Masterclass Notes: What agencies may expect from marketers in 2017
by Johanna McDowell (@jomcdowell) Six leading marketers spent three hours discussing their outlook for 2017 and what agencies may expect with about 50 agency folk from about 25 different agencies (across all disciplines) at the most-recent masterclass in Johannesburg end of January 2017.
Questions covered the following topics: the outlook for 2017 — pressure on budgets; how agencies may help marketers in these tough times — flexibility; will the tough economic landscape create more in-house agencies — a cost saving for marketers; how is marketing working with procurement, and what are the roles when dealing with agencies; media transparency and production costs — will there be more interrogation; and thoughts on digital vs traditional advertising and media — cost-saving or false saving.
Those marketers on our panel were: Cleola Kunene, JSE marketing manager; Grant van Niekerk, Mondelez marketing executive: chocolate; Belinda Godfrey, marketing executive, formerly at The Spitz Group and Edgars Group; Sipho Mdluli, DGB marketing director: spirits; Gerhard Joubert, PPS group marketing head; and Cindy-Anne Lewis, Ericsson marketing director.
The outlook for 2017
- More consolidation of budgets
- Working on a project-to-project basis, rather than on retainer, is becoming more common
- More than 50% of finance companies are cutting costs this year — bound to impact on marketing
- Marketers and agencies are working harder but with less
- But more optimistic this year than last year — 2017 looking slightly better
- Digital spend is increasing — may be very targeted, results are easier to measure
- Traditional agency model is too “layered” — adds costs that are not necessary
- Marketers see more and more promotions, and even price wars, coming — not necessarily good for the market, although great for consumers
How agencies may help marketers in these tough times?
- Greater flexibility in terms of costing models
- Marketers will be relying on their agencies to really partner with them
- With marketing departments shrinking year-on-year — some are 50% smaller than three years ago — the reliance on agencies will be much greater
- Agencies must push ideas that will promote products and sales; this is the no. 1 consideration at this time for marketers, leads and sales
- Real measurements are essential — companies need to know where the money is being spent, and how and with what results; marketers are accountable to everyone in their organisations for the spend and performance
- Clients can no longer accept “good enough”; campaigns need to be better and better
- Agencies have to deliver and understand that the marketer has to deal with his/her exco colleagues
- If agencies can ensure that campaigns are leveraged fully, via PR particularly, — this will add value at minimal cost
- Agencies need to be “wilder”, push boundaries, take more risks
- Collaboration among agencies is essential, and appears to be the most difficult thing to achieve. I recommend that clients take the lead in collaboration and sit in the centre of a collaborative team in order to ensure that agencies work together well — and fairly
- Agencies need to be calmer and more mindful, slowing down in a way that will enable them to work better — less frantically
- With companies cutting costs, company CSI initiatives are being “starved” of budget. Is this an area where agencies may help and add value?
- Agencies to ensure that the detail of their work is being checked before it goes to client; this is a basic principle but often sadly lacking
- Agencies to ask more questions — ask the clients to spend more time with them — this produces better results
- Relationships happen in person, not over email
Will there be more in-house agencies as a result of the tough economic landscape/cost-savings?
- No, say the marketers, we want to be able to hold external resources accountable — much easier than holding internal colleagues accountable
- We want to work with best of breed, to have a choice of service providers
- One marketer commented that DTP had been brought in-house, which saved 70% on DTP costs from their agency — so cost savings are possible and desirable in certain areas
Marketing working with procurement — roles and responsibilities?
- Procurement is focusing on BEE among the agencies, so agencies are urged to make sure that their BEE is right — it is a business imperative
- Procurement also focusing energy on costs and cost-saving, of course
- Budgets are not increasing year on year; marketers are often having to start from a zero base each year — the days of the annual increase are over. Procurement clearly very involved in making sure that there are efficiencies
Media transparency and production-cost transparency
Surprisingly to me, there was no real discussion or comment around this issue.
Digital vs traditional advertising and media — is there a shift?
- One marketer told us that 25% of their marketing spend has been allocated to digital in 2017 — a big shift from previous years
- One of the global marketers told us that most of their budget goes to digital — very little on ATL traditional
- Marketers want agencies to be able to bridge the offline and online communication, and should be looking at omnichannel — marketers need this advice
- In digital, there are new acronyms every day. Most marketers are in constant contact with their digital agencies as a result of the speed and requirements
Most important to know
Finally, marketers were each asked to state the one thing that they believe it is most important for their agencies to know:
- See yourselves as equals
- Employ the best/right people
- Ask for time with marketers and leaders of the brands
- Give credibility to what you do as agencies so that it adds to the value of the marketers
- Don’t waste money on expensive catering — TV shoots in particular
- Make sure you understand the context of the client industry and how the client company makes its money.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), and she is one of the few experts driving this mediation and advisory service in SA and globally. Currently she is running the IAS Marketers Masterclass, a programme consisting of masterclasses held in Cape Town and in Johannesburg. Twice a year she attends AdForum Worldwide Summits.