FM AdFocus: Transformation continues to challenge the ad industry

By Lynette Dicey

Transformation has long been a contentious issue in the advertising industry. The Marketing, Advertising and Communication Charter (MAC Charter) was promulgated in 2016 replacing the generic BEE codes and giving the industry specific BEE targets. However, despite the existence of the MAC Charter criticisms that the industry is not transforming quickly enough have been persistent. Of the 11 largest agencies, the majority have achieved the MAC Charter’s 45% black equity targets with eight agencies boasting black ownership of 51%. But ownership is not the only requirement for a transformed industry.

The issue of transformation was the focus of a recent digital discussed moderated by Bongani Chinkanda, founder of Diaries of a Salesman in conversation with Pepe Marais, the group chief creative officer of Joe Public United, Khensani Nobanda, group executive: Group Marketing & Corporate Affairs, Nedbank, and Veli Ngubane, founding partner and chief creative officer at Avatar. The panel discussed how the industry can move forward together to build a more diverse and inclusive sector.

The industry still has a long way to go in terms of achieving transformation, maintained Ngubane. He maintained that the benefits of transformation have not been sufficiently communicated and argued for punitive consequences for those agencies that continue to operate under the radar and have not transformed sufficiently, as well as for those that have used the BEE codes to navigate the regulations without transforming in the spirit in which the codes were intended. Too many businesses stop prioritising transformation once they have received their BEE certificate, he insisted.

Joe Public, which recently announced that 60% of the company had been acquired by black shareholders making it the largest majority black-owned, independent agency group in SA, started focusing on ensuring the agency was more diverse as far back as 2005, revealed Marais, adding that the motive for this was not based on scorecards but rather an intuitive realisation that the agency would be more creative with a more diverse team on board.

Marais said he disagreed with Ngubane that there was an industry wide resistance to transformation and – while he agreed that there was still much to be done – he argued that many agencies had made significant strides in terms of transformation and were focused on strategies to improve the pace of change. Joe Public has recognised that challenge of ensuring its staff compliment are 85% black and said a more realistic goal would be 65%.

Nedbank has long held the view that it can’t be a sustainable bank unless the country is successful, said Nobanda, adding that diversity and transformation were therefore a priority from its perspective. She said there was value in both wholly black owned agencies such as Avatar as well as agencies like Joe Public who recognised the value of transformation. In addition to utilising the services of Joe Public, the bank has also ring fenced budget allocations for smaller black owned agencies in order to allow them to grow and develop. Fortunately, she revealed, the bank’s procurement team has bought into its transformation vision.

Chinkanda agreed with Ngubane that punitive consequences needed to be revenue based for those businesses that had not transformed sufficiently given that the industry does not require a license to operate. At the same time, clients need to be more conscious of where their advertising budgets are going. “Even if your ownership and management teams are black, it’s a problem if your client facing team are not sufficiently representative,” he said.

The last word went to Marais, “The narrative that nothing has been done (in terms of transformation) is not true,” he argued, conceding, however, that more needs to be done.

The big take-out: While progress has been made, transformation continues to be a challenge for the advertising industry.