Bucket hats and bottomless pockets: Inside the RAF’s R1bn marketing meltdown

Golf “bucket hats” at R11,500 a pop. Sports bags at R37,900. Golf shirts at R8,180. Podcasts at R110,313 per episode. Thousands of empty branded water bottles at R85 each. The parliamentary inquiry into the Road Accident Fund (RAF) has revealed over-invoicing by external advertising agencies so extreme, it has MPs worried kickbacks have been taking place. 

It’s been previously reported that two media houses, media buyer MediaMix360 and creative agency Dzinge Productions, have spent a mammoth R650m of a total budget of around R1bn over the past two years on media and advertising on behalf of the RAF.

At the time this was revealed, watchdog organisations were already sceptical about the legitimacy of the spending, which the RAF at the time justified on the basis that it needed to fulfil its “critical mandate” by leveraging all media platforms – print, television, radio, online and social – to communicate essential information to the public in every official language.

“This comprehensive outreach ensures that vital information about the organisation and road safety reaches all citizens and communities, including rural, peri-urban, township and urban audiences,” the RAF said. 

However, now that the actual invoices have been presented to the parliamentary standing committee on public accounts (Scopa) it’s becoming apparent that the spending was absolutely lavish and extremely ineffective. 

Last week, the committee heard evidence from the agency’s communications head, McIntosh Polela, and suspended marketing manager Hlami Mathye. In that hearing, it became apparent that the two five-year contracts awarded to MediaMix360 and Dzinge Productions for R500m each were due to run until November 2027 and December 2028, respectively.

Oddly, even though the contracts still have some time to run, a combined R650m has already been spent on questionable marketing campaigns. Polela said the cost overrun was due to unbudgeted campaigns brought to the unit. The MediaMix360 contract only had R11m remaining at the end of March, with more than two years left to go. For the Dzinge Productions contract, R245m had been spent by the end of March, bringing the total cost spent to about R650m out of R1bn, with more than two years remaining.

With access to the invoices, it’s now clear how much wastage and over-invoicing there has been in these contracts. 

Very suspiciously, Mathye said the RAF used to utilise the Government Communication and Information System (GCIS) to procure media services and also tap on its panel of creative agencies for advertising – until October 2020, when a memorandum of understanding for the GCIS was not renewed by the then newly installed and now suspended CEO Collins Letsoalo.

Letsoalo claimed GCIS was “not cost effective”, Mathye said, so it was decided that the RAF would go to the market in a competitive bidding process in 2020. 

Mathye said a cost-benefit analysis showed the GCIS was cheap, and the unit resubmitted this finding for Letsoalo’s consideration, but the RAF decided to undertake a procurement process to find a media buyer and creative agent anyway.

“He rejected the report we presented to him. That is exactly what happened,” she said.

Mathye was subsequently suspended, notionally on the basis that a R26m SABC television advertisement did not carry the correct payoff line, and was consequently “misaligned”. 

Scopa chair Songezo Zibi commented: “Most concerning about these seemingly inflated invoices is that the RAF has confirmed that they perform zero checks on their agency procurement. This means in effect the RAF management has placed R1bn in the hands of two suppliers to use as they wish. This while over 430k claims languish unattended, and the claimants suffer and possibly die waiting.”

The hearing continues.

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