Since founding Csonke Holdings a decade ago, Zibusiso Mkhwanazi has helped build South Africa’s biggest black-empowered digital agency in KrazyBoyz. Year after year he sees the same white faces as he goes up against his peers for business. He believes it is high time that changed - despite the fact there’s no easy solutions to transforming the burgeoning digital industry. By MANDY DE WAAL.
Ten years ago, when Zibusiso Mkhwanazi was 18 years old, he and friend Neo Mothlabane were fuelled by a dream to create a huge business in the digital industry. They only had R2,000 in start-up capital, but had a great combination of skills and a mighty will to succeed. Mkhwananzi knew a lot about computers and loved technology, while Mothlabane was skilled in accounting.
Without a car and with few resources they’d catch taxis to meetings. When it rained, meetings were postponed so they didn’t arrive at potential clients drenched. The hard work paid off when their company, Csonke Holdings, led a buy-in and merger with KrazyBoyz to form South Africa’s first sizeable black-empowered agency.
Driven to ensure other previously disadvantaged youths could emulate his success, Mkhwanazi established the Mkhwanazi Academy for Christian Entrepreneurship (Mace) in Vosloorus. A non-profit organisation that runs as a Christian business forum, Mace teaches entrepreneurial skills with a religious ethos to “create a new breed of ethical entrepreneurs in this country”. Late last year Mace acquired a 20% shareholding in brand-design agency, The Red Quarter, making Mkhwananzi chairman of not one but two agencies. In the meantime, KrazyBoyz is booming following a 100% win in pitches during 2010, when the agency picked up accounts like Converse, The National Geographic Channel, FOX Television and Business Connexion.
Mkhwananzi should be happy, but he’s pensive and troubled when we meet in Rosebank for an interview about transformation in the local digital industry. “Over the years I have been very quiet on the issue of transformation in the industry and I’ve been focussed on growing my agency,” says Mkhwananzi. “In December I came to the realisation that my silence was not helping make the situation any better because I still get calls from tons of people looking for opportunities in my space, but unfortunately I don’t have the resources to accommodate them all as yet. It requires the agency to grow and I can only take in so many students.”
Aside from growing entrepreneurial skills through Mace and employing people in his agencies, Mkhwananzi brings in talented young people into his agency who shadow the teams that work at KrazyBoyz. “I identify young people with talent, even matriculants because you don’t need a degree to do what we do. You just need someone who is going to sit you down and take you through it so you get a better understanding of the industry itself. I take in young people and I train them up on SEO, social media and other digital marketing skills. I believe that if agencies had the will to do that, it would make a big change. It would be a huge step forward. But if you had to say to most digital agencies, ‘Show me your interns’ it would still mostly be white people because the will is just not there.”
Last year R526 million was spent on digital advertising on the South African networks that are tracked by Nielsen. The research giant gets figures from local publishers, but this is only for online advertising and excludes sponsorships and promotions. It’s difficult to get a handle on how big the local industry is because it includes web design, search engine optimisation (SEO) strategy, mobile, viral marketing, Web PR, social media and more. The industry readily transmutes so the financial flow is difficult to track. Nielsen, for example, will only start tracking mobile advertising values this year. Then there’s the fact that companies like Google and Facebook bill offshore so financial flow isn’t contained in South Africa.
The couple of hundred million offered by Nielsen is the tip of an iceberg for a local industry that is burgeoning and which has ignored transformation to essentially remain “a white boys club”. (One agency to be singled out, however, is Quirk. Not because of equity or empowered agency ownership, but because Quirk has created digital marketing learning materials and curricula that could well be stepping stones to introducing new generations into the industry.)
As the boss of a large digital agency, Zibusiso Mkhwanazi is an industry anomaly. There are independents and entrepreneurs making money on the margins, but for the most part the digital industry is owned and operated by white men who haven’t displayed real intent to part with the keys to the kingdom. Unlike the transport, mining, financial, traditional marketing, retail or other industries where previously disadvantaged people could enter through deal making, entrepreneurship or with learned or inherent skills, Telkom’s legacy mess and the digital industry’s intransigence mean there’s a huge digital skills deficit in South Africa.
“For the most part, when you talk to young people from townships and rural areas they will tell you about the Internet, what they’ve heard one can do on the Internet, but they aren’t necessarily engaging with it,” says Mkhwanazi, who questions whether there can be a willingness to embrace digital technologies when people don’t have basic access. “The mobile environment is what is helping bridge that divide. The revolution started with MXit and people then started to migrate to Facebook.” However, the marginalised pay a penalty for using mobile because, as pre-paid users, they have to pay much higher fees for services.
“Not having access locks people out of the world. If one looks at how often one interacts with one’s mobile phone or the Internet, that’s what township youths that don’t have access are being locked out of. We live in an information age and if you don’t have access to that information you are at a disadvantage in almost everything you do.”
Mkhwanazi says black geeks exist in townships, but the problem is they are locked out of opportunity. “I stay in Spruitview, which is a very upmarket place, but it is only black people that stay in Spruitview. But within my area I still can’t connect to ADSL and it’s upmarket. I recently applied for CellC’s new Woosh thingy, the HSPA+, but they didn’t have coverage in my area.”
What this has led to is a very small black digital talent pool and some digital disciplines that have no black representation. “I have never met any black person who can do SEO. I have never met a black digital strategist. As a black agency we attract a lot of black talent from the little bit that exists, but I have yet to meet someone with those specific skills,” says Mkhwanazi. “The problem is awareness, then there’s the matter of education and then there’s the matter of willingness. I still believe digital agencies are unwilling to address transformation and this is because they don’t have to. Even with the scorecards in place there is still no pressure on them to transform. In all the pitch sessions I have gone to over the years, besides myself, I can recall only seeing two other black people and they were probably trainees to the company that was pitching. Honestly speaking, transformation does still not exist in my industry.”
Multinationals and “Proudly South African” companies should insist on using empowered suppliers and marketing partners, but what if there aren’t any or there aren’t enough compatible ones? “The danger is that almost all the good agencies are not empowered. The range you can pick from is limited. As a client you want an agency that fits your culture and best fits your brand, that you feel understands the brand. When you get to your shortlist the probability is you are only going to have white agencies. While that environment still exists there is no pressure on agencies to transform because the big agencies aren’t empowered, so empowerment isn’t a factor in reality.
“Let’s analyse the deals that have been done in the digital space where international agencies have bought into local agencies or with the big mergers. Has empowerment been a factor or has empowerment been considered? No. It is about keeping the industry locked. It is still a small industry and people communicate among themselves.” Mkhwanazi says this is perpetuated by industry associations populated with white people and which largely ignore the issue of transformation.
Beyond the moral obligation of transforming a cartel-like white industry, Mkwananzi believes diversity will enhance the quality of work, the growth of innovation and will better reach and address the consumer needs of the broader South African community and the masses so many marketers want to reach.
What will it take for transformation to happen given there’s little if any motivation for the white boys’ club to change? Mkhwananzi believes any future revolution for the industry will come from entrepreneurs. “We need to train up more black people in digital skills to change this and to offer entrepreneurial skills on top of this to generate more competition.” DM
Read more: The White Boys Club on ITWeb, Self-made man to guide local bright sparks on TimesLIVE, Entrepreneurship academy gets 20% of brand design agency in BizCommunity. Read more about Mace here. Download Quirk’s emarketing textbook.
"A long habit of not thinking a thing wrong gives it a superficial appearance of being right and raises at first a formidable outcry in defence of custom. But the tumult soon subsides. Time makes more converts than reason." ~ Thomas Paine