There were some positives for media to take away from 2020, and this year holds plenty more for those agencies able to perform at their peak.
The year 2020 does not bring back fond memories for the world. The pandemic brought about a hard lockdown in South Africa as in many other countries, which in turn created a mass of uncertainty that reshaped media consumption patterns, shut down many key performing sectors such as alcohol and sport, disrupted schooling, created consumer and business flux, and most importantly destabilised our economy – to name but a few of the impacts.
As I reflect from a media and business point of view, one of the biggest challenges that we faced at the beginning of the pandemic was around redesigning strategies to deliver ‘cost containment’ measures. This was understandable, considering the levels of uncertainty that we were dealing with at the time, and based on my experience during uncertain times, marketing and media budgets are the first to be reconsidered. This resulted in the industry forecasting to end the year on a negative 10-20% media investment versus that planned for most brands.
Silver linings
There was definitely some light after the initial onset. As the pandemic started to settle in and while campaigns were being paused, redirected, or cut completely, media agencies who had solid operational structures to respond to this global catastrophe provided a stable environment for their clients. This stability and specialist support guided many brands in how to focus on growth and put the consumer journey at the pulse of the marketing ecosystem. The conversion from uncertainty to stability led to the South African media industry ending on a much better note than predicted early in 2020.
GroupM’s This Year, Next Year: Global 2020 End-of-Year Forecast Report indicates that overall media investment declined by 5.8% worldwide. This figure is very similar to how many brands ended the year in South Africa, which was stronger than forecasted at the start of the pandemic. When we compare these figures to South Africa’s GDP, StatsSA reports that the economy showed steady progress in Q3 2020 with an annualised growth rate of 13.5%, and an annual year-end figure of -5.8%.
These figures directly correlate to our approximate media investment decline and suggest that South African media investment gained steady traction, ending the year strong as we were in line with GDP.
Digital media was a key driver in maintaining high levels of media investment. As consumer patterns and behaviours shifted, we saw the rise of video on demand, content extensions from traditional media platforms to online, a huge spike in social media consumption as person-to-person socialising became more and more restricted, and the boom of e-commerce – Nielsen reported that 30% of all South Africans were shopping more online.
Business operating models will continue to deliver growth
Innovation has been a buzzword in the media industry over the years and many agencies have got it right. I have seen how agency operations with diversified product offerings including advanced technologies, integrated workforces and specialist skills have gained fair market share for clients and the media sector in 2020. I foresee this trend continuing in 2021, with many agencies that have not yet remodelled or reshaped their businesses quickly getting on board. Agencies of the future cannot be complacent or reactive to market forces.
The evolution of the consumer, pandemic or not, dictates that we need to be agile enough to change and predict change, and keep our media partnerships flexible to accommodate change. I believe that the only way to provide this stability to brands/clients/staff, and to deliver incremental YoY growth is through flexible and diversified operational structures.
From data service providers to consumer enablers
For the longest time we’ve spoken about the high costs of data in South Africa being one of the biggest challenges we face, especially for digital media transformation. In 2020 digital media went from ‘transforming slowly’ to ‘developing instantly’ and showing results. Data is one of the commodities enabling consumers in South Africa today – more so in this new normal world in which we are living.
I foresee partners in this space working hard to ensure that all South Africans have access to data and services, cost effectively, before the end of 2021. This will further enable us to do two jobs in the media ecosystem: first, to connect and engage with consumers when most effective without having to worry about access to data being a threat, and second, to showcase the power and role of each medium at any given moment in a converged media ecosystem.
Performance, performance and more performance
The year ahead looks bright and exciting in South Africa. TV will continue to drive reach, content will be key, digital will enhance other media platforms and grow YoY by at least 30-40% in 2021 (my assumption based on 2020 trends), radio will keep pushing digital innovation, e-commerce will have a larger base, and so forth.
We keep looking at which media platforms will work best or grow exponentially in 2021 in terms of reach and other audience ratings, but I do not believe these numbers will be good enough to establish growth. I believe agencies need to focus on building formulas through powerful data and analytics to showcase brand or business performance in media – irrespective of whether ROI modelling is in place or not.
Performance is key in making the 2021 media ecosystem in South Africa successful, and agencies have the opportunity to design what good looks like.
Claudelle Naidoo is the managing director of MediaCom South Africa. Her experience in the marketing, media and research industries across Africa spans more than 20 years. She believes her passion for research, data, and analytics is the driving force behind her career growth and development, coupled with a hunger and eagerness to learn from experts, teach others and grow alongside people.
