by MarkLives (@marklives) What are the expectations for the marketing and advertising industry in 2018? We emailed a panel of key industry executives for their take on the macro environment, budgets, changes in messaging, movement in the industry and any consumer and communication trends they’ll be looking out for. Next up is Wayne Naidoo of DUKE.
Wayne Naidoo (@WNaidoo), founder and CEO of DUKE and a veteran adman, believes that a fierce imagination, good data and a bold heart can liberate businesses and create new, profitable opportunities for clients. He has over 25 years’ experience in the marketing and advertising industry, having begun his career in marketing as the marketing manager of the Cape Town 2004 Olympic Bid Committee. He has also been Association for Communication and Advertising (ACA) chair, AAA School of Advertising board member and Young Presidents’ Organisation (YPO) chair.
The way we do business today is no longer the same as we did a decade ago. Why then, do advertising agencies still provide the same service offering that we did 10 years ago? The closure of some of South Africa’s ad industry giants last year is a pretty clear indication that, if ad agencies plan to survive the current economic downturn, we’re going to have to relook traditional agency models and the value we offer our clients.
Two main areas of focus
The two main areas of focus for ad agencies that wish to remain relevant and economically viable in 2018 are, first and foremost, their financial models and thereafter, the outdated and inefficient offerings that they bring to market. From a cost-factor point of view, agencies need to take stock of each and every position within the business and decide whether that position is a necessity and if it adds value. Do we really need eight people to service an account or can we simply work a lot smarter? Do we need such lengthy reporting lines? Can we cut out a tier or two? How do we remain passionate and excited about what we do when we spend our lives managing staff issues and admin chores?
The current agency model has proven to be outdated and inefficient. Cumbersome, staff-laden agencies with massive overheads have to charge massive retainers to cover their costs. And with companies currently feeling the pinch, there are no longer enough of those big retainers to go around. We need to get lean and work smarter.
Cost of awards
Also adding to a battered agency bottom line is the cost of entering creative awards, particularly international awards. Do these awards really bring in new business? Just how much value is to be gained from a shelf-load of creative awards? Yes, every agency loves to line up their Loeries and Lions but it just doesn’t make business sense to be chasing after awards when your budget is blown.
Beyond the obvious financial and commercial factor, agencies also really need to relook the way we work — are we really adding value to our client’s business? How many of us can say that we have truly taken our client’s business forward and achieved things for them in the past 12 months? Businesses are currently under huge financial pressure, budgets are shrinking and there is a growing demand for returns. Clients need a partner who listens, who understands their business and that will ultimately make life easier for them.
Brands are also questioning the way that agencies are spending their money and they are relooking at the way they sell and market their products. P&G chief brand officer, Marc Pritchard, recently stated in Financial Times, “Agencies need to do more to help their clients — the industry needs to figure out how we drive growth.”
If we want to remain competitive, we need to come up with innovative, unique solutions that may not actually involve any traditional communication elements at all. There is a reason that consulting firms are stepping into our arena — they are offering clients more than just advertising. Are we prepared to look for solutions that go beyond our regular set of integrated campaign elements? Maybe your client needs networking opportunities or better staff incentives — are you prepared to explore non-traditional solutions that might not essentially make you as much money but will benefit your client’s business far more?
In order to fully understand our clients’ business and to come up with targeted solutions, we need to fully submerse ourselves in that business and the industry in which it operates. For far too long, agencies have looked inward; — we tell ourselves that the client doesn’t understand. But how much do we really understand about their product and brand? Spend a week on the ground with your client; see how they make money, what the day-to-day operation involves. Chat to their suppliers and even competitors in the industry. Ask about the numbers, deliverables and targets and, most importantly, what keeps your client awake at night. Don’t just rely on the research that your strat department hands you; get out and do your own.
Not all doom and gloom
But 2018 certainly isn’t all doom and gloom. By definition, ad agencies are supposed to be innovative and creative at finding solutions — the current business landscape simply poses us with a new challenge to which to apply our creative thought. We also desperately need to promote our industry — the tougher things get, the more likely we are to lose our best talent to other industries, where people are seen to be making more money in more dynamic and exciting fields. The ad industry comprises so many brilliant and talented minds; I have no doubt that, if we just sit down together and put our minds to the many challenges, we can figure out how to make South African advertising great again.
- Nimay Parekh: #BigQ2018: Brands just need to be smart to reap rewards
- Masego Motsogi: #BigQ2018: Let’s get back to creating magic again
- Prakash Patel: #BigQ2018: Velocity of change going to be unprecedented & unpredictable
- Xola Nouse: #BigQ2018: Strained budgets, profit margins to impact in various ways
- Tara Turkington & Tiffany Turkington-Palmer: #BigQ2018: World of marketing & advertising a sea of complexity
- Wynand Smit: #BigQ2018: Security at forefront of consumers’ minds
- Mpange Chapeshamano & Mthunzi Plaatjie: #BigQ2018: The year the ‘new’ independents keep on disrupting
- Peter Khoury: #BigQ2018: Blend talent diversity, operational transparency to grow
- Lebogang Rasethaba: #BigQ2018: Brand films are TVCs that aren’t scared to be overly sexy
- Odette van der Haar: #BigQ2018: Creative effectiveness is channel-agnostic
- Mike Abel: #BigQ2018: 2018 is not the ad industry’s Kodak moment
- Johanna McDowell: #BigQ2018: Marketers to take digital in-house at unprecedented rate
- Ashish Williams: #BigQ2018: Brands adapting comms to be part of consumer journey
- Melina McDonald & Lorraine Smit: #BigQ2018: Production sees smaller teams, integrated offering
- Joshin Raghubar: #BigQ2018: Marketing evolves from campaign activity to a service
Launched in 2016, “The Big Q” is a regular column on MarkLives in which we ask key advertising and marketing industry execs for their thoughts on relevant issues facing the industry. If you’d like to be part of our pool of panellists, please contact editor Herman Manson via email (2mark at marklives dot com) or Twitter (@marklives). Suggestions for questions are also welcomed.