It is a big question, for small start-ups: Can broadcast media disrupt traditional buying structures to accommodate start-up businesses?
DCMN South Africa kickstarted the conversation at a roundtable meeting attended by DStv, eMedia, Jacaranda FM, Heart FM, Kaya FM, Travelstart, UCOOK, Silvertree Internet Holdings, Carzar, Lulalend and Wesgro.
The intent was to “encourage collaboration between various parties to enable startups to include radio and TV in their media plans”.
“What we realised again in this discussion is that one, media houses have a lot of data on how each channel performs in terms of reach and frequency. And two, the start-ups that were present have all tested various media and channels on a small scale and know what works for them and what doesn’t. Three, using attribution software, we have data on which channels, which dayparts and what type of creatives deliver the best performance for startups (measuring actual results e.g. visits to their website),” said Irina Herf, general manager of growth marketing partner DCMN South Africa.
“So, if we can all work together and combine our data to be able to give start-ups a media plan that is highly likely to give them the growth they need, it is a very powerful offering that is a win-win for everyone,” she added.
The room agreed using digital and social advertising as a starting point was ideal as it is measurable and agile, and therefore easy to test on a small scale and make changes quickly. The overall perception was that, especially with TV, the measurability and agility (and of course budget too) are prohibitive factors for the startups.
Manuel Koser, founder and managing director of Silvertree Internet Holdings, said Google and Facebook were the benchmarks for measurability and offline media would never be able to compete. But, when growth stagnated, it was crucial to start looking at different media to get new clients. And this was where TV and radio plays an important role.
“Media owners need a different operating model for start-ups. These companies are still trying to figure out what they are doing and things change all the time. It is important to tackle these guys with a different approach,” said Koser.
This was wholeheartedly supported by Travelstart. Although they have successfully grown the business using a combination of media tactics, including TV and radio, acquisition remains their main objective. Odette Faling, commercial director of Travelstart, was clear offline budgets were cut first. In her opinion, performance-based payment models were crucial to ensure that brands like them could continue using offline media and justifying the spend.
“Performance-based payment models will remove the risk for the client,” she said. “We provide our content and the media owners can decide on which channels they want to run it (unsold inventory or prime inventory), but we only pay for conversions received. We also understand that they run a business, but with the data we have gathered so far by using attribution software, we can give the stations a very good idea of the bookings we will get on specific channels and what income they can expect.”
This perspective was met with some resistance from media owners since they would need to rely on data from the advertisers themselves and from attribution software to determine the conversions and being that co-dependent is a challenge for a big corporation. This highlighted how big a role transparency would play in whether performance-based pricing models could be successfully implemented.
Availability of prime inventory was also discussed. As Shamiel Salie from DStv said, “Inventory is a finite thing in our world.” But the general feeling was that startups sometimes got better results from smaller channels and non-prime dayparts and that prime inventory wasn’t necessarily what they are after. Koser also urged media owners to allocate a small percentage of their inventory to test the concept, thereby minimising the risk for themselves as well.
The concept of co-creation was something that the startups felt strongly about. They want to form real partnership with the media owners where they could co-create content, understanding of their own audiences to create advertising that delivers performance.
Stacey Vermaak from Lulalend urged radio stations to share the knowledge that they gain by testing different creatives, different messages, etc. with their clients to help them grow.
There was a positive reaction to this in the room from all parties. Kevin Fine from Jacaranda FM reiterated: “Our job is not to take your money, our job is to accelerate your business,” he aid, while Greg Maloka, managing director of Kaya M, emphasised the need for these businesses to fully comprehend the South Africa landscape to realise real growth.
The concept of agility and the need for startups to be able to change things quickly came up as a big pain point during discussions. However, it seemed there were ways to address this. As Fatulka Gaibi from eMedia explained, “There are options for ads that we can explore that doesn’t sit in the commercial break. We can also help startups with production and can make changes quickly.”
From the radio stations’ side, live reads are also a very good option for startups since it lends credibility and the message can be changed daily if needed. Which also addressed the matter of high production costs. Various parties reiterated that even with TV, an extended campaign that ran over weeks was not necessary. One or two spots could make a difference if you tracked it properly and knew which channel at what time delivered the required results for your business.
So what are the next steps? Setting up an innovation lab to run a few tests seem like the most logical next step. If media owners, start-ups (and even SMEs and other e-commerce businesses) and marketing partners can all work together to find the solutions that will benefit everyone, we can all help to grow the market leaders of tomorrow.
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