by Johanna McDowell (@jomcdowell) 2016 has been an interesting year so far: the ups and downs of our economy, particularly following Nenegate; the amount of pitching among the agencies; and the impact of the economy upon marketers. Here are several trends which have emerged during the first half of the year, as well as my predictions for the second half.
Trends from the first six months
- A focus upon costs and procurement needs: many of the pitches have been around budget and consolidation. Those seem to be the underlying reasons for Edcon and MTN, the latter still not awarded and unlikely to be resolved until September, according to my information. The focus upon costs, efficiencies and procurement involvement will continue.
- Marketer uncertainty: greater confidence from agencies at a time like this enables marketers to have a more-confident approach within their own organisations — and, in uncertain times, confidence is essential. Large corporates looking for real growth will have had a far-greater dependence upon the marketing teams than ever before. There is a limit to how many costs can be cut. Greater collaboration between marketer and agency is the key.
- Recognition that the global economy is also very uncertain: in the past, I’ve heard marketers and agencies wistfully thinking that life would be easier/better/more certain in other parts of the world. However, I see a growing uncertainty here, too, as it is clear that the global economy is going to remain choppy for some years to come.
- Africa: South African agencies are already active in Africa and some have benefited from the additional revenues generated in far-flung places! But there is always the bad with the good and, as some large listed corporates have discovered, there is no magic bullet to unlock success in Africa. Slowly and carefully, as opposed to opportunistically, seem to be the order of the day.
- Opportunity: many more agencies this year have been contacting pitch consultants for help in the marketing and positioning of their agencies.
- Many new startups have been launched, too, and that is where a lot of the new action is.
- Client satisfaction with agencies: generally, this is good, although there is always the search for new solutions, and this restlessness will often result in marketers looking at new agencies for new solutions to old problems, even though they may well be satisfied with their current agencies.
Predictions for the next six months
- More mergers and acquisitions: I see big changes happening as a result of agency wins and losses. I also anticipate that the large network groups, in particular, may well start merging some of their SA assets that are not performing as well as everyone hoped a few years ago. Other new agency group ‘brands’ will emerge, too
- More startups: this will happen— especially among the black-owned and black-woman-owned agencies.
- More pitches: the second half of the year will be busier than the first half in terms of pitching — and this is driven by the need to review options, rather than the dissatisfaction of marketers with their agencies. Marketers have to deliver to their respective C-Suite counterparts and they need their agency teams to be very much part of the solutions they offer to their businesses in order to grow them. Hence the hunt for solutions-driven agencies will continue.
- Digital: I believe that there is still a lot of confusion among marketers regarding the role of digital and suspect that this is also a sign of work in progress. Because so many client companies still work in departments or ‘silos’, it is difficult to derive the full benefit of digital marketing — as digital can go so much further than traditional advertising. There is no ‘one-size-fits-all’ solution that may be provided by any agency, and I see the need for a great deal more demystifying or education around digital which will help clients obtain maximum benefit, especially when it comes to integrating marketing IT solutions into the IT DNA of the client.
A coming highlight for me will be the AdForum Worldwide Summit this year in the US, which should be an eye-opener as attendees will be meeting agencies in New York City plus Los Angeles for the first time. This should be really interesting and I’m looking forward to bringing back the news to SA once again.
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.
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