Not surprisingly, politics is front of mind for many media agency heads as they turn their thoughts to 2019. It will also be a year dominated by digital and data developments. Agency heads in South Africa deliver the good news on the sector.
Looking back at 2018, Chris Botha (below), group MD of Park Advertising, references Dickens: “It was the best of times, it was the worst of times”.
The year started off with “some really positive momentum – call it Ramaphoria, or whatever you like, the industry felt like we were kick starting again – but the middle to end of the year has been a hard pull again. Very little organic growth, with a consumer that remains massively under pressure”.
Josh Dovey, CEO of Africa, Omnicom Media Group SA, bluntly describes it “as a very difficult year for everyone” with a distressed economy affecting advertising spend and agency bottom lines. OMG was very conscious of costs to maintain profitability, but also continually developed its offering to clients to help them stand out. Initiative Media CEO, Marc Taback, comments that political uncertainty caused clients to take a cautious approach to investment. More buoyant was Celia Collins, MD of Carat Johannesburg, who describes it as a “phenomenal year” in which her agency’s groundwork and pitching in 2017 came to fruition.
Not surprisingly, politics is front of mind for many media agency heads as they turn their thoughts to 2019. While Botha expects “the most hotly contested elections in our country’s history” to be a dirty fight, characterised by mudslinging that will impact on consumer and investor sentiment, Dovey optimistically looks towards “a stable government, after the June elections, that is committed to some degree of economic reform and has the political legitimacy to make it happen.” Taback also proffers the possibility of more positive marketing investment post elections.
Offering a salutatory newcomer’s perspective, Federico De Nardis, CEO of GroupM SSA, grappled with “understanding the logistics and the differences between South Africa and the other markets” he has worked in. He summarises South Africa as “a strange mix of old and new, a conservative and old-fashioned media approach and an innovative future-facing way of understanding and reaching consumers. The lack of growth in the market is probably blocking some investments, in particular within the industry research space that could help move the market to the next level”.
Dovey remarks that the OMG agencies (OMD and PHD) are now being given “a scope of work from clients that would have been unimaginable even three years ago” and points out that their success in diversification and delivery has led to OMG being recognised by RECMA as the biggest holding company in South Africa. He states that “if a media agency’s model is simply planning and buying ATL media, then they should pack up and go home.”
Taback (left) also mentions that clients are looking for a greater degree of partnership from their media agencies. Botha expands on this, saying, “Whether it be digital capabilities, econometric modelling, predictive sciences, production, insights, PR or activations – as communications experts we owe it to our clients to offer a holistic full spectrum service. From a business perspective it helps us make different and, in some cases, better margins. It entrenches our relationship with our clients to a far greater degree and makes us an indispensable business partner.”
Richard Procter, client partner/new business director at the Dentsu Aegis Network, points out that “consumer purchase journeys are becoming easier to plot and quantify thanks to digital media reaching critical mass, especially on mobile”. Media agencies, therefore, no longer operate predominately at the top end of the funnel: he cites budgets being equally divided between prospecting, engaging and driving action.
He comments that in 2018, “there was exponential growth in clients asking us for a data strategy and putting sizeable budgets into achieving this” and continues, “The race is on to fill bespoke audience centres or DMPs (data management platforms) with cookie data via first, second and third party sources” to enable media agencies to “build custom audiences to drive personalised communication with smart creative and ultimately DCO (dynamic creative optimisation). Remarketing just gets a lot more interesting. Another positive is this requires far deeper real-time integration between media and creative to drive client KPIs.”
AI an important theme
According to De Nardis, the application of AI will be an important theme for 2019; he believes its application to daily media tasks, such as digital campaign optimisation “will deliver incredible additional value to clients… dramatically change the way we work and the effectiveness of our work.” GroupM will be introducing this to Africa in the next few months via the Co-pilot application.
He also highlights the importance, in South Africa, of getting “the right content to the right consumer at the right time” revealing that GroupM invests heavily into the tools, tech and people needed to deliver this, and to remain a step ahead of the market in identifying new trends and opportunities to reach the consumer.
He cites the addition of Yonder Media’s “unique mobile expertise combining creative and coding” to the GroupM team.
Collins (below) remarks that Carat’s new business wins have given the agency the scale to structure itself in a future-forward way. The approach of designing bespoke units to meet clients’ precise needs has proved successful; she cites “Red Star” which services the Heineken business, and Carat Possibilities created for ABSA. While specialists are drawn from across the companies within Dentsu Aegis Network, she points out that it is the co-location that transforms the thinking and strategising processes resulting in agnostic and integrated business solutions. The unique DAN approach of a single P&L also facilitates its success.
Under Sir Martin Sorrell’s leadership, WPP had advocated “horizontality” as a means of better servicing client’s needs – drawing expertise from across the specialist agencies to create bespoke teams, but the approach floundered due to established loyalties and the lack of a single P&L.
Locally, at Carat, 2019 will also see a number of work streams come to fruition, introducing efficiencies through automation. Collins remarks that it is fortunate that DAN has been prepared to invest in these projects, and that South Africa has been able to draw on the experiences of countries such as Spain and the UK in developing their systems. She believes that this will be transformative, opening up huge scope for people’s growth and for different and more informed client conversations.
Certainly, there is a sense that our local industry is moving meaningfully forward, and that 2019 will be a year dominated by digital and data developments.
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For a sense of how the media industry will develop globally, it is tempting to look to what Sir Martin Sorrell is doing. He succeeded in transforming the marcoms industry two decades ago. Now he is not only no longer weighed down “with the anchor of the legacy company”, but also of the belief that “the best form of revenge would be building a significant and successful new-era, new-format, new-approach agency”.
With S4 Capital, his intention is “to provide global, multi-national, regional, local clients and influencer-driven millennial brands with new age/new era digital marketing services concentrated in three key areas initially – the development of a global digital content platform; first-party data fuelling both digital media planning and creative ideas; and, finally, digital media buying.
Clients of all kinds want these services delivered faster, better and cheaper, by more agile and responsive organisations, either in-house, co-located with them or alone”. This seems a succinct blueprint for success.
Having spent some decades working in the media agencies, Britta Reid now relishes the opportunity to take an independent perspective on the South African media world, especially during this time of radical research transformation.