by Sabrina Forbes. There are three macrotrends facing the market globally and locally, believes Abey Mokgwatsane, Vodacom managing executive of brand and communications. They relate to the shrinking middle-income household, the continued digitisation of business (including the telco sector) and a new political reality around identity and the avoidance of stereotypes. Mokgwatsane joined Vodacom at the end of September 2017 from Ogilvy South Africa, where he had served as CEO for seven years.
Company snapshot
In 1993, Vodacom was awarded a license to operate a GSM cellular network in South Africa. Initial growth projections of 250 000 subscribers within the first 10 years were trumped when it hit 5m after just eight. As of 31 January 2018, the count was at 73.6m subscribers.
In 2009, it listed on the JSE and, in 2011, rebranded to align more with the look and feel of Vodafone, its 65% shareholder. 2012 saw Vodacom as the first to launch LTE/4G in SA and, by 2014, the brand covered 99.8% of the SA population. Vodacom remains the largest provider in this country but also covers operations in Tanzania, the DRC, Mozambique, Lesotho, and Kenya.
Macrotrends
Trend 1: Consumer pinch
Mokgwatsane highlights the shrinking middle-income consumer as the disparity between the rich and poor continues to grow, squeezing out a viable middle-income household. This missing middle creates a scenario where middle-class families are neither poor enough for support from government nor rich enough to access real economic mobility. It leaves a gap for populist parties and their leaders — whether here or in the US — to gain influence.
The middle-income sector is running out of steam and causing brands to push advertising based on value. More for less, two-for-one, buy-one-get-one-free, three-for-two. While Mokgwatsane doesn’t know what macroeconomic policy is going to address this change, he believes the current solutions for all brands is offering their services based on a value model. Brands need to create value for their customers by cutting costs while increasing efficiency.
Fifteen years ago, you’d find the likes of Steve Jobs on the cover of a Forbes or Fortune magazine. The creative genius and founder behind a brand was heralded as a hero. Nowadays, the C-suite is more often than not made up of CAs and economists trying to cut costs, at all costs. “There are no hard-hitter chief celebrity CEOs anymore. Companies are cutting down and trying to survive. It’s very difficult to think of expansive companies anymore,” says Mokgwatsane.
The brand honeymoon is over. Gone are the days of charging premium. “We feel that, at Vodacom, we have huge pressure to cut costs and a huge part of our brand narrative is how we’re bringing value to our customers. Customers know that our network and service [are] premium but that doesn’t mean we can inflate prices,” he says.
Examples of ways the brand has been adding value is in the reduced out-of-bundle rates, its Red Hot Deals communicating its best-value offering, and a huge drive around consumer education. “We overestimate how efficiently and effectively people are using technology,” he says.
Mokgwatsane also makes mention of how tricky it can be for a brand to grow while appreciating those customers who supported it first, and continue to support it: “Companies that have always grown have never had to think about customer appreciation. You don’t think of this when growing year-on-year. We have a lot of work to do in rationalising the customer decision to be with us and a lot of that has to do with value.”
Trend 2: Putting tech to good use
According to Mokgwatsane, technology is the second macrotrend facing the industry. We’ve all seen conference presentations on big data, machine learning, neural network algorithms, artificial intelligence (AI), video on demand (VOD), etc. From a telco perspective, he considers Vodacom to be the bridge that connects people to technology, and that companies like Vodacom have been morphing from being telecomms-only to becoming fully fledged digital companies.
M-Pesa, started in Kenya by Vodacom unit Safaricom, is a good example of this. It’s a fast, safe, and easy way to send money and is “fundamentally helping people run their businesses, especially micro-businesses,” says Mokgwatsane.
Another example is Virtual Teacher, an education platform Vodacom launched late 2017 with the Department of Education. Virtual Teacher is an e-school programme that gives students access to their full syllabus through their mobile phones. Teachers can also deliver lessons in real-time to multiple remote locations. “We take helping people use technology to advance their lives very seriously; it’s something that’s evolving within our organisation,” he says, noting that most of us only use 10% of Microsoft Excel’s real power. This feeds back to his comment about brands overestimating how effectively consumers use their technology.
Trend 3: Politically correct culture
“Your skin colour, age, and race [don’t determine] an individual. We’re in a world where we’re all ultra-sensitive of perpetuating a stereotype,” says Mokgwatsane. More people use Vodacom as a service than any other in SA and. because of this reach and scale, the brand’s marketing therefore means something different to everyone and, without a set target audience, getting the message right across can be difficult. A 2018 New York Times article about pop music supports his theory that “huge clusters of audiences are being built online and these are often different to what is being perpetuated by big media.”
“Power is being democratised” he says and adds that it’s the whole purpose of democracy anyway. Fitting humans into stereotypes, based on the way they look or how old they are, is an outdated way for brands to communicate. While there’s still space for certain types of targeting for those brands not trying to please everybody and which can go straight to the core of their ideal marketing audience, the “currency of media is shifting from scale to depth of audience”, according to Mokgwatsane. Brands will realise that what people want from them is a determinant of how they should be communicated with, not who they are as people. Everyone wants value; everyone wants brand integrity.
Brand story vs product suites
For Mokgwatsane, Vodacom missed the mark in 2018 when it came to its continuous and fluid brand story. “We hadn’t really thought though how the brand manifests consistently through all of Vodacom’s product suites. Too often, we’ve been too responsive to the requirements of the product set vs focusing on the brand story,” he says. To him, the work therefore missed a key brand narrative and, going into 2019 and beyond, the team plus its partnership agencies (WE, Ogilvy, Cerebra, OpenField, SuperUnion, and WaveMaker) will focus on going back to basics with the CI of Vodacom. Consumers can expect a simpler narrative while the brand focuses on doing fewer things better, always focusing on the classical retail thinking of ‘value platform’ communications.
In 2018, Vodacom brought its entire media-buying centre in-house, using its own tech stack. Building on this digital capability is an important milestone for the brand, according to Mokgwatsane, and we can expect to see many more from this disruptive but freshly consistent brand.
“#AgencyFocus/#BrandFocus” is an ongoing weekly series updating the market on ad agency performance and brand, including innovation, initiatives, the work, awards, people and business performance.
Sabrina Forbes (IG) is an experienced writer covering the food, health, lifestyle, beverage, marketing and media industries. She runs her own full-stack web/app development and digital-first content creation company. For more, go to moonwrench.com. She is a contributing writer to MarkLives.com.
— One subscription form, three newsletters: sign up now for the MarkLives newsletter, including Ramify headlines; The Interlocker, our new monthly comms-focused mailer; and Brands & Branding, launching soon!