Advertisers must be punished for spending only 2% at black agencies

The South African Human Rights Commission inquiry into racism in the South African advertising industry exposed at least three fundamental challenges to transformation in the industry — responsible creativity, representation and redistribution. 

The five-day inquiry, held from 14 to 18 March, focused on the production chain in the advertising sector to look at ways to eliminate racism, tribalism, homophobia and sexism, among other forms of discrimination.

The first two categories of responsible creativity and racial representation in the industry have received substantial attention over the past two decades, and it would be unfair to claim that there has not been significant progress in both respects. But further reform is still needed. 

The current pressing problem is not so much racial discrimination in the advertisements. Since the TRESemmé and H&M incidents two years ago, we have not had another racism incident. The biggest problem is the racial exclusion of black-owned and black-run agencies from lucrative advertising projects.

So, it is the aspect of redistribution, reconfiguration and reallocation of work, budget and spend on suppliers and service providers in the industry that has evidenced serious inertia. Essentially, although the industry has grown in racial diversity and inclusion, which has also facilitated cultural sensitivity and tolerance in creativity and content, advertisers have yet to transform their practices of selecting and spending on marketing, advertising and communications agencies. 

The total advertising spend in South Africa is about R42-billion, according to Nielsen AdEx research. But, of this substantial amount, less than 2% is spent with the black-owned agencies, combined. In practice, one could assume that most of the black-owned agencies are just competing for smaller projects and are not provided with opportunities to pitch for those larger, more well-paying jobs. 

At face value, South African advertising is transforming itself — agencies are now the picture of diversity. As far back as 23 April 2003, the Values Statement of the Marketing and Communication Industry was codified and endorsed by industry stakeholders under the direction of the parliament portfolio committee, through the Government Communications and Information System (GCIS) and the Department of Communications.

More recently, in 2016, the Marketing, Advertising and Communication Sector Code (MAC Charter) came into effect. The charter states the history of racial inequality and disadvantage explicitly in its introduction by acknowledging that “we have been plagued by the injustices of South Africa’s racist past in terms of employee representivity, ownership and decision-making”. It then outlines its value statement that recognises that the industry plays a critical role in the creation of wealth and the development of the economy, which has to be done in tandem with the upliftment of the historically disadvantaged. 

Another important aspect of the charter is the stipulated strategic drivers of change, which together involve tangible measures, among others, the accessibility of career development and opportunities, providing financial assistance to students in the sector, mandatory intake of interns and trainees, talent nurturing pools, skills development towards migration to digital communication for the previously excluded, and promoting fair procurement processes in communication services. It is the last aspect of these strategic drivers that is most pressing for black-owned and black-run agencies. 

Whereas the charter prescribes that small qualifying enterprises should neither be unfairly discriminated against nor prejudiced; and that there should be sanctions imposed upon any business practice that undermines the provisions of the Constitution with regard to commercial expression, in reality it has become clear that a new transformation apartheid has taken root. Although white-owned and white-run multinational, corporate, large and medium-sized agencies have contributed commendably to transformation by absorbing employees and suppliers of all races, they are also receiving the bulk of the advertising spend, almost to the exclusion of black-owned, black-run agencies. 

A system of “separate development”, the official euphemism for “apartheid”, now characterises the sector. This means effectively that there is one set of stellar opportunities, with large budgets and spend for white agencies, and a third-rate set of hand-me-down opportunities for black agencies. 

There are various arguments for using white versus black service providers that are echoed across all sectors and industries when it comes to adherence to Broad-Based Black Economic Empowerment (BB-BEE), that all boil down to claims that the latter have insufficient experience, capacity and capital to deliver on large projects. What this argument does not consider, in the case of the marketing, advertising and communications sector, is that over the past two decades, a diverse and inclusive industry has been progressively cultivated, lots of skills transfer has taken place and institutions such as the AAA School of Advertising and the Vega School, among others, have produced highly trained and skilled black creatives, some of whom have done award-winning work and founded highly competitive agencies. 

This new generation of industry creatives and entrepreneurs, stands on the shoulders of giants such as Ivan Moroke (former chief executive of TWBA/Hunt/Lascaris), Happy Ntshingila (former chief executive of Herdbouys/ McCann/ Erickson), Nunu Ntshingila-Njeke (former chief executive of Ogilvy & Mather SA), and Thebe Ikalafeng (founder and principal of Africa Brand Leadership Academy), among others.

Happy Ntshingila, in his memoirs titled Black Jerusalem, chronicles how he, Peter Vundla and Dimape Serenyane, in 1991, founded the first black advertising agency, Herdbouys, that secured blue-chip accounts such as SAA and Coca-Cola, amid much trial and error. 

Thirty years later, it is unacceptable for advertisers to peddle the excuse that they do not know any black agencies, that they are incompetent, or that they cannot find them. In 2016, a directory of black-owned and black-run agencies (www.blackagencies.co.za) was established as a proactive measure to start addressing this exclusion and to make it easier for advertisers to find black agencies. 

So what is the potential solution? 

One is a radical route, but perhaps, the time has come where it is required. We believe that the Economic Freedom Fighters’ proposed punitive approach has merit, where Mbuyiseni Ndlozi demanded at the inquiry hearings that the industry should be fined R50-billion for racism. But, where we differ with him is that instead of punishing white-owned agencies for having been appointed to do the work by advertisers; the advertisers themselves should be punished for giving them the work. To this end, they should be fined 15% of their annual turnover if they continue to violate the stipulations of the Marketing Advertising Communication Sector Charter. These offending advertisers are listed in the “Nielsen AdEx Top 50 SA advertisers” online report (as at 2017). 

Over and above the advertisers being fined, we believe they should also be “named and shamed” for their lack of efforts to transform. Black Agency together with the department of trade and industry needs to create a system that monitors who advertising projects are assigned to. This will make it easy for us to track repeat offenders and talk to them so they can take corrective action.

On 25 March 2022, the minister in the presidency, Mondli Gungubele, launched the MAC Charter Sector Council that is tasked with monitoring  transformation of the industry to enforce the charter and measure the progress. Representatives have been nominated and appointed as non-executive members who will serve for a period of four years.

So the question now is whether the MAC Charter Sector Council has sufficient powers and capacity to bring about the necessary redress, or if it comes to it, to enforce sanctions and punitive measures.

Economic redistribution, whether by way of affirmative action, employment equity, BEE and so on, is understandably a sore topic given how systemic corruption and lack of public and private sector will has compromised the implementation of these interventions in South Africa. At the same time, there is no justification for black agencies receiving a mere 2% share of a R42-billion industry, in a majority black population country. 

There is the alternative, practical and equitable route, where marketing and procurement managers from the mentioned Nielsen AdEx Top 50 SA advertisers, follow the cue of white agencies by paying more than lip service to transformation and inclusion.

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Bongani Gosa
Bongani Gosa
Bongani Gosa is the founder and chief executive of BWD Advertising.

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