‘Well f*** me!’ – Agencies gag at Digital Vibes’ fat Covid-19 contract

R3 million for an interview?

“Well, f*** me!” was the response from one communications agency executive upon hearing just how much the Department of Health’s PR firm was paid for their services.

National government’s controversial Covid-19 public relations contract with the well-connected Digital Vibes has media agencies scratching their heads over the cost of their services.

The company won a R150 million contract with the national health department in 2019 and has been linked to health minister Zweli Mkhize, whose former personal assistant Naadhira Mitha controls the entity.

Digital Vibes was awarded the contract through a deviation in procurement processes, to provide communication services in relation to the NHI Bill.

ALSO READ: Pressure mounts on Ramaphosa to act against Mkhize over Digital Vibes scandal

On 25 March 2020, the department extended the scope of work of Digital Vibes to include Covid-19 related communications.

Recently Mkhize announced that an investigation into the deal found the contract to have been irregular, and that an amount of R37 million spent paying the company before any services were even rendered was wasteful and fruitless expenditure.

A series of exposés by News 24 have revealed that the company’s charges included R3 million for securing an interview with SABC News.  These amounts immediately raised red flags to four prominent media agencies The Citizen spoke to.

Agency 1 

” Well, f*** me,” exclaimed Mike Sharman, chief creative office, Retroviral Reacting to the allegation that this company may have charged as much as R3 million for an interview.

What stands out for Sharman the company’s proximity to Mkhize and perceived nepotism. Perhaps Mkhize may not have known the cost of digital outputs, he suggests. But nevertheless, what little is known of the contract does not appear to justify government spending R150 million on what leading agencies charge a fraction for.

“This Digital Vibes thing is so weird because its almost got a mix of tech but then it also has those outputs of traditional PR and comms. So, in most PR agencies they will charge you for a retainer and you will get a mixture of hours across the team and some agencies do blended rates.”

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Depending on the mix of services, clients can expect to pay R2500-R3000 an hour for the services of a senior human resource. A few hundred Rand an hour could pay the services of junior resources. Some communications and PR agencies offer packages staying in client’s pocket on a retainers worth around R30 000 a month, going up to R250 000 to a R1 million per month.

This, however, still can’t explain the feasibility of a R150 million contract, he argues.

“R3 million to set up an interview, that is an absolute joke,” says Sharman. “There are all kinds of ethical standards here that are being transcended.”

Agency 2

Sandy* a senior executive at a leading communications firm that works with major public and private sector clients, was equally perplexed.

At face value, she says the expenditure appears to be exorbitant at best and downright dodgy at worst. Giving an example of a simple social media campaign for a major client on a tight budget, she says this should not exceed the tens of thousands.

“They cannot charge that much,” she exclaimed.

“When we do paid campaigns we charge them one sixteenth of the value of the campaign for advertising placement so, its between 16% and 20%. So if they say we want you to run a social media campaign which is around R20 000, we bill them 16% which is around R3000. The R20 000 we use for paid campaigns, and give them the invoice directly from the social media platform.”

READ MORE: Covid-19 corruption probe ‘involving Mkhize’s friends at an advanced stage’

It is possible to spend this much on a campaign of this magnitude, but it wouldn’t make sense why government would end up spending this much on a media campaign that is of national interest.

“It means that there was no ring-fencing of costs and that the agency was simply given a blank cheque” she adds.

“Even if you do traditional advertising and you did billboards across the country and you did radio adverts, NHI and Covid-19 are issues of public interest. Because they are issues of public interests they can generate PR without paying anyone anything. They can get the minister an interview on SABC without paying anyone anything. They are not supposed to pay for coverage of an issue of public interest.”

Agency 3

Veronica*, another agency executive whose clients have included banks and major public and private sector entities, says the expenditure of R150 million on the campaign was inexplicable for the public sector, though prices have many variants in the private sector.

“I think that its hard for agencies to say this is the standard price because everybody has their own different mark-up and people also have understandings with different people.

“People call it leveraging one’s relationships, but surely this cannot extend to negotiating exorbitant prices providing services to government, who is mandated by law to look for the most reasonable price for privately attained services.

ALSO READ: ‘Probe into Mkhize must be completed before any action can be taken’

“If you think of the public sector, it’s meant to be more transparent and more honest and people still do that. What did we do to get for R150 million?” she asks.

For a client budget to even reach the millions for any media campaign, this would have to have what the industry calls a “360 campaign” which involves coverage on most traditional platforms as well as digital media.

That would still barely reach the tens of millions.

Calls for Mkhize’s head

Earlier, Mkhize told Parliament the Digital Vibes contract was supposed to come to an end on November 30, 2020, but due to logistical arrangements, the contract was being extended on a month-to-month basis.

Allegations of a conflict of interest in the contract on Mkhize’s part are also being investigated by the Special Investigating Unit.

Political parties such as the DA, the Freedom Front Plus (FF+) and the Congress of the People (Cope) criticised the president for being silent on the graft involving Mkhize.

ALSO READ: Digital Vibes paid for maintenance work at Mkhize family trust property

The DA’s national spokesperson Siviwe Gwarube said Ramaphosa had failed to mention Mkhize’s role during his address and did not take decisive action on the matter.

Gwarube demanded that the minister should be removed, adding that the Special Investigative Unit (SIU) probe that Ramaphosa relied on before he acted, was not enough.

“We cannot have the minister being a player and a referee, he needs to be removed,” Gwarube said.

Simnikiweh@citizen.co.za