expertise.

PR firms, according to a 2011 survey conducted by Synovate Uganda, rely on about five sectors that form the bulk of the industry’s clientele.

Biggest advertisers
Data obtained by Prosper indicates that MTN spent more than any other company, according to the 2011 Industry Exposure Survey.
The telecom had a PR and advertising budget of about Shs33 billion, spending over Shs28 billion more than Bidco, the 20th ranked company according to the survey.

Other companies including Airtel (Shs24 billion), Orange Uganda (Shs20b), Mukwano Group (Shs19b) and Warid Telecom (Shs17b) were also listed among the top five companies with a large media spend. The substantial amount of money involved, as seen above is a pivotal feature that defines ethical conduct of most PR and advertising firms in Uganda.

For instance it’s a known fact that media ethics continue to be compromised through the use of underhand methods crafted by PR and advertising agencies. However, even amidst such challenges, players continue to carry optimism counting on the country’s growing corporate sector to deliver better days ahead.

In an email exchange, Mr Alex Rukundo, the Metropolitan Republic managing director, told Prosper the PR and Advertising industry has registered a progressive journey of growth. “I strongly believe the industry has strong potential and there will be pain, before happiness. If you compare the industry today and five years ago we have come a long way, people ought to give us some credit,” he said.

nkalungi@ug.nationmedia.com

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