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.
The average investment in marketing related to turnover in British companies is 2.9% – slightly lower than the global benchmark among the 12 SCOPEN studied countries. The global benchmark is 3.1%.
Marketers invest 37.8% of their marketing and communications budget in digital (a 6.5% increase since the last wave of the study in 2015). Marketers state that they invest their other 38.6% in ATL and 23.6% in BTL marketing services (mainly promos, activations and events).
UK marketers invest less in digital than their Chinese (42.6%) and Brazilian (38.7%) counterparts. Marketers work in the UK with an average of 3.5 creative agencies (1.9 of them digital specialists) on an ongoing basis.
The country where clients work with the greatest number of agencies is China (5.8 agencies).
Especially good news for agencies is that marketers do not identify other partners (apart from tech companies at 25.5%) that contribute in a greater way to their business growth. They attribute 8.2% to Google and 8.1% to Facebook and surprisingly, there are no mentions of Amazon.
Consultancies (such as BCG, Accenture and Deloitte) are scored very low at 3%, 2% and 1% respectively and McKinsey appears the highest at 5%.
Cannes Lions are the most valued award by marketers. This increases their prestige since the last edition and is nearly double the importance given to the next award, the IPA’s Effectiveness Awards.
Nike (‘Just Do It – Colin Kaepernick‘, and ‘Nothing beats a Londoner’) and John Lewis’s (‘The boy and the Piano – Elton John’) are the two companies most admired for their marketing campaigns.
KFC, Audi (‘Clowns’) and Guinness complete the top 5. Nike, Apple and John Lewis are the three most admired companies for their marketing.
Amazon and Unilever complete the Top 5. Mark Lund is the agency professional most admired by marketers, followed by Cilla Snowball, James Murphy and John Hegarty. Sara Bennison and Fernando Machado are the most admired CMOs by their peers.
adam&eveDDB, BBH and Mother are perceived as the most creative agencies by marketers in the UK.
BBH is the agency that clients would include most often in a shortlist if they were to conduct a pitch tomorrow. Mother and adam&eveDDB are second and third.
BBH, AMVBBDO and McCANN are the three agencies closer to the ‘ideal’ type of agencies in marketers’ minds.
VCCP is the agency with the highest levels of client satisfaction. BBH ranks second, and Brooklyn Brothers and Proximity are equal in third position.
Clients are demanding and there is a lot of competition, so it is not easy to appear in the top three in the performance ranking.
CMOs receive calls from 50 different agencies per year asking to meet. Add to this that there will be at least 10 calls from each agency and a marketer is fielding more than 500 approaches a year from agencies.
Follow Michael Bratt on Twitter @MichaelBratt8
