Steve Babaeko, who calls the shots at X3M Ideas, a creative agency, has carved a niche for himself in the industry, having worked for 7-years as a creative director before he floated X3M Ideas few years ago. In this interview with ORUKPE NELSON, he spoke on various issues affecting the industry. Excerpts…

Looking back at 2014, what are the factors you think actually shaped the creative industry?

The advertising industry in 2014 was neither black nor white. It was somewhere in between. To that extent, you can clearly say that so many positive things happened. Some things happened at the macroeconomic level that were not so positive, which affected the integrated marketing communication industry.

Some of the positive things that happened to advertising in Nigeria in 2014 included the emergence of new agencies. There was never a time in our history when you see a couple of agencies and competing with the more established players.

A couple of these new agencies include; Noah’s Ark, Etuodi and X3M Ideas. The new generation agencies came out strong in 2014 and I find this commendable unlike the past when it was always same old players calling the shots in the industry. This is one of the biggest positives of 2014. At the macro level, the drop in OIL PRICE and its effects on the economy brings about a sagging effect on the economy and the government is telling us to brace up for tough time. This, I believe, will definitely affect the entire business climate.

Of course, the advertising segment is not insulated from what happens at the macro level. Again, politics seemed to gain the loudest share of voice, especially in the last quarter. So, it means that if money is not being spent at the centre, the economy will slow down because everybody is holding onto the cash at hand. These are the two indices I saw both on the negative and positive sides.

Are we likely to witness any major shake-up in the advertising industry?

It probably will happen. Right now, there is a systemic shift happening with younger agencies emerging. The people who were in the forefront are no longer in the driving seat. A new power block is emerging. I will not be surprised if there are more shake-ups.

Now, for the first time in a long time, we are seeing mergers and people buying into an existing company in the industry. We are likely to see more of this. What we have had are big fishes in small ponds for a long time. People don’t want to be smaller fishes in bigger ponds and that is the kind of arrangement that pays. People like Sir Steve Omojafor have talked about mergers but no one was taking him serious. It is happening now and I think we are going to see more mergers this year.

So, is the industry feeling the impact of the election campaigns?

In the Western world, election time is always a boost for the advertising industry. Saatchi & Saatchi handles the Labour Party’s multi-million pound campaign in Britain. In Nigeria, it may not be so as the bulk of campaigns are not run or executed by the member agencies of the Association of Advertising Agencies of Nigeria.

That is why we see horrible campaigns and terrible posters and election materials. At the macro level, this issue of holding money for elections will impact on the larger economy. Whether the economy captures the money in the hands of politicians or not, it means that there are certain monies that would have been otherwise injected into the system that would have made the economy more buoyant but that are missing. If it affects the economy, it will affect the advertising industry.

This is because advertising is not living in a silo insulated from the larger society. Like they say, in show business, the show must go on no matter what the economy brings. Advertising is here and people need advertising. It is actually when the economy is down that clients need to advertise more because people need to be aware of their products and services. This is what has kept the industry going.

Why have we not witnessed any advertising agency being listed on the Nigerian Stock Exchange despite the long years of existence?

Even in Kenya, there is an advertising group that is quoted but it has not happened here yet. I will tell you why. What we have done here is ‘subsistence’ advertising instead of ‘mechanised’ advertising. People create business for themselves and their families unlike the WPPs of this world, which are quoted companies.

However, it takes time to grow above the mentality of ‘small agencies for me and my family’ because if you really want to play in the big league, you can open it up for others to take up shares in the market. Some don’t even want to give their staff that worked for them up to 15-years any shares not to talk of listing. It is about mind-shift and this needs to happen to the advertising entrepreneurs in Nigeria to get the industry to that place we are talking about.

What is your take on the move by the country’s apex advertising regulatory authority, the Advertising Practitioners Council of Nigeria, to protect the local industry through its reforms?

I respect APCON. And there is a need to protect the local industry. However, water will find its level. The industry needs to be protected. I know what the law is trying to say because the outsiders have a heavier war chest to run riot over the entire industry, buy up any and kick out the ones they desire and bring in foreigners to work here. I look forward to that time when we will be able to say, “May be we have outgrown this law and we need to upgrade it.”

At some point, the economy will open up more. Nigeria is the biggest economy in Africa. Power generation is very abysmal compared to most other countries on the continent. If we are able to get electricity right and the level of output goes up, the economy opens more, then more people will come here to do business.

Already, we have vehicle assembly plants and then we will have no choice than to run this business as it should be run. Now with APCON reform, there is a limit to which foreigners will buy shares in the advertising industry. May be that law will change when the economy opens up. For this to happen, we need a massive amount of capital. How much is the capital base of most agencies in Nigeria? That is why we gave the example of subsistence and mechanised farming.

Many stakeholders have complained about the dearth of talents in the industry. What do you think is responsible for this?

I think the absence of an advertising school has been responsible for the knowledge gap in the industry. Unfortunately, we have not been able to kick-off the advertising academy. AAAN had this vision many years ago, but in fairness to the new administration, they are working so hard to ensure the school gets off the ground. But what I have done in past six /seven years ago has been to go the University of Ibadan and give lectures and do workshops.

There is a young man who now runs a small digital agency; he was part of a workshop I did at University of Ibadan many years ago. I understand the need to create the pipeline that will create talents. The talents pool is drying up. As an agency today if you are looking for copywriters, you are going to be on the lookout for months.

There are no copywriters anywhere and it’s just about the shortsightedness of not creating that pipeline that brings young talents into the industry. What we do is to use the small clout that some of us have to tell young people that there is an industry called advertising in Nigeria that provides employment where you can catch so much fun building brands and you can also earn a decent living from it. Young ones need to see us, look up to us and get excited to join the business.

What is your take on the issue of affiliation?

Affiliation is like marriage. Nobody will just walk into my agency and take it without showing me what you can offer. I can’t talk to you if you cannot offer me something different that we are not doing. I have decided that I will take some of the best practices of old agencies to run my business and learn from their mistakes.

No doubt, you must have made certain mistakes and recorded some successes last year. So, what did you do wrong and what worked for you as a company?

What we did wrong was that we did not join the bandwagon to do anything for any business. For instance, I cannot join anyone to defraud the citizens. For us to support your business, we must believe in what you stand for.

If we had jumped on the bandwagon, we probably would have made more money. But it’s all about value and principles. We must share values. In the course of doing business in the last few months, we have dropped accounts either because the value was not just right or the client was not willing to partner. We want to be partners; we don’t want to be anybody’s donkey.

If you are the brand we work with now, it is like an equal seat at the table; that is, we are partners. That is why you see the progress on those businesses. An agency being dictated to is like sending a soldier to war with his hands tied behind him. We have been fortunate enough to have found valuable partners to work with. But the ones who would not allow us do what we are trained to do and what we believed in, we gladly resigned from such businesses instead of roasting in there and saying we will manage.

There are those who believe agencies have life cycles and as such, some of the old ones may have outlived their impact. Do you share the same thought?

The truth is that every brand has a life cycle. But what happens is that you need to infuse an element of regeneration in building the brand. If you are a brand and the bull’s eye of your consumers is 30-years and above, you would be the most foolish brand if you don’t create a pipeline that leads to people who are 18 or thereabout to begin to build the next wave of consumers for the brand.

When you create the pipeline, you have corrected what would have been an aging crisis for your brand down the line that supplies your main demography. It is the same thing with agencies. Agencies are not about building or structure, it is about people.

Believe me, this business is not for old people, it is for young people. As an agency, if you want to live long, keep regenerating your people; keep the pipeline of young people coming into your agency fluid and open. An old man can have an agency, yes, that is why we have agencies of 100 years and the like out there, but they keep regenerating their people. If one fails to do this, the agency will die, no two ways about it.