by MarkLives (@marklives) On 10 March 2019, Carte Blanche broadcast a story on Brand South Africa‘s previous contract with its then digital marketing agency, Avatar.
“With the fortunes of South Africa’s state institutions flagging as the President works to attract investment and clean up house through various commissions of inquiry, Carte Blanche examines internal tensions within Brand SA, the custodian of the country’s nation brand,” runs the show’s blurb. “Created in 2002 to foster a positive brand image, rifts have emerged over the awarding of a digital marketing tender. We speak to suspended CEO Kingsley Makhubela and board chairperson Khanyisile Kweyama to ask whether taxpayers are getting value for money from the agency.”
The investigative journalism TV series on M-Net investigated various aspects of the tender awarded to Avatar in 2014. Watch the episode below for full details:
https://youtu.be/cVbws8B9V84
Avatar responds
MarkLives approached both Brand SA (so far without success) and Avatar for comment. Zibusiso Mkhwanazi, Avatar group CEO, responded with this statement:
Avatar’s public statement on Brand SA dispute
For the past eight months Avatar Agency, a 100% black-owned agency, has received media enquiries stemming from a dispute between the board of Brand SA and its suspended CEO.
The allegations, which have been both malicious and have misrepresented the facts of the case, have subjected us to negative publicity and the inaccurate reporting has sought to besmirch our industry reputation.
DStv’s Carte Blanche programme also made several enquiries and we responded, in writing, to all of them over a number of weeks. On Sunday, March 10, Carte Blanche finally aired their report on the matter. However, they ignored the facts and failed to reference the findings of the independent forensic auditor that exonerated Avatar from any wrongdoing despite it being made available to them.
Carte Blanche alleged Avatar over-charged for a BrandSA website. The fact is, Avatar’s contract with Brand SA did not only involve hosting a website, as was inaccurately alluded to in the programme on March 10. Avatar also pointed this out repeatedly to Carte Blanche in written answers to their questions.
The facts are:
Avatar was appointed between 2014 and 2017 as the Brand SA digital marketing agency.
The work we did included daily article generation, video production, social media content creation and moderation across all their platforms, live event coverage, digital media planning, digital media buying and monthly reporting.
We also worked across the following websites and social platforms where applicable. Later, three were merged into a single platform:
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- southafrica.info
- mediaclubsouthafrica.com
- brandsouthafrica.com
- playyourpart.co.za
- globalsouthafricans.com
- brandacademy.co.za.
An independent forensic investigator examined all of our hosting invoices and costs and confirmed that the scope of the cost of hosting by Hetzner (the hosting service) was just one component of the contract fee. We provided more than basic hosting for the six websites, which included:
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- Web hosting for the aforementioned sites
- Excess web traffic and storage (the spend and success of digital media campaigns that we were running also played a role in the traffic usage of the site)
- Server administration
- Security
- Technical SEO upkeep
- Framework updates and modifications
- Technical maintenance
It was inaccurate to compare the two costs as they are not the same thing. The forensic report also detail that once they appointed Hetzner, they also appointed a 2nd service provider for technical maintenance, but Carte Blanche did not factor those fees in the hosting fee comparison.
A 10% annual increase in fees was negotiated and agreed upon with Brand SA in contract negotiations.
The suspended CEO of Brand SA, Kingsley Makhubela, has been on record that he wants an independent forensic audit on our contract with Brand SA. We commissioned such an independent audit from a reputable audit firm at our own cost and the report, which exonerates Avatar from wrongdoing, is now a public document for anyone to peruse [available for viewing at the Avatar office by appointment — ed].
The key things identified in the report:
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- Our bid document clearly states that our price is not firm and that it was subject to receiving a defined scope of work;
- There was a discrepancy in the scope of work from the bid sent to us by Brand SA to the contract finalised and signed by Brand SA;
- There was an open-ended clause in the scope drawn up by Brand SA for ad hoc work, which was exercised by client numerous times over the contract period.
Our conscience is clear that Avatar has done no wrong. We believe this matter is part of an employer / employee dispute and we are caught in the crossfire.
We did not overcharge Brand SA. We were not responsible for them drafting a contract that contradicted their own bid documents, as per the findings of the forensic report. We agreed on a hosting rate card and hosting scope as part of negotiations, which they approved. We were not responsible for them extending the scope of work and hence increasing the tender price without following their own due process and procedure. We dealt with senior people, who included the CEO, CFO, COO, etc and we had no reason to believe due process was not being followed internally.
Our contract with Brand SA was extended twice. We are in possession of a letter of recommendation from the suspended CEO, which was sent before he was suspended. We repeat that we believe that we are caught up in the middle of an employer and employee dispute at Brand SA.
We have shared the forensic audit with Brand SA and are engaging with them. This is still an ongoing matter. We shared the same report with Carte Blanche, but for reasons known only to them, they did not use, which resulted in an inaccurate reporting of the case.
For now, we leave everything to the forensic report for anyone interested.
Zibusiso Mkhwanazi
Group CEO
Avatar
Further comment
MarkLives will publish any feedback from Brand South Africa should it be forthcoming.
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We do all the above hosting, of six websites as well as SEO, Security, Firewall Maintenance, Server maintenance, website backups, technical assistance, bandwidth usage and it costs our client about 10% of the amount quoted by Carte Blanche. So were shocked to see this report.
In other words; the least said about the CarteBlanch report, the better, perhaps SANEF and related should look into it. This agency concerned did not charge anything that was not agreed upon by Brand SA. All necessary adjustments were endorsed and signed off by Brand SA. Additionally, the contract was extended more than once not forgetting that even the suspended CEO continued to recommend the agency. The Auditor General including an independent forensic auditor could not find any wrong doing on the part of the agency, all evidence (both direct and indirect) explicitly points towards BrandSA. The ill-advised strategy to pass blame to the agency is clearly not sound and should not be given any further airtime.
Very difficult to say what actual costs (plus a mark up) should be for all these sites. It’s quite easy to get to a big figure if you have out of bundle traffic, security (this type of site for sure needs good security), etc. What I can say is that showing an invoice from Hetzner for R2,500 or so is a joke; large, professionally hosted sites don’t cost so little to host….
As an aside https://www.southafrica.info/ is down currently