Extreme Expansion: How X3M Ideas Is Taking On Africa
By Jeremiah Agada
The African Economic Outlook 2017, a flagship report of the African Development Bank, has noted that trade between African countries has the greatest potential for building sustainable economic development and integration for member countries as well as the continent in general.
The need to engender more intra-African trade at a time like this can therefore not be overemphasised. Currently, the continent only accounts for about 15 per cent of total intra trade. When compared with intra-trade in other continents – 67 per cent in Europe, 58 per cent in Asia and 48 per cent in North America – this is quite low.
Conscious private and public sector driven efforts, thus, needs to be made at improving the low trade interactions within the continent. At the last count, 49 African countries asides Nigeria and five others, came together to sign the Continental Free Trade Agreement (CFTA). Under this continent-wide agreement, nations commit to cut tariffs on 90 per cent of goods with the aim of increasing intra-Africa trade.
This, among other factors, has led to signs of improvement. According to a most recent data from Cairo-based African Export-Import Bank (Afreximbank), intra-African trade grew by 8 per cent in the first nine months of 2017; with Guinea, Ethiopia, Burkina Faso, Equatorial Guinea, and Sierra Leone in the lead.
This is definitely better than the marginal 0.6 per cent growth to US$156.94 billion recorded in 2016. Even so, there is still many roads to cover before intra-African trade recovers to the 2013 peak level of US$174.9 billion. And as recent as 2015, intra-African trade growth was almost 9 per cent. Afreximbank attributes the latest recovery to rising commodity prices, “improved regional trade across regional economic communities and some countries’ increased focus on promoting intra-African trade.”
X3M Ideas 2.0
It was based on this background, says Steve Babaeko, Chief Executive Officer and Chief Creative Officer of X3M Ideas, that X3M Ideas, a non-affiliated agency in Africa and one of Nigeria’s foremost new generation creative powerhouses, decided to expand its operations beyond the West African region to Central and Southern Africa to boost its intra-African business as well as boost intra-Africa trade. He did this with the official launch of X3M Ideas SA PTY Limited, a full-service agency in Johannesburg, South Africa, earlier in June, this year.
At the launch, Babaeko had said that X3M Ideas SA PTY is the arrowhead enterprise that will drive the agency’s footprint across South Africa, Zambia, Botswana, Zimbabwe and Mozambique. The new operation is from the stables of X3M Group but wholly independent with a different Board. “Our business model is not just based on South Africa; it’s the South Central Africa model. So, as we set up in South Africa, we are also in the middle of finishing our set up in Lusaka, Zambia; and with this two its like a crab’s pincer movement. With these two, you can successfully do your business across South Central Africa.”
The expansion move, Babaeko noted in a recent chat with Brand Communicator team, is part of a five-year plan to extend the frontier of its operations to other parts of Africa. It is the agency’s inroad to other parts of the continent, in its mission to consolidate on the African Advertising business by selling black excellence across the continent especially in the field of advertising. More emphatically, he said, it is also part of a deliberate move to boost intra-Africa trade.
“What you’ve seen us do so far is based on our five-year plan. So far, we have smashed all the milestones we set out to achieve at the beginning. In our sixth year, you are seeing the beginning of the next five-year vision and that is with the launch of our X3M PTY. We still have so much in the offing to achieve. In another four to five years, I see X3M becoming an independent network on its own because once we are done with this, we are heading to East Africa, and we will start with a country like Rwanda where we’ve really been having conversations already. We might still partner some other people and set footprints across the continent.
“This expansion gives us the opportunity to interact with other brands both local and global at whatever level and still be able to take those best practices and apply. We need each other on this continent. What I believe is nobody will help us solve our problems in this continent, as black people we can solve this problem ourselves if we put our minds to it.
“I have always felt that there are so many people on this continent for us to have a situation that we have currently where we are not doing business with each other. There are about 1 billion or over 1.3 billion people on the Africa continent. If we make it easier for us to do business with each other, we don’t even need too many people outside. Because if we look at the other regions, such as America, South East Asia or Asia, North-East Asia or Europe, the level of intra-continental trading is higher than what you find in Africa.
As one will note, the move is also a deliberate one to follow its clients every step of the way. “Everything we’ve done also is to create avenues to serve our clients better, sometimes, we even go as far as looking into the future and services that they don’t require now that we think they might require.
“We have to move with our clients in the direction they are going. We will be living in a bubble if we don’t do the same because we are already providing some kind of quality services to them in this market. We can transport some of these services to other parts of Africa.”
For Babaeko, the choice of that part of Africa with South Africa as the arrowhead of its operations is also based on some economic reasons. “For us, it’s also for economic reasons, in the sense that we need to empower our people. There is no way we are going to set up in South Central Africa that we will not hire people from those places. I see this as providing economic empowerment, more job opportunities for the black people on this continent.
“With no disregard to Ghana and others in West Africa, Nigeria is West Africa. We are already strong here and we have already established relationships with agencies in other West African countries. When they want to do something here in Nigeria, we represent them and do it, and vice versa.
“The next big market after Nigeria is South Africa. So why setting up in the tenth biggest economy when the second biggest is there? I believe if Nigeria and South Africa can get it right on this continent, you will see the beginning of a turnaround for good of the African continent. So, the journey for me is putting things together and contribute our quota to the economies of these two great countries. Those are the part of the reasons propelling us to do what we are doing now.”
X3M To The World
The imagery of a six-year-old-boy taking on a millennial old entity may appear comical. However, when looked at it closely, it is an audacity worth celebrating. That is the case with X3M Ideas that entered the Nigerian market and wasted no time in asserting its place at the top with the leaders of the pack at what can better be termed Africa’s most competitive market. Local, continental and global awards for the agency proves this beyond doubts.
For instance, X3m Ideas in 2016 won three gold, one silver and one bronze in the Best Use of Socio Media category at the prestigious African Cristal Awards in Marrakesh, Morocco. A year later, it came back stronger and won an award as a creative advertising agency with strong digital competency by winning a gold and two Emerald in the media category of the awards. Also, at that Awards, the agency won one gold with Oando O-Gas Switch, under Promo Direct, one Emerald with Oando O Gas Switch under Promo Direct “Client Acquisition,” and another Emerald with Etisalat (SUPER RECHARGE 1.0) under Promo & Direct ‘’Client Acquisition.”
At the City People awards held in 2017, the agency bagged “Fast Rising Agency of the Year” award. The same year, Marketing Edge also awarded it the Outstanding Creative Agency of the Year and also at the prestigious West Africa Innovation Awards, it finally won the Most Innovation Driven Creative Agency in West Africa (Brand Innovation Category).
X3M Ideas has also been consistent in winning awards since it began to enter for the Lagos Advertising and Ideas Festival Awards (LAIF). In 2015, it occupied the 4th position on the medals table of the LAIF awards. It’s unflinching innovative and creative consistencies for an impressive third year running as the young agency also showed at the 2015 LAIF Awards with the calibre of creative works that won awards for the agency. The result showed that the agency has consistently improved as it coasted home three Gold, two Silver and three Bronze medals.
It will be recalled that X3M IDEAS, the future-forward marketing communications agency, made its debut at the LAIF awards in November 2013 barely one year it opened shop in August 2012 to record one gold, two silver and one bronze medals.
The agency also recorded two gold, five silver and six bronze medals carting home an impressive 13 medals in the 2014 edition of LAIF award. Apart from 17 medals at LAIF Awards, the record shows that the agency has received additional awards from different organizations, over the five years of its existence.
Most recently, the agency performed credibly at the 2018 African Cristal Festival in Marrakesh, Morocco earlier this year to announce its continental influence, emerging one of the most awarded agencies in Africa. It carted home 12 awards last from the continental showpiece.
Notable among its awards that evening, is the Grand Cristal for Goodvertising, one of the highest awards of the festival which it won for its self-sponsored anti-depression social service advertising tagged “Look Beyond” which broke last year to support the Lagos State’s effort at fighting a sudden increase in the rate of suicide.
The X3M Cristal medals haul which becomes the largest units of awards by a Nigerian agency at the 2018 event, establishes the nation’s advertising industry as coming of age bearing a strong and growing voice on the continental advertising landscape.
“At the African Cristals, we met a number of these global players. Some asked me “Steve, what global agency are you affiliated with?” I told them, “We are an independent agency.” We are one of the few or only independent agencies that won the awards like these. We won 12 medals at the event. Major Player in South Africa came to the award, not all of them won at this level! So, we are already competitive. We are not going to South Africa as a poor cousin, we are going out there as a company that has done something substantial in the Nigeria space and we are ready to impact the African region.”
This is following what many observers will term the renaissance of the Nigerian Creative industry. This is an industry that hitherto, has been taking the back bench position as far as awards on the continent are concerned.
X3M Ideas Minus Affiliation/Partnership
It is no news that X3M Ideas has been in the market since inception with no form of affiliation or partnership. This says a lot about its achievements in the very short time in operation. Going fully continent with X3M Ideas PTY, coming at the point in time when the Group just turned six earlier in August is only timely as it has joined the exclusive list of the very few Nigerian agencies that are expanding their frontiers beyond West Africa. This makes it the first Group to expand outside Nigeria to Southern and Central Africa.
The clamour for long has been on how Nigerian agencies can on their own become networks that can buy into groups following dissatisfaction in different climes over the current status quo as long as affiliations and partnerships are concerned. Before the wave of affiliations and partnerships in the Nigerian advertising landscape, two schools of thoughts existed on the subject among practitioners. Even as some advertising professionals held strongly to the view that affiliation or partnership with foreign agencies will put the nation’s advertising industry in a disadvantaged position, others believed that the move will spark growth and development within the industry.
Amidst these divergent views, the Advertising Practitioners Council of Nigeria (APCON) introduced the 5th APCON Committee on Advertising Reform (ACAPR) in 2013 which stipulated that foreign agencies that wish to play in Nigeria’s advertising space can only own a maximum of 25 percent stake in the local agency, a move that sparked off a huge controversy among stakeholders in the advertising industry. Although a section of the industry hailed the 5th ACAPR as the best thing to have happened to the industry in a long ting, several agency owners argued that the reform needed re-evaluation.
Babaeko’s views and opinion on acquisition, affiliations and partnership has always been vocal. “Affiliation is good, but we have all seen the way our people have done it before, it’s not working. Everybody is unhappy with their partners because our people do not have the controlling share and APCON reform says that no foreigner can own more than 25% of a Nigerian operation, that’s the law for now and we must all respect the law. We can’t keep doing the same thing and expect different result; these guys that are coming here to do affiliation do not have two heads, so why don’t we own our own network, and begin to power the African economy. It can be the most difficult road to travel but sometimes you need to travel the most difficult road to break a record and that’s what we are trying to do here.”
Even with the Group taking up the shape of a continental network, Babaeko lends to his voice to the growing call for merger within the advertising industry in Nigeria. “Definitely, we are not going alone into some of these markets, even though we have this South Central Africa project, we actually have people or companies we want to merge with or acquire. In Nigeria, it’s inevitable if you don’t merge in the next five years because you will mention some agencies and you will say ‘I used to know them.’
“We have no choice than to merge, people need to get acquired because the old school ways of staying a “big fish in a little bathtub” is gone. Nothing is wrong in smaller fish in a big pond and that is what merger and acquisition will do for you. Right now, we face a very funny situation where the clients that we are serving are closing shops or reducing while agencies are increasing which is not normal, and that is the reason why a lot of agencies are struggling. So, we will realize at some point that there is a need to just merge and work together. Mergers are inevitable. Without that, people will die, companies will die and common sense will prevail eventually.”
Overcoming Challenges In The New Market
Practising creative advertising in West Africa is certainly different kettle of fish from what is obtainable in the Southern African market. Outside demography and psychographics, and of course breaking into a new terrain, other socio-economic challenges like xenophobia in South Africa, may be daunting to the new agency. Babaeko reacts to this. “I really don’t see xenophobia as a big challenge. Every country is dealing with internal problems. I am sure the South Africa governments are on top of these issues. We are comfortable doing business in South Africa or anywhere else. We just need to push the Africa agenda more, if we want this continent to be better for all, we need to cross-fertilize ideas to take our businesses to the next level and develop each other. There are certain best practices already available in Nigeria within the marketing communications, which we know will be useful in South Africa.
The vision is to leave an indelible print across this continent. So, we are taking it region by region, this is just the starting point.
“As a businessman, you will face different challenges in business. But I can say that South Africa is a good place to do business, just the way they come here to do business. There are rules, and when you follow the rules you wouldn’t have any problem. They are very open to seeing other people come to their side and do business.”
He adds: “We are the Marines of the Advertising Industry, we look challenges in the eyes and snatch victory from the jaws of defeat. Our dream is to leave indelible footprints across this great continent, this is only the beginning”. Right now, we are the major player on the continent.
“We are not afraid to start small. In all of the markets we have been, we start small at the beginning. South Africa market is ahead in terms of budget and again you should know that South Africa market is already saturated especially at the level of the multinational players but there are still opportunities.
“We started with nothing and we are still much work in progress and there is so much work to do. We started with 7 people and today we have more than 100 people across the group. We are very much a work in progress. This is a mission to consolidate Africa Advertising businesses on the continental level, how easy is this likely to be? It’s been a tough and challenging adventure, a big lesson in patience and perseverance.
“It is clear, it takes you to have that courage though it’s not easy to achieve, it costs money and time but now we are probably one of the few agencies that did not raise money from anywhere, we generate our money and propagate the gospel of selling black excellence across the market. Someday we will consolidate the market for the whole world to see.
Unique Selling Proposition of X3M Ideas PTY
On the unique selling proposition the new agency is looking to bring to the region, he says, “Our record as X3M ideas is there for the world to see. We brought a bit of freshness to this industry. One of the landmark achievements we made is that most agencies lived for 20 years but they can’t even count the brands they touched positively, I can count how many brands we touched positively. The relationship we build with clients is much more important than the financial aspect. As a person I am passionate about what I do, I’m not driven by money. I want to take a brand from here to there where they can compete with others.
Speaking in retrospect, he said, “In 2012 when we started X3M Ideas, not only did we not have money, we did what most neophyte entrepreneurs would do, we used the little money we had for window dressing. From where we stood at the time, it made eminent sense for the office space to have more than a bit of glitter, we completely forgot about salaries and overhead. As the first payday approached I went into a full panic mode, frantically looking for buyers for my Honda Accord so we could make payroll.
That was over 5 years ago. Since then we have gone ahead to build X3M Ideas into a creative powerhouse. Winning pitches and hauling awards worldwide. Expectedly we have been given our due accolades, the statement added.
“We are still not big; we are still operating on the mentality of a start-up. Even I am sure, Amazon still operates as a start-up. The size is just a matter of mind. We started with nothing and we are still much work in progress and there is so much work to do.
“It takes courage to forge ahead and achieve objectives which are not easy. It costs money and time but now we are probably one of the few agencies that did not raise money from anywhere. We generate our money and propagate the gospel of selling black excellence across the market. Someday, we will consolidate the market for the whole world to see.
“We are only going to replicate those values and operational philosophies that has guided our operations in Nigeria. We will leverage on technology to help power what we do for clients, keep that never say die attitude, being respectful to our clients, and be ready to bend if possible to render a promise made to a client. All these values are still central to the X3M brand no matter where we go to because these are the set of values that make us who we are. We intend to continue to push all of these values anywhere we go.”
X3M Ideas Nigeria In Retrospect
An appraisal of X3M Ideas’ six years of operation in the Integrated Marketing Communication enterprise showed that the agency right from the time it opened shop on August 01, 2012 is a repose of excellence, creativity and innovations. The agency has solidly established itself as one of Nigeria’s fastest growing marketing communication agencies that have demonstrated uncommon courage in contributing meaningfully to the advertising business in Nigeria.
Being a full-service agency, X3M Ideas’ vision since inception has always being to be the best local agency providing global solutions to drive innovative marketing ideas and strategies that support and build its clients businesses. Over the years, there is nothing the agency has done that has being outside that vision. Backed by sound strategy and unique thinking, the agency aims to always be the partner that understands the brand and the clients; creating superior value for the clients, employees and shareholders.
At X3M IDEAS, every campaign is measured for impact and effectiveness and that is why the agency has continued to attract more clients into its fold. According to Babaeko, “in spite of difficulties that have made it hard for any agency to capture every sector of the economy, we were interested right from the beginning to work or partner with stakeholders in key aspects of the economy and I think to a large extent we have succeeded in doing that because, if you look at some of the very key aspects of the economy, we already have presence there where we are serving clients as diligently as we can. In terms of our plan based on the kind of vision we have, we can never fully actualize all of those plans, but we are already working on the next five-year plan, however, most of the key milestones we mapped out for ourselves have been accomplished.”
The understanding of the industry at all times has made the agency unique and ahead of the competition. Also, the people and the culture have positioned the agency as the destination of choice for many clients. When asked about the competitive advantages of the agency over the others in the industry, Babaeko was quick to say, “I think it is the team. It is a very young, brilliant, agile and ready-to-move kind of team and the culture of never saying never!
“We never quit, we do whatever it takes to build a brand that is in our custody. We work extra hours. Anywhere knowledge can be found, we will seek it and use it to help the brands we have in our custody to grow in a very crowded marketplace. I think all of those things have been one of the advantages we have over most people in the market.”
Going by the meteoric, almost sublime rise of X3M Ideas in the Nigerian market and in the Western African market, it will certainly not be a surprise to see X3M Ideas PTY taking the entire So