1. What is your background?R
align=justifyDegrees in psychology, philosophy, sociology. Post-grad in psychology and philosophy. Former CPRP (Prisa). Currently completing B.Comm (Economics).
align=justify2. How do you attract people into the media agency industry?
align=justifyWith difficulty – demand far outstrips supply with respect to qualified personnel at the moment. We like people who don’t necessarily have an academic background in media, but also a broader background in marketing, branding, financial management, etc. We attract people to the agency by paying them well, providing a supportive environment and allowing as much autonomy as we can.R
align=justify3. Do you think the media should be separate from advertising or would that be a mistake?
align=justifyI have no problem if some agencies specialise in media, while others specialise in other functions like brand strategy, creative development, research, public relations, etc. However, it’s necessary to understand that we’re all part of one, single process: Delivering audiences to advertisers, and getting the advertiser’s message to the audience.
align=justifyFrom the consumer’s point of view, the distinctions between media, creative, PR, etc. are entirely artificial – consumers have a single experience of the brand, product or service. As agencies, that means we have to work together to ensure that the entirety of the consumer’s experience is as we want it to be.
align=justifyHowever, that does not mean that all agencies should therefore necessarily be fully integrated: Product design, pricing, distribution, after-sales services (and a number of other things) are also part of the consumer’s single experience, but that doesn’t imply that a single agency or company has to be responsible for all of these facets. R
align=justifyThe problem occurs, I think, when agencies focus only on their contribution to the process, without giving a damn about the process as a whole. Agencies therefore have to be willing and able to integrate their services with those of other account partners, and clients have to demand and manage it.
align=justifyIn many (but not all) cases, the lack of integration happens as much on the client’s side as between the agencies. For example, clients often have one department handling product research, another tasked with advertising, a third that runs promotions, and a fourth that’s responsible for public and media relations. If these departments don’t talk to one another internally (i.e. within the client organisation) you can be certain that the agencies won’t be providing an integrated service either.
align=justify4. The South African economy is not fabulous right now. How has this affected media buying?
align=justifyWe have to focus on the correct unit of analysis: The economy doesn’t spend on advertising – advertisers do. The fact that interest rates may be rising (and inflation may be reducing buying-power) means that some companies are going to be hit by a decline in demand. Others may, given the same circumstances, see an increase in demand depending on the products and services they offer and who they offer these to. The demand-side impact will therefore depend on the company.
align=justifyIn addition, companies respond to tighter conditions in different ways, depending not only on the nature of their business, but also their strategic outlook: Some companies actually respond to declining demand by increasing their advertising. In other words, a company may decide that it is now more important to induce consumption of their product type, or to try and decrease competitors’ market share.
align=justifyOur experience so far has been that most of our clients’ expenditure has increased, and that these increases have generally been in excess of inflation and media inflation. That doesn’t mean that the industry as a whole won’t see declining expenditure (this has happened in the past, and is likely to happen again now) – simply that our particular client base has, so far, not decreased expenditure.
align=justifyA related issue is return on investment. In tough economic conditions, some clients become even more focused on ensuring that each cent of their expenditure is optimally allocated while other clients focus on ROI irrespective of the economic climate. One possible result – and there’s no way to test this, given that the data won’t become available to the public – is that media owners are going to see their margins shrinking. R
align=justifyDespite the fact that rate card expenditure may show little or no decline, media owners may have to increase the discounts and added value they allow advertisers in order to remain competitive. It would be interesting to take a look at the Annual Reports of listed media companies to see whether their profit margins decline over the next few months. The problem with that, of course, is that margins don’t only decline due to increased discounts (and most don’t report discounts in detail) – shrinking margins could also be because of higher input costs, relative increases in salaries, etc.R
align=justify5. Do you think online has made an impact in South Africa?
align=justifyOnline has made a difference, but it is a difference of degree. The introduction of television gave advertisers another platform on which to reach audiences, and created new opportunities with respect to messaging. There are things you can do on television that you can’t do in print or on radio.
align=justifyOnline has had a similar impact: We can be more targeted, more interactive, etc. The fact that online penetration remains comparatively low in South Africa (when you compare us to, for example, the Netherlands or the UK) simply means that online is appropriate to certain audience segments and not to others.