EXCLUSIVE INTERVIEW !!! Govt should recognize roles Experiential Marketing plays in Nation Building- MD, Ideas House

In this exclusive interview with OLUWAGBENGA BANKOLE, the Managing Director of Ideas House, Mr. Kehinde Salami speaks on the state of experiential marketing in Nigeria, the challenges, expectation of experiential marketers from the new administration and some other interesting issues. Excerpt !

What can you tell us about Ideas House?
Ideas House is an ideation agency with special buyers for Experiential Marketing (direct and interactive marketing). In setting up our business, we have looked at the market and identify a major gap and the gap is seeing ourselves as a true strategic partner. I suppose to be a supplier of service, which some agencies are to their clients.
A supplier of service will wait for briefs and be told what to do, but true strategic partner will initiate briefs, do its own insight research and come up with recommendations that could be beneficial to its clients.

What is your assessment of the Experiential marketing industry in Nigeria in the past five years? 
I think is as evolved greatly. A number of decent initiative has come on board and I think clients are beginning to appreciate the role that experiential plays in the entire marketing eco system. Marketing has moved beyond exposure and engagement. Now it is about experience.
What I would like to see in the next five years in the experiential marketing industry is how we can infuse the world of digital marketing into a number of experiential activation. Out of 125 million phones users, 15 per cent are probably smartphone users. So atleast 20 millions Nigerians have smartphones, so in moving forward we must able to know how we can bring experiential marketing to the digital platform beyond just driving content.

What is Ideas House doing in this regard?     
For me to be taking like this it simply means that we have already seen the future. We are planning so many things which I cannot make public for now, but in the next couple of months and years people will begin to see exactly where we are going.

Do you think experiential marketers are getting the best of attention from clients when it comes to inclusion in marketing budget?
Client follows where the value is and every client want to win in the market place. What has been happening is that a lot of clients have not seen the tremendous value shift from the experiential marketing space and a number of agencies are complaining that marketing budget are being cut.
I have always said to those who care to listen that I don’t really feel that budget are being cut, rather they are being align to where value lies. So it is on your ability to sell your ideas proactively to the clients. I suppose to be in a reactive agency which is what the traditional agency does, you’ve got to be proactive, so you need to spend a lot of money on research and development, and come up with insights that will drive innovations in the market place. Having been able to do that I think you will get your required attention and budget to back your proposal.

What are the challenges of the industry so far?
To begin with, I will like to say the biggest challenge facing marketing communications industry is financial. Financing cost is a major issue; multinationals are pushing you to 60-90days payment terms, and the manner in which they are going about it in terms of how it is delivered is a big concern for me. Typically, there are two internally recognized and acceptable ways to remunerate an agency. It’s either through what we term the retainer fee remuneration model or commission based remuneration model.

What has been happening in Nigeria in recent times is clients are taking what obtains in a retainer-based structure and applying it unilaterally in a commission base structure. My comment, it simply cannot work, that’s number one. Two, finance cost, typically your agency fees covers three key line items which are your cost of operations, your manpower costs and then profit at a ratio of 40:40:20. So whilst operational cost to deliver on the project is expected to be 40% of agency commission, 40% will go to manpower cost and balance 20% is your profit. That’s what makes up your agency fees.

Now in a scenario where the client expects you to fund their PO’s, cost of funds is on average about 2.3 percent a month. With a 15% agency fee, it means a 30 day activation which has a 60 days payment cycle technically means that final agency fee has reduced to 8% (if client pays no later than the 60 days).
The model needs to be changed drastically for experiential agencies to be able to deliver good service at a reasonable cost.

What are your expectations from the new administrations?   
When we were discussing with the APCON chairman few weeks ago, I told him that the experiential marketing is a very interesting and important industry.
Currently we must employ no less that 150 to 200 thousand Nigerians working across the country in different villages and town. The money that these individuals make is what they use to send themselves to school, their parent and also start a small business. We are very important in the economic eco system of this country. What we are looking forward to is the government that recognizes the role that we play and the important of the role in the entire system. They must also give us an appropriate landscape, infrastructure and financial means to be able to impact positively on the country and our industry.

What are the roles of experiential marketing in bringing back a forgotten brand to lime light?   
In order to bring a product that is no longer in the lime light back to the people, we need to understand the causes of the downfall of the product. Is it the formulation of the product? packaging problem or distribution?
 Like some people keep saying that in marketing there are 4Ps,but I say they are 7Ps. They are Product, Price, Place, Promotion, Proposition, People and Packaging. So in solving the problems, you will look at all those 7Ps and identify where the problems lies. If there is a service gap in any of this 7Ps the question will be how to address the key issue. If it is the people issue, maybe we need to recruit the right set of people and the right number of value system. There are number of things that can cause a product not being fashionable any more. After addressing those issues, you will come up with proposition that works and back it with the right marketing tools of which experiential marketing offers. Experiential Marketing is the only form of marketing that give you the ability to see, touch, taste and feel a product.

In regard to digital campaign for some brand, what have you done so far?
We have done a few digital campaigns on behalf of our clients. We did few things for Guinness brand, MTN and some other brand. Like I said there is a proposition on the platform that we are building now that will enhance our foothold being in the digital space and that will be unveiled in the coming months.

Where do you want to see Ideas House in the next five years?   
Ideas House has got to be the most celebrated agency in the respect to his repetition for service excellence. Its repetition for the best Ideation agency the country ever produced.
As an ideation agency whose vision is to be The number one Ideas Factory Of Reference, we can only lay claim to that accolade once we win a major international award. As we move forward, we also desire to entrench our footprint in the digital space and really prep up our special projects offering creating propositions and marketing properties that have a life of their own.
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