In our marketing and communications world there are many who talk up the importance of cultivating long-term relationships. But how ‘long’ should long-term be?
Breaking industry news recently was that after a 60-year run, Toyota South Africa ended its relationship with FCB and will be moving their business, in a global agency alignment, to Publicis Groupe Africa, in March 2023.
Sixty years! Many of us weren’t alive back in 1961 when FCB (originally Lindsay Smithers) was appointed to launch the first Toyota model to be sold in South Africa, the Toyopet 1 ½ tonner. Realising the need to overcome the stigma associated with Japanese-made products following World War II, Dr Albert Wessels – who had secured the South African franchise – had the Toyota brand promoted as reliable and durable.
In time, the average motorist would automatically associate, ‘Everything keeps going right’ with Toyota.
FCB launched the Hilux in 1970 and the Corolla in 1975, successfully building what would become South Africa’s best-selling bakkie and the best-selling passenger cars. They also launched many models from the Fortuner to the Ses’fikile taxis. Toyota has been the best-selling automotive brand in South Africa for 42 of its 61 years in the market, and by 2021 it had grown its market share to 25.4%.
So FCB can be proud of the role they have played in building the brand through the iconic advertising campaigns they have created over time.
Change is inevitable and imperative
But six decades! In this time there have been so many different marques and models. And so many different people at Toyota and at LS/FCB. Plus, there have been so many different people in the way of customers or Toyota owners and drivers. Back in the day the target market would have been almost solely white, but now it is predominantly black. Our country has changed dramatically since the end of apartheid and the birth of the new democracy.
The whole world has changed dramatically, and is continuously changing, accelerated by the likes of digital advancements, the Covid-19 pandemic, and the Russian war.
What seems like a lifetime ago, back in 2013, FCB felt wounded when they lost the Vodacom account, which they had held for almost two decades. Now after more than six decades with Toyota they are no doubt again feeling very wounded, given that they have helped take the Toyota brand to even newer heights.
But should they feel wounded? Or should others within the industry not feel more wounded, given that one agency superpower had the benefit of ‘owning’ South Africa’s largest telecoms brand for two decades, and South Africa’s largest motor manufacturer for six decades?
Change is inevitable, but it is also imperative, because change is healthy. While we agree that it is vital to cultivate long-term relationships, that it takes time to understand a business, to build client trust and to deliver, we don’t believe that any agency should be allowed to ‘own’ a client (and certainly not one the size of either Toyota or Vodacom) for two decades, let alone six.
Anti-competitive?
As such, the Competition Commission of South Africa cannot and should not pass this as good business practice. In fact, we ought to request the commission to officially look into this matter as I suspect there are elements of serious anti-competitive behaviour.
The thought leaders across different industry verticals recognise this, with the likes of the local auditing firms implementing a mandatory rotation with a maximum tenure of 10 consecutive financial years. Similarly, local private schools also have a mandatory rotation of headmasters/ headmistresses/ leadership after 10 years of tenure.
From a marketing and communications perspective, experience has taught us that three-year contracts are way too short, that it takes almost a year to fully immerse an agency into a large brand, and that at five to seven years the agency-client relationship is typically at its strongest. So, we would advocate that for long-term partnerships to be cultivated, seven-year contracts would make the most sense.
They should come with the provision for early termination due to poor performance, and with the prerogative to extend for a further seven years, but no more than this. It is our belief that no one agency should ever be allowed to keep a client for 20 or more years. While we know it is difficult to lose a good client, the international superpower agencies need to know that it is even harder for those who are not given the opportunity. These international superpowers need to know that change is always beckoning.
Talking superpowers and change, Toyota have simply moved their account from one international agency group to another, not recognising that the status quo has changed, that the people who ride in the Ses’fikiles, the Fortuners, the Hiluxs and the Corollas are black South Africans.
Brand owners need to recognise that this is a new era. An era where we as BANA say the status quo must change. That things can no longer remain the same. That we intend to accelerate the transformation of our industry through the facilitation of increased black-owned agency participation.
Toyota and the likes need to know that we as BANA are taking up the fight to demand change and our fair share at the table.
Groovin Nchabeleng is a founding member and the chairperson of the Black Agencies Network Association (BANA). BANA is a non-profit organisation comprising 100% black-owned agencies across South Africa, with a mandate to champion and accelerate transformation in the advertising, marketing and communications industry by increasing black-owned agency participation. Total advertising spend in South Africa is ±R58-bn and black agencies account for less than 2% of that spend. BANA exists to rewrite that narrative.
Website: www.bana.org.za
Twitter: @groovin_groovin
