Independent agencies are in a strong position in South Africa, many of them doing very well. This was just one of the key findings in SCOPEN’s last marketers, clients study in SA, which took place in 2017.
The research house is gearing up for another local study, which will kick off in May, with the results anticipated for November.
“What we will be analysing now in South Africa is everything related with data and technology, which are new trends globally. We will be including further questions on in-house solutions, because that is a global trend, as well as more around independent agencies,” reveals SCOPEN president and CEO, César Vacchiano, exclusively to The Media Online.
Integration and no threat from consultancies
Another global trend is integration, with more and more clients wanting to work with integrated agencies. However, it is difficult to find talent to create an integrated agency, so different companies are coming together and working under one roof to bring together talents with different skills to offer 360 degree solutions.
Interesting to note is that despite all the talk of consultancies coming in and eating the lunch of agencies, client respondents in SCOPEN studies globally are not seeing how they are contributing to business growth.
A valuable lesson for local creative agencies, according to Johanna McDowell (left), partner in South Africa for SCOPEN, is that they are all trying to do the same thing, which makes them all look and sound exactly the same.
“It’s about being brave enough to distinguish yourself from your competition, have a distinct offering, something unique which clients can’t get anywhere else, and that will attract clients,” she says.
More creative agencies are starting to diversify their offerings, bringing on board media solutions, PR, and digital services. This is an attempt to counter clients taking in-house traditional agency functions, including media buying (particularly digital) and design, according to McDowell.
“They still need agencies to do the strategic thinking, creative work and the big picture media strategies, but the rest, clients are doing in-house, and we’re seeing it all over the world,” she elaborates.
Insights from the UK
After five months of intensive work, SCOPEN recently revealed insights from its latest UK marketer/client study. According to Vacchiano, the UK is the leader in agency trends, so anything that is happening there, South Africa should take note of as they are likely to head to our shores. Some of the talking points are fascinating.
“The UK used to have long relationships between agencies and clients (6.5 years in 2015), but this has dropped to 4.8 years now. This is related with big corporations changing their agencies after many years, as well as brands committing to not working with an agency for too long,” Vacchiano reveals. The global benchmark for this is 4.7 years.
Commenting on this drop in relationship length, between agencies and clients, McDowell says, “Agencies fell into the trap of doing resource-based costing, so they were doing timesheet-based work. Clients don’t understand that and they don’t really appreciate it at all, because they’re saying, ‘agencies are billing us for all these hours, but we may not have any output’. There’s a big move in the UK and here in South Africa to get agencies to work on scope of work as opposed to resource-based costing, as it’s more accurate, profitable for agencies and the task is to get the scope of work right up front, which is the difficult part.”
UK marketers and CMOs believe that agencies contribute only 16%, on average, to their business growth. This is slightly lower from 2015, and much lower than over markets surveyed.
The good news is that in the UK, 80% of clients are satisfied with their agencies, slightly higher than the response in 2015. This is also higher than in South Africa, which came in at just 68.6% in 2017. This correlates with the UK response that only 8.3% of clients are considering changing their agencies, down massively from 17% in 2015. In South Africa this correlation is also seen, with one in five respondents in 2017 saying they are considering changing their agencies, reflecting the lower level of agency satisfaction.
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