When Michael Jordaan, CEO of FNB, tweeted last week that he had approved a R44-million order of smartphones and tablets – that will come fully loaded with FNB apps – aimed at current clients and potential clients, this got me thinking about three things that simply can’t be ignored.
Firstly, I thought how FNB seems to be ahead of the pack regarding digital/social media and this goes beyond banking. Secondly, I thought how Michael Jordaan’s pulling up of his sleeves as a CEO and pushing through such a big investment must impact on ordinary staff/employees within FNB, in particular the front desk, financial consultants and sales teams. Thirdly, I thought how this campaign will most certainly succeed and how, in the long run, it could ultimately affect the media owner’s revenue and impact on media agencies.
Ideally, I would have liked to focus on the second, looking at how apps could impact on the staff and how this initiative is bound to assist FNB in facing the challenge of operational costs. Could these apps dent hopes of the banking sector meeting its charter objectives within the set guidelines? Could these apps have the potential to lead into job losses? That’s not what this story is about and I would rather leave these questions to the sector to answer, especially as soon all of them will be following FNB’s lead in the medium.
What should be of media industry concern, particularly from media owner and media agency perspectives, is the impact that the increase of new media will have on their business models. FNB is now in the process of strengthening linkages directly with their clients and the potential clients. Once their target market has been fully reached, segmented, and penetrated, will they need us? They could easily pull this off, through their use of technology and their key focus on apps development. In return, FNB will be in a better position to project on any aspect of their business, from the retail right up to their corporate segment.
The danger for both media owners and media agencies is that for the past few years, FNB has had the upper hand in all contract negotiations and this will only get worse going forward. Soon all major clients will be following their lead. This will pose a serious threat to industry and perhaps lead to some adjustments in our business models.
Unfortunately, this is unavoidable and sooner rather than later both media agencies and media owners will have to consider what their role will be in a world where digital is the industry’s new currency.
Media owners are seeing a decrease in audience, circulation, and most importantly, they are losing the upper hand in contract negotiations with clients. The time has now come for diversification of businesses to include the digital aspect as an overall part of their core business. As for media agencies, strategic partnerships and acquisitions of businesses that focus on digital will only assist in mitigating the risk going forward.
But for now, let us enjoy and embrace all the clients that are brave and are leading innovations in the digital space.
Follow Tshepo Moletsane on Twitter @mobisoul
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