The war of attrition currently raging between one of Nigeria’s top creative agencies, CentreSpread Limited and Skye Bank Plc, is a worrisome signal for the marketing communications industry in Nigeria. CentreSpread which for many years served as the creative agency for Skye Bank has been enmeshed in troubled waters following allegation of inability to fulfill obligations of a credit facility it received from Skye Bank.
The situation is said to have degenerated to an extent that despite signing a new affiliation with Grey Advertising, Skye Bank Plc is determined to recover the alleged debt of N1.14 billion from CentreSpread Limited and its Chief Executive Officer, Mr. Kolawale Ayanwale. The two companies are currently in court over the alleged indebtedness of the Advertising agency to the bank.
From Studio to the Courtroom
“From the court documents filed in Suit NO: LD/2362GCMW/16, CentreSpread and Ayanwale had taken Skye Bank to a Lagos High Court over alleged attempts to sell a property, which they claim is worth N1.5 billion pledged as collateral for a N850 million facility granted CentreSpread by the bank.
In an affidavit deposed to by CentreSpread, it alleged that the balance outstanding on the N850 million facility was only N525,007,700 and that it had requested the bank to restructure the facility from 12 months previously agreed to 48 months to enable it repay the facility”.
The court papers indicate that the N850 million facility granted CentreSpread in 2014 was payable within 12 months.
Skye Bank in its response claimed that the waivers previously granted CentreSpread in approving the N850 million have been forfeited by CentreSpread in view of its breach of the terms of the offer and in addition is counterclaiming the sum of N1,144,299,158.97, which it says is the accrued balance on the facility.
According to marketingedge.com, “Skye Bank has also alleged that it never acceded to the request to restructure the loan by Centre Spread and that the claims by Centre Spread are just a subterfuge to delay payment of the amount owed it. Subsequently, the bank said it has also asked the court to order CentreSpread to pay the sum of N525,007,700, which CentreSpread had alleged was outstanding in its affidavit, while the court hears the substantive suit.”
This development, according to industry watchers, could undermine the gains of the new partnership agreement between CentreSpread Limited and Grey Advertising.
Cosmetic world of Agencies
The situation of CentreSpread is only symptomatic of a deep-seated issue in the global advertising industry. Around the world, top agency executives live larger their means. Our colleagues rely on ‘juicy’ accounts to fund exotic lifestyle with an array of silky cars and a bloated wardrobe filled with designer suits in a stark world of make believe. The work environment is pimped with designer workstations, a gymnasium housing the office ping-pong table and a wine bar to complement the lifestyle of a boss.
There is nothing bad about living a good life. But doing this while some employees are owed months of salaries or some forced to take a pay cut is, to say the least, insulting to the intelligence of employees. We all want to be happy at work, where most working class people spend a large chunk of their lives, but employees aren’t dumb. They know ping-pong tables and branded work stations do make work fun or fulfilling. But It’s certainly not a replacement for a decent pay cheque.
Perks are signifiers and a way for organizations to express a commitment to a laid-back corporate culture and, at some companies, a consolation prize for uninteresting work.
Advertising is the latest industry to dabble in perks in a desperate bid to retain young workers, according to a recent New York Times article. Agencies are hoping chill vibes and happy hours will keep people from quitting. Some recent additions to offices include: a barista at New York marketing agency Deutsch Inc., beer at Ogilvy & Mather, and the ever-present ping-pong table at Interpublic’s McCann subsidiary.
Unfortunately, nap pods don’t keep workers from leaving. “The ping-pong table and Red Bull are very surface level,” said Evan Porter, who used to work at an Atlanta-based digital marketing agency that boasted both ping-pong and beanbag furniture.”
“The benefits that matter most aren’t ping-pong tables. People want health insurance, paid vacation, and sick days, the potential for performance bonuses, and a company-matched housing loan plan”, a 2015 survey by Glassdoor found.
Deep down, people just want to get paid.
An entry-level advertising job in Nigeria pays about N50,000 which is less than an entry-level job for a graduate in the Federal Civil Service.
Apart from the sway of ‘good life’ and the disaster of mono-account which often leaves agencies stranded when the job is lost, most agency top executives in Nigeria hardly put their eyes on the book balance. They are often consumed by the array of creative output and the cheques that come in return from clients.
Personal reflection
I once worked at an Ad agency in Lagos where people in the accounts department where defrauding the company and then advised the managing director to execute a pay cut because of a ‘global economic meltdown in 2008. It turned out that the meltdown in our economy was actually created by our accountants who had forged the signature of the CEO and stole identities of many of our contractors and then cashing out big time. I had just joined the company in April of that year and I did contemplate resignation. In fact, the 35% pay cut that was executed resulted in the loss of two businesses following the resignation of our South African head of client service department. Our boss was simply not paying attention to the books. The criminals who created the ‘recession’ in our agency were eventually caught and disgraced. But it was rather late in the day.
Where to go from here
Agency managers cannot afford to continue the window dressing we were used to in my early years in the creative business. Monies realised from high-yielding accounts should be invested, first in the business and then in other bankable ventures that can bring even bigger returns to the holding company. Silver Bullet in Newcastle, Publicis and Omnicom are some of the agencies that successfully diversified into other businesses. Hence they have survived harsh economic conditions like the 2008 meltdown and remain afloat despite steady decline in discretionary spending in mainstream marketing communication.
