Masterclass Notes: Trends from agencyScope SA 2017 fieldwork
by Johanna McDowell (@jomcdowell) Here are some early observations from the Scopen agencyScope 2017 fieldwork in South Africa.
Scopen, founders and owners of agencyScope — a study of the advertising and marketing industry in 12 countries and now in South Africa — are in the field 1 June–22 September 2017, with five senior researchers interviewing chief marketing officers (CMOs) across SA. These interviews have been at least 45-minutes long on a face-to-face basis and this is the second wave of this research. Our inaugural study, with a smaller respondent base, took place early in 2016 and so our findings are coming out about 18 months later than last year and a few trends have emerged.
[Full disclosure: Scopen Global and Mazole Holdings (the company that owns IAS 100%) have formed a company in South Africa called Scopen Africa. Scopen Global holds the majority of the shares; Mazole is a minority shareholder. Johanna McDowell is a director of Scopen Africa, as is Cesar Vacchiano, Global CEO of Scopen.]
At the time of writing, with several weeks left of our fieldwork among more than 200 leading CMOs of the top 200 companies in SA, some interesting observations have been made in relation to some of the findings from 2016.
1. Incentive payments
SA reported a relatively low incidence in 2016, in comparison to the other countries studied, where marketers pay their agencies an incentive based on performance and results. It seems that this has declined further in 2017 and is largely attributed to the state of the economy.
2. Percentage of expenditure on digital marketing
In the 2016 study, we recorded that marketers were spending their marketing budget as follows:
- 52%: above the line
- 18%: digital
- 30%: below the line
Early estimates for 2017 see the digital portion increasing to as much as 25%. We don’t think that this will be a surprise to agencies as they are all reporting a growth in that sector, but we aren’t sure if overall budgets have increased or decreased. With digital media being far less expensive than traditional media, it may well be that clients are saving money in their budgets by directing more expenditure to digital marketing. So the proportion of digital spend may well be increasing but the actual monetary amounts may not be. It will be interesting to analyse this against actual spend splits when the latest media-spend figures are released later this year.
At 18%, SA was behind by at least 10% of all the other countries studied by Scopen in 2016. Twenty-five percent this year brings SA more in line with China, Spain and Colombia, according to the 2016 study, as digital was accounting for approximately 25% of marketing spend in those countries. No doubt that percentage has also increased.
3. Social media
CMOs are commenting that social media has become a key marketing tool for their brands and services. This is no real surprise, considering the increase in digital expenditure and the increased desire of marketers to be at the forefront of marketing trends, in general. Types of social media used are still to be identified and will be detailed in the full reports once Scopen has crunched the data from the fieldwork. We also believe that social media is being used extensively to amplify traditional advertising campaigns more and more effectively. Plus the use of analytics is proving, time and again, that social media campaigns can work very efficiently.
There was little to no mention of social media in the 2016 study.
4. PR growing in importance
Public relations is growing in importance among CMOs. We wonder if this might be attributed to the following:
- Cost-saving: PR is very cost-effective
- Impact: PR again can amplify a marketing campaign and create immediate impact and potential sales lift off — at relatively low cost
- PR practitioners are more and more versatile, and have tapped into the digital space very quickly and effectively, creating earned media coverage much faster than in previous times
- PR results can be tracked more accurately — and quickly
In the 2016 study, CMOs commented that their “ideal integrated advertising agency” would include PR services along with media and digital; this was an indication then of the growing importance of PR. It seems that the impact of PR is now being felt and tracked.
5. Desire to participate
Somewhat gratifyingly for SCOPEN, CMOs were very keen to participate in the 2017 study and, although the CMOs were extremely busy, they were not only keen to share their views and opinions but actually called us to participate and referred others on a continuous basis. We were delighted with this level of interest.
Equally, we have many agencies now participating in the study. Part of the data-collection process includes short online surveys among agency professionals and, at the time of writing, more than 250 professionals from more than 80 agencies — advertising, digital and media — had participated in the surveys which essentially ask them to rate agencies, other than their own, on a variety of criteria.
We are really pleased with the progress this year and the deepening understanding that we are gaining as a result of this study. The first detailed reports and workshop presentations to subscribing agencies will be available from early November, and the summary report (a summary of the trends and findings in general) will be made available by the end of 2017. The summary report is free to marketers who participated in the study. All reports will include comparisons to previous year, as well as comparisons globally.
Johanna McDowell (@jomcdowell) is managing director of the Independent Agency Search and Selection Company (IAS), which is partnered with the AAR Group in the UK. Johanna 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.