There’s no disputing the quality of advertising in South Africa; our showing at Cannes proved that we have the cajones to take on multinationals and win.
But the 2019 Agency Scope study reveals real room for growth in the realm of marketing/agency relationships, says Cesar Vacchiano, President and CEO of SCOPEN International.
Scopen Africa’s recently completed the 2019 Agency Scope Study, a deep dive into Marketing/Agency relationships in South Africa, indicates a distinct shift in client perceptions of and requirements from agencies – and a call to change in how agencies interpret and market their offerings, notes Cesar Vacchiano, President and CEO of SCOPEN International, who is in the country for the month to present their latest findings.
“We see that a lot has changed over the past few years; the industry is changing so much and rapidly, but a major change is that clients are giving more importance to the understanding of agencies, of business, consumers, and the media,” he says.
Given South Africa’s current economic climate, greater significance is given to the demonstration of ROI, adds Vacchiano. “Of course, they (procurement directors) need to show their organisations that they are investing positively, and more agencies are working on demonstrating to clients how they are contributing to business growth and adding value, which is important.”
Hopefully, this may also go some way in shifting the dismal perception clients have on the value agencies provide: “In South Africa, clients think agencies contribute 17% to business growth; globally, clients think agencies contribute 27% to their growth,” explains Vacchiano.
‘Clients used to see innovation as creativity going a step further. Now more clients are starting to understand innovation as the power to transform digitally, and the power of using ideas to change their business. But there’s still a lot of work agencies can do for their clients in that space.’
A positive indicator though, especially in our economy, is that companies are investing more in marketing and comms than they did two years ago, notes Vacchiano: “For every 100 Rand they sell, they invest 4.3 Rands in trying to enforce the position of the brand on consumer sensibilities, and the data shows that companies also perceive the growing opportunity here, which is why they’re investing more in this space.”
Clients are also increasingly starting to realise the value of account services, notes Vacchiano, pointing to a pull back from procurement directors whose desire for lower fees and efficiency led them to changing agencies – only to realise this effect this had on the level of professionalism and talent they were getting.
Honing in on talents – and integration
“They are now starting to realise that you need to pay for talent; for people that understand the business – proactive people that share new ideas, new ways of communication – and the need to move to new territories, new platforms. The world is moving quickly, media is moving quickly, and clients are realising how these techs and changes can transform businesses and industries,” he says.
“Clients used to see innovation as creativity going a step further. Now more clients are starting to understand innovation as the power to transform digitally, and the power of using ideas to change their business. But there’s still a lot of work agencies can do for their clients in that space.”
‘In SA, clients think agencies contribute 17% to business growth; globally, clients think agencies contribute 27% to their growth.’
Client requirements are also shifting indelibly: two years ago, their focus was on media planning and on agencies with media buying power, notes Vacchiano. “Now, they’re moving to new territories – they’re concerned by media fragmentation and how difficult it is to reach target audiences. And more and more, studies show that clients want to work with integrated agencies, or specialist agencies that collaborate in an integrated way, and are asking specialist agencies to collaborate with each other – here, our findings show that there is room to grow and improve, as South African agencies are far behind their global counterparts in the kind of services offered and the types of talent available,” he adds.
The personal touch
Traditionally, agencies focused their talent acquisitionon media planning and buying, which is proving limiting to their strategic planning framework, says Vacchiano: “Agencies haven’t reinforced the talent and skills of people working within them while globally, we see anthropologies coming into play.” These anthropologies relate to a diversity of talent that goes beyond the physicalities of race and gender, but also take background, experience, age and more into account, to offer more strategic services, “especially related to creativity, ideas, innovation, thinking relating with client, added value and contribution,” he explains.
Then there’s the desire for more personalised interaction from the top down. Two years ago, creativity – or a lack thereof – was the main reason clients cited for firing agencies – nowadays, the reason is bad account service, reveals Vacchiano. “Clients complain that after their initial meet with agency leaders, they never see them again. Clients want senior people, because they know about the media industry, business and economy – and how clients can change and transform brands and business – and they want those conversations from senior leaders.”
The call for consultancy
“The problem is that agencies are called agencies – they used to be that years ago, but now they are more related to being consultants, or companies that help transform client’s business through creativity. If they had another name, they would have a stronger position with clients, and be perceived differently by them,” he believes.
“New creative services are arising with digital platforms on one hand, and consultants on the other – Accenture is one such example – and they are also moving into the communications territory, with more attractive names that appeal more to clients.”
More from Vacchiano on SA agencies
“Local companies doing great work and are respected for their marketing, which is a big challenge as it’s difficult to compete with multinationals like Apple, Nike and Coke – but we see Nando’s, Allan Grey, FNB, Absa and Chicken Licken doing amazing work and competing against global giants. Those local companies are using SA talent to build prestigious brands, admired by marketing people that recognise talent in marketing,” says Vacchiano, who pinpointed three key findings from the 2019 Scope Agency focus that local agencies can take to heart.
1 What I perceive and what we received from data is that media agencies are quite accommodated – they live in comfortable world where they just try to keep servicing clients traditionally, and we starting to see some are changing things, trying to go a step further, offer more to clients, offer more in strategic planning, which is a big move – hiring more to make use of data – and that is a great help for clients, who don’t want data in reports (a time constraint) and don’t have knowledge and time to integrate that data, so they need the help of talented people within agencies.
2 Creative thinking and use of media – some agencies are also moving into this space, with the implementation of data-driven strategies and digital infrastructure.
3 Digital is the biggest weakness in South Africa, and though more agencies are enforcing capabilities in digital, and using influencers and bloggers, though there are huge opportunities in this space. The MediaShop had strong position at start or our research, but is now declining because other agencies (such as Dentsu Aegis, Carat and Group M) are reinforcing their position in marketplace, with different, more diverse offerings.
Scopen Africa, launched three years ago in partnership with the Independent Agency Search & Selection Company (IAS), conducts an in-depth study every second year, speaking directly to both Marketers and Agencies at senior levels, to better understand the dynamics between two, the changing needs of Marketers and from that the changes that agencies need to make to ensure they deliver what is required for successful campaigns, brands and Marketing/Agency relationships.
Lucinda Jordaan is an independent writer, researcher and editor with extensive experience in all media, covering fields from academia and finance to education and lifestyle. Her articles have appeared in several award-winning publications, locally and internationally, and she has contributed to books and online sites, including The Media Online.
