Quick case: Allan Gray – growing its market share from 3.9% to 16% in eight years

Quick case: Allan Gray
Agency: King James

Allan Gray, a successful but niched Cape based asset management firm, decided to extend the business into the retail sector with the launch a unit trust company, in a market dominated by a handful of big brand asset managers (such as Old Mutual and Sanlam) and specialist investment organisations (like Coronation, Investec etc.). By 2002 it had managed to attract only 3.9% of the total retail assets then under management and had seen annual growth well below that of the rest of the industry. The company realised it needed a new strategy and appointed King James to capture the popular imagination and to introduce it to a broader market.

King James jettisoned the ‘wallpaper conventions’ of the category (peace of mind, security and future wealth etc.) in favour of Allan Gary’s ‘tenacious commitment to a long-term investment philosophy that often bucked investment trends.’ While advertising in the category also tended to evolve around money and wealth King James decided to credibly focus on people, their empathy and emotion, and to speak to both the minds and the hearts of investors.

While press consisted of strong headline-driven executions simply defining the Allan Gray investment philosophy, the TV campaign focussed on human insights and observations – such as lack of commitment, being ruled by emotion, the fact that things seldom last, the need for patience, not following trends, the value of time – all used to demonstrate Allan Gray’s consistent long-term investment philosophy and consistent success.

Between 2003 and 2007 Allan Gray grew from 8th position in the top ten asset management companies to being the leading asset manager in South Africa, overtaking category giants such as Sanlam and Old Mutual. By 2011, retail assets under management had increased from R4.8bn to R151bn, and Allan Gray’s market share had grown from 3.9% to 16% – with the gap between it and its nearest competitor (Investec) widening to 5.1%. Overall awareness of the Allan Gray brand had grown from being negligible in 2003 to a dominant 82%.

Campaign samples:

Video and frame grab from the Allan Gray TV ad “Time Flies”

 

Video and frame grab from the Allan Gray “Legend” TV ad

Video and frame grab from the Allan Gray “Beautiful” TV ad

Recent competitor advertising:

Old Mutual

Coronation

by Herman Manson (@marklives)

Reprinted from the February 2012 edition of AdVantage magazine.

King James – the road less travelled

by Herman Manson (@marklives) Fourteen years after its launch King James has emerged as South Africa’s most acclaimed independent ad agency. Growing organically, the agency has finally reached a tipping point to boost confidence, influence and revenues, even as it steers the challenges of offering a fully integrated, digitally adept service.

James Barty scribbled the budget for the start-up agency he was planning with Alistair King on a piece of yellow paper. Yellow Ogilvy paper to be precise. At the time Barty and King were the two young guns on the board of Ogilvy & Mather, Rightford SearleTripp & Makin (O&MRS-T&M), in the days when agency names sounded like they could belong to law firms, a chamber of egos, and equally ridiculous. It was the end of 1997. The budget showed the duo would need cash flow of R57 850 a month to get the agency off the ground.

“We’ve only found our stride in the past four years,” says King. “It’s taken us 14 years to gather the clients we wanted and needed to create the level of high profile work we do now.” King has always been critical of agencies that enter work on what is often their smallest or pro-bono accounts into awards. At King James it is often their most high profile work done for their biggest clients – think Allan Gray and Kulula.com – that walks away with the trillion dollars.

Now, finally, the accolades are landing with big thumps on his and Barty’s desks. The agency been named 2011 Ad Agency of the year, Cape Agency Of The Year and won Magazine Campaign of the Year from AdReview. James Barty was awarded the AdFocus Agency Leader of The Year award 2011 while The Annual awarded it Agencies’ Agency of The Year 2011. Thump thump thump.

And in an informal survey amongst Cape based agency bosses and creative directors in 2011, King James was named the city’s the most admired agency by its peers taking more than half of all the nominations cast. Thump.

King James has taken the agency road less travelled in many ways. It has maintained its independence (it has no global affiliation) and expanded the business sideways by creating specialist divisions in partnership with
entrepreneurs. Each division is part owned by the entrepreneurs that helped launch it. They have never made an annual loss.

They (ok King) indulge themselves in publishing magazines and books and having interesting businesses on the side like King’s Playdough Records, who
has recorded artists such as Arno Carstens, Flat Stanley, Bed on Brick, Jack Hammer, Kobus and Paul E.Flynn.

King James Group consists of a numerous communication agencies that make up the integrated company which includes King James RSVP (the design and promotions arm of the business), Atmosphere (PR), Hammer (activations), Dare Media (media strategy), Proof (proofing studio) and Society (previously +One for social media) as well as pop culture media group, One Small Seed.

Mnemonic, the digital outfit launched with Bruce Wright, has just been ramped up with the addition of Matt Ross and Michael Udell, both ex-DDB. Mnemonic is being rebranded and named Punk.

Entrepreneurs themselves, Barty and King admire that spirit in others, and know shareholdings in the group agencies encourages some of the best talent in the industry to migrate their way, and then to stay. Smartly they don’t have to dilute their shareholding in King James Group to achieve any of this.

The Group finally feels complete, says King, who admits he has always felt somewhat inadequate, that pieces of the integrated puzzle remained missing, but that the Punk deal finally put an end to that.

King has always been an ambitious guy – he wanted to be a creative director by the time he hit 30 and wanted to start his own agency by the time he was 35. He would be five years ahead of his already ambitious career path on both counts.

King completed a Bachelor of Arts degree at Wits, did a short training stint at Barker McCormac and took his first job at JWT Johannesburg as a junior copywriter. By 25 he was a creative director at JWT Cape and in 1992 he joined O&MRS-T&M Cape Town as a copywriter. By 30 he was a creative director and a member of the board.

Barty graduated from UCT with a Social Sciences degree and had completed a Post-Graduate course in Human Resource Management. He had joined O&MRS-T&M Cape Town as a Junior Account Executive.

Luckily for him (and King – you’ll find out why soon) Gilbeys Distillers and Vintners headhunted him as brand manager for some of their brands before being promoted to head up the firms New Product Development. He re-joined O&MRS-T&M Cape Town in 1993 as a group account director and two years later was appointed to its board.

King had been unhappy at Rightfords for a while. Decision making was a frustrating process. He spent more time doing mental gymnastics than creating communications. King wanted out and was ready to resign. He also realised he would soon be tied with golden handcuffs (bonds, policies, car payments) as he settled into married life – he had to take a chance and make the break while he still could.

To start an agency, of course, every creative needs a sound business mind with a steady hand to help steer the business, and King found that in Barty, who he approached with the idea of a break-away agency. Barty was interested, feeling his growth potential had been capped at Rightfords, but wanted to know that the business would be sustainable. They needed a client.

They found one, informally, after a discussion with former colleagues Mike Joubert and Gary May, now in charge of Gilbeys (aha!), whose brands included Cape Velvet Cream and Famous Grouse. Before the announcement of the split, Rightfords, or the new client, King was getting married and going to Mauritius on honeymoon.

Which was just when the board of Ogilvy & Mather, Rightford Searle-Tripp & Makin heard word on the street that a new break-away agency was about to launch involving one or more of its directors. An extraordinary board meeting was called, minus King who was still in Mauritius, to find out who was behind the new outfit. Barty kept mum. No one else was going anywhere. That left King.

Barty now had to move quickly, calling up King and explaining to him that they were in breach of their fiduciary responsibilities, and that they had to resign right away. King faxed through his resignation, a copy of which is reprinted in the book that celebrated the agencies 10 year anniversary, though parts of it is blacked out with an (ineffective) black marker.

The blocked out passage of the resignation, addressed to then Rightfords CEO Derek Carstens reads; “As you are no doubt aware, I have been experiencing feelings of frustration and dissatisfaction for the better part of the year. Over the past few months these feelings have grown to the point that I now absolutely, cannot continue working in the frame of mind that I am in. To express it in the way that I feel it, I have simply fallen out of love with O&MRS-T&M. We no longer seem to have anything in common.” The
next day Barty handed the fax to Carstens along with his own resignation.

They had four weeks to set up the infrastructure to they needed to service Gilbeys. They took over Rocket, a small agency whose founder was leaving for New Zealand, and which tallie included one Mac, two staffers, three clients and four desks, while King’s new farther in law, Geoff Grylls, signed surety for the power connection and additional furniture. Which again highlights the significant role in-laws seem to have played in launching South Africa’s top independent ad agencies (the guys at FoxP2 can tell you all about it). King James opened its doors on 5 January, 1998. Above a chip shop at 12 Roeland Square, Cape Town.

That start-up remains one of a handful of South Africa’s top agencies to have maintained its independence from international agency networks.

King says he and Barty closely observed the paths travelled by other agency start-ups and have grown wary of selling the business. They watched as Rightford Searle-Tripp & Makin sold to Ogilvy & Mather, while Bull Calvert Pace sold a significant stake of itself to the LoweGroup upfront. There was Bester Burke sold to D’Arcy, Harrison Human going to Ogilvy, Joe Public and Bosman Johnson both selling to FCB (Joe Public founders Pepe Marais and Gareth Leck recently bought their agency back from Draftfcb). “We’ve watched how other people did this,” says King, “We don’t want to vanish or get gobbled up.”

King says he and Barty has a clear vision of what the agency can achieve by going it alone. Multinationals, they say, no longer understand the spirit of entrepreneurship that drives the them and makes such a success of the agency.

King dismisses the notion that there is a cap on the growth potential for agencies not aligned with international networks (though he admits he believed it once – until his own experience taught him otherwise).

While initially King James tended to pick up local challenger brands (like Kulula.com in airlines and 20twenty in banking) because they shared an entrepreneurial culture internationally, there has also been movement by multi-nationals towards allowing local business subsidiaries to engage ‘best of breed’ agencies in their markets – a boon for the non-affiliated King James have recently started picking up work from international clients.

Barty believes centralised control of global marketing will increasingly be a model left behind as global companies search out local solutions. Independent agencies can be attractive to big clients and retain their maverick personalities while affiliated agenciescan get it wrong as easily as anyone else. “A network doesn’t protect you from producing mediocre work,” says Barty.

King meanwhile says that as staff churn in marketing departments increase, with senior personal now often moving every two or three years, agencies provide stability to brands, if they manage to keep their own staff churn under control. Like at owner managed King James. And after 14 years of hard work King James has the credentials, and the case studies, to make it into any boardroom.

Of course this wasn’t always the case. Start-up King James would win their second client, the Cape Argus, three months after opening their doors, but the win was followed by a seemingly endless line of lost pitches for brands ranging from Wimpy to Hyundai and Kwik-Fit. Hall’s Fruit Juice would only break the losing streak at the end of that year.

The agency was cash positive quite quickly, thanks the retainer model it introduced to clients, a model that they maintain to this day. Growth would be organic without debt or gearing. Barty (who describes himself as thrifty) has helped ensure that King James never produced an annual loss. For the first ten years of its existence it never retrenched a single staff member.

The team soon left the chip shop behind, moving to new premises in Vrede Street. In 1999 they aligned (for a short while) the agency with Leo Burnett. They also implemented their strategy of opening separate divisions in partnership with entrepreneurial minded people like Jenny Ehlers, with whom they opened King James RSVP (the design and promotions arm of King James) and Bruce Wright, with whom they opened Mnemonic, their digital agency.

But it was in 2000/2001 that the new online bank 20twenty really put the agency on the map. 20twenty aimed to introduce South Africans to ‘consumer-centric banking’ and was a division of Saambou Bank. Its launch advertising campaign included a giant wrecking ball parked outside the Sandton branch of ABSA. 20twenty signed up close to 10 000 clients in its first two weeks of operation. The numbers eventually overwhelmed the banks infrastructure, but in spite of this, customers had a near fanatical loyalty to the bank.

Liking what it saw Leo Burnett approached King James with a merger proposal, something that fell through, taking along the affiliation agreement as well, but Barty and King was basking in the success of 20twenty and a growing business.

Triumph would soon turn to disaster in February 2002 with the collapse of Saambou, which were put into curatorship along with 20twenty, only six months after the online bank had begun operations.

Its furiously loyal clients would stay with the bank for another 18 months in the hope that 20twenty would be saved in a buy-out. (Standard Chartered eventually acquired the online bank only to close it down in 2005 – this time for good).

King James lost 30% of its billings when 20twenty went into curatorship. They were also owed close to a R1 million in fees (only repaid to them after Standard Chartered took over the bank). Even worse, the agency had insisted on staff opening 20twenty accounts where their salaries would be deposited. It was the middle of the month and all operations had been frozen. For a moment King James looked like ‘King Screwed’.

It was the staff that stepped up to take pay cuts rather than see their colleagues retrenched. Its work on 20twenty would also attract the attention of what would become the client King James would eventually do much of its defining work for – Allan Gray – which the agency won in 2002. It also launched its PR agency, Atmosphere Communications, with Nicola Nel.

A Johannesburg office followed in 2003 with Charles Matterson, Eoin Welsh and Muzi Kuzwayo. The agency landed (sorry) two key clients in the kulula.com credit card launch as well as Parmalat in 2007. Kulula.com promptly moved its entire account to King James barely a week after the credit cards launch.

When Muzi Kuzwayo and Welsh both resigned from King James Johannesburg within days of one another in 2007 the agency was thrown into turmoil. Eventually King would take control the Johannesburg office creatively. He could see no point in splitting time between Jozi and Cape Town in the age of Skype and broadband, and closed down its studio, moving all strategy and creative to Cape Town. Several important clients, including BA and McCain, are still managed from Johannesburg.

King James also broke its no-retrenchment record in 2008 when it lost Windhoek after four years – they lost five people.

But things have turned around again – last year King James added McCain, British Airways and short-term insurer Santam. King James won the whole of the Parmalat account in 2011 and followed that with bagging the Pan-African Johnnie Walker business of the global ‘Keep Walking’ campaign, before adding the Galaxy business. Annual revenue has broken through the R110 million mark.

The agency also moved into the historic Roodebloem Manor, in Woodstock, Cape Town. King credits the new building for helping blur the lines between the different divisions that make up King James.

And of course there is Punk. “As a business, we keep a very critical eye on our company as a whole and whenever we feel we are lacking in a particular skill, we look to plug that gap quickly,” King explains the reasoning for the new outfit. “Despite the fact that we have had a web and digital offering in the form of Mnemonic, we started to feel that the world of communication is shifting faster than we are.”

King and Barty believes the future of advertising is neither digital nor traditional, but somewhere in between, and that neither the ‘traditional’ nor the ‘digital’ parts of the group are fully equipped to deliver the kind of communication work they think a changing world is moving towards. So, while Punk will be a standalone company within King James Group that will build its digital credentials, its primary role is to help the group evolve its work in the direction we feel it needs to,’ says King.

Mnemonic has been folded into Punk (Mnemonic cofounder Wright takes a shareholding in Punk and remains CD), so it starts with a good foundation of clients, while the entire agency has been juggled around so it sits amongst the King James creative teams plus social media agency Society.

Ross will not only front the digital outfit – he has also been named executive creative director at King James while Udell takes on the role of an integration officer with the brief to pull together all the different divisions and making them gel smoothly and kill off any silos in the agencies strategic or creative thinking.

Which is of course a road less travelled in itself. But one the King James Group seems intent to set out upon to ensure its sustainability and independence.

Reprinted from the February 2012 edition of AdVantage magazine.

Magazine covers we love: All boxed in

MarkLives.com runs a regular slot featuring the best local and international magazine covers every week. We recognise well thought out, powerful and interesting (and hopefully all three in one) magazine covers and celebrate the mix of pragmatism, creativity and personal taste that created each of them. By media bloggerMediaSlutZA.

National Geographic is famous for a lot of things, but one aspect of NG stands out as a trademark symbol, the thick yellow border. It’s recognized everywhere and distinguishes this publication from most others. TIME achieved similar iconic status with its red border.

I’m noticing that more and more magazines are adopting and adapting this recipe of a thick border and in the centre a picture that’s supposed to sell the issue.

INTERNATIONAL
Fantastic Man, Issue 15, 2012

Fantastic Man issue 12The most famous of the new breed of ‘boxed-in’ covers is probably cult favourite Fantastic Man where this design and it’s unique paper stock for the cover is easily distinguishable.

The Gentlewoman, Spring/Summer 2012 (Issue 5)

The Gentlewoman 2012The little sister of Fantastic Man, The Gentlewoman, definitely adopted this recipe, adding more colour to the border.

Surf, May 2012

SurfI won’t go as far as saying that (Transworld) Surf Magazine copied the cover-look from Fantastic Man, but there are definitely elements that seem quite close.

Stylist, Issue 121

Stylist AprilStylist is also famous for their covers and they just keep delivering issue after issue with something beautiful for the main-centre-image.

LOCAL

NewsNow, 5 April 2012

NewsNow Locally NewsNow seems to have adapted the boxed-in look of Maclean’s – a Canadian publication. Read my post about the similarities here.

VISI 59

VISI magazine has also adopted the “white border”-element since VISI 43 (June 2009). It’s been a while and it wouldn’t surprise me if Visi dropped this design aspect soon.

– The (for now anonymous) blogger behind MediaSlutZA knows way too much for his own good about media in South Africa. Magazines in particular. His mission is to show when South African magazines might fail, but most importantly, succeed. If you’re looking for a library about South African magazines and news, your one-stop pitstop is MediaSlutZA. #MagazinesForTheWin

– Find a cover we should know about? Tweet us @marklives and @mediaslutza

Capitec’s marketing team on the Capitec way

Members of Capitec’s marketing team on the Capitec way

Pieter Marais –  Head of Marketing

“In a recent brand discussion Gus Silber said about Capitec Bank “they are not like other banks”.  This statement says more about the other banks than what it says about Capitec Bank.  The same goes for marketing.  In my thinking about the Capitec Bank brand I apply the motto – don’t think like other marketers.  There are many marketing offers coming through one’s inbox and marketing articles and seminars preach more of the same.  Our success lies in cutting through the clutter.  We are however fortunate to work on a brand that allows free thinking outside the banking category box.” capitec logo

Jennifer Coetzee – Manager: Direct & Relationship Marketing

“Our aim is, simply, to give clients control over their money management. We show them what their banking costs them and how they can improve on this – e.g. how to save on bank fees. All the while, we test the service experience we create for our clients.”

Sbusiso Kumalo – Head: Channel Marketing

“Capitec’s CSI programme focuses on three main areas of support: high school education, donations and financial literacy. The bank’s support includes giving financial assistance in the form of bursaries and donations, presenting financial skills programmes to schools and communities, as well as building mutually beneficial relationships with these recipients to gain better insight and understanding of their areas of need and the impact of our CSI activities. We ensure that the resources we give reach the recipient and don’t get used up in administration.”

Charl Nel – Head: Strategic Communications (Marketing & Corporate Affairs)

“I consulted to Capitec in 2008 and my project was focussing on establishing the in-house studio and the new brand ID and brand positioning. In 2009 I joined the marketing team and really experienced first-hand what the difference is between brands that take control of their brand strategy in house versus brands that have abdicated from this responsibility and allow agencies to do their brand strategy.  I believe that it is this difference in approach that delivers the results we experience in the market.”

Russell Petrie – Creative Head: Capitec Bank Design Studio

“The studio is a vibrant, handpicked team of multitalented specialists who work closely with Marketing to create direct, fresh and relevant communication. We’re hands-on and do whatever it takes to finish briefs while having a laugh. That’s just how we roll.”

Reprinted from the February 2012 edition of AdVantage magazine.

Capitec’s 6 P’s of marketing

by Herman Manson (@marklives) Today’s consumer is bad news for the banking industry. They are an unhappy bunch, as the Global banking survey 2011 by Ernst & Young revealed, when it found that nearly half of SA’s banking consumers felt unsatisfied with the service they experience from their bank.

Service quality was given as the primary motivation for switching banks by 96% of South African customers according to Ernst & Young who also found that South African customers are the most sensitive to price, with 57% citing it as a main reason for a change of bank.

It’s easy to hate banks. The bureaucracy, the hidden costs, the soulless, soul destroying slog of resolving any issue that doesn’t fit the clearly templated existence of their customer “support” personnel, the stupid office hours…

Obviously there is a service gap in the industry. It’s one spotted years ago by the founders of Capitec Bank – today the fastest growing retail bank in the country and the first to finally make the Big 4 (ABSA, Standard Bank, Nedbank and FNB) sweat. The reason for the discomfort is because Capitec decided to build a bank based on easy to understand and affordable banking products.

Consumer discontent opened up the market for this “straight talking organisation” according to Carl Fischer, Head Executive of Marketing and Corporate Affairs at Capitec. Fischer says he has no idea how the Big 4 justify their costs and business practices and increasingly consumers don’t either. Capitec wants to change banking “like Kulula.com changed the airline market” says Fischer. That is – it wants to bring about fundamental change to this market.

Fischer says 10% of SA’s banking population use credit cards – the other 90% don’t have access to these and bank via their saving accounts. Capitec simply asked what consumers really want and require?  The answer – a transaction account that earns interest. As a result Capitec’s  products are built on the ability to save, borrow and transact. Low cost and ease of use should be what banking is about, says Fischer.

Fischer sees some bank products as commodities – i.e. Home loans or car finance – if the brand doesn’t matter then consumers use the lowest costing home loan or lowest cost car finance. It is only the one to one transactional account where brand becomes the determining factor, he says.

Consumers have lost faith in branch managers, the traditional human interface between a branch and clients, as decision making power where centralised away from them, meaning little value remains for consumers in maintaining those personal relationships with banks.

Capitec’s management team has turned the traditional banking on its head. “We do not think like bankers,” says Fischer, “we think like retailers.” This means seeing at every aspect of the business from a consumer point of view. Banks create products around which consumers need to fit and adapt, while Capitec pursues an open platform defined by the individual consumers’ needs.

For example it’s the Global One facility offers transacting, savings (you can open four of these on your Global One account and call them for example Savings, Holiday, Emergency, Fund etc. – each with a monthly admin rate of R4.50) and credit options in one facility. And forget being required to fix accounts at the standard 32 days, 6 months, 12 months etc. – with Capitec you can fix your accounts according to your own goals and requirements.

It also adopted regular business hours rather than the traditional banking business hours for its branches to be open. Capitec branches are open from 8am – 5pm on weekdays (8.30am on Wednesdays) and 8am – 1pm on Saturdays, while specific branches in major shopping malls are also open on Sundays 10am – 2pm.

The bank was launched in 2001 and built on the back of its micro-credit business. While it was always the intention to establish a proper bank the micro-lending platform enabled earnings over the three-four years it took to put the banking infrastructure in place, says Fischer.

This meant Capitec launched into the low income segment of the South African consumer market and has been gradually working its way up towards the middle and upper middle income segments. Quite the reverse of its rivals who have all been piling in to target the low income market – partially under pressure from government regulation but also because Capitec had clearly shown there was a profitable market to be had.

Fischer admits that its low end entry has meant the bank has had to work hard at changing market perceptions formed in its early micro-credit days. Initially the focus had been on product offers and localised marketing rather than on building a national brand. The bank only launched a national branding campaign in about 2006 as it started repositioning itself in the broader market.

Today Capitec’s branding campaigns clearly position the bank as easy to use, straight talking and cost effective in ways that appeal to this broader market and the bank is investing in placing branches in shopping malls where a wider income range of consumers gather.

Straight talk extends beyond its marketing mantra to the organisational culture, says Fischer, who says the founders of Capitec really set out to build an “anti-bank.” Its headquarters spans a number of low rise buildings in Stellenbosch, furnishings are basic through to the CEO’s office. In a service industry your people are your brand, notes Fischer. They don’t do suits here (they are the anti-bank, remember!).

Capitec branches generally consist of only nine people, including a team leader (the branch manager at other banks), whose primary focus is addressing clients’ needs rather than paperwork and managing risk, which in both counts have shifted from being done by personnel to technological processes. The bank is moving quite aggressively into retails spaces even as its rivals move to the taxi ranks.

Quantity wins over size when it comes to its physical spaces – the bank would rather open more offices in an area than scale one office. It’s all about accessibility and convenience says Fischer.

It also means branches are profitable much sooner than those of Capitec’s rivals – and much cheaper to launch. A branch costs around R1 million (or 10-12% of what it costs rivals) to establish and is generally profitable within 6 months of operation.

Branches don’t hold any cash for withdrawal (but you can deposit cash at a branch) – instead consumers draw money from tills at retail outlets (‘Tills are the new ATMs’ says its marketing communications) and ATMs. Consumers can draw cash at Pick n Pay and Boxer stores (charged at R1 per withdrawal) while Shoprite, Checkers and PEP allows cash back transactions (cash withdrawals with purchases).

Fischer explains that this way the cash cycle is dramatically reduced – along with costs to the bank and ultimately the customer. Traditionally the cycle goes from consumer to the retailer, then to the cash handler and the bank, back to the cash handler, to the ATM and finally back to the consumer. Capitec recycles value between customers and retailers taking out all the middlemen. Retailers meanwhile are only too happy to have cash taken out of their systems.

On its shift towards a broader market segment Fischer says class or income has nothing to do with one’s banking ability. At Capitec all are treated the same. Branches in upmarket malls look exactly like they do next to a taxi rank or in a township.

Location and access is important and Capitec is shifting perceptions by associating with A and B grade malls to attract more of the middle segment market. Its marketing communication similarly focuses on the innovative ways Capitec does things differently rather than to position the bank as a “cheap solution”.

Capitec has been working on expanding usage of its digital and mobile banking solution as well after waiting to ensure the offerings where were they needed them to be. Fischer says the bank is making headway in the youth market with these product offerings and has been targeting universities and other institutions of learning. To date, says Fischer, these services have been under marketed. This is about to change.

Technology is driving the future of banking – it brings down cost which is in the best interests of consumers. For Capitec the challenge lies in making technology easier to understand and to access. The ultimate goal is to allow consumer to get where they want to go in the fewest possible clicks, says Fischer.

Capitec also moved its communication strategy in-house because the banking sector is a complicated one and those inside the organising is best positioned to fully understand the market and broader banking environment. It was, says Fischer, about claiming back the role many marketers have abdicated to ad agencies, and allows greater control on delivering communication the bank knows it can deliver on. While the bank owns its own in-house studio it also makes use of the services of agencies like Quirk and 140BBDO.

Fischer says after taking the communication strategy in-house the effect was an immediate lift in its market share.

Today Capitec has 475 branches, more than 3.2 million customers and over 6000 staff members. Monthly client acquisition numbers range from 70 000 to 90 000 new customers a month.

This performance lead Swiss-based financial services group Credit Suisse name Capitec a ‘Great Brand of Tomorrow’ in its 2010 report – one of only 27 selected from around the world and the only one to emerge from the African continent. The report identified brands Credit Suisse believes will significantly outperform the market over the next 3-5 years as they build and leverage brand equity to grow in size, scale and profitability.

Capitec’s competition has taken note of its growth and has created products and services to counter it. FNB launched EasyPlan – a paperless banking offering which allows customers open an EasyPlan account, take out personal loans, and sign up for a funeral policy – with its own branch network. ABSA has rolled out more loan centres while Standard Bank has redesigned its distribution platforms and Nedbank has put more emphasis on segmental marketing. The Big 4’s challenge remains a service mind-set structured to the upper end of the market, says Fischer. Their branch infrastructure remains expensive, Fischer points out.

The competitive environment heated up after FNB laid a complaint with the ASA charging that Capitec cannot support a marketing claim stating it charged the “lowest banking fees” in the market. The ASA found against Capitec on a technicality – the documentation it submitted to substantiate its claims where not from SAMRA accredited researchers (Fischer says he was unaware this was a requirement). Dismissing the documents at hand the ASA found against Capitec.

According to Fischer only 10% of South Africans understand the concept of inflation – meaning 90% don’t. It illustrates how financially illiterate South Africans really are. For Capitec the challenge is getting that 90% to bank better through its simplified offer and conditions. Bank thinking haven’t made much of dent in that figure – Capitec is betting a consumer centric retail view of banking is about to change all that.

Ultimately Capitec’s brand is being built on the 6 P’s of marketing, Fischer adds People and Processes to the traditional four of product, price, place (distribution), and promotion. The response, to Capitec and others, coupled with a global shift in consumer expectations and behaviour, indicates the time of only 4 P’s are over. And Capitec is helping lead the charge.

Reprinted from the February 2012 issue of AdVantage magazine.

Freelance goes ‘e’

by Arthur Goldstuck (@art2gee) Last month’s arrival of the global freelance portal Elance in South Africa was inevitable; it already has a deep virtual presence.

A few years ago, sitting in a conference in Maputo, where the content was dull but the WiFi was great, I called up my web site on my laptop computer. It struck me that my logo was in even greater need of refresh than the PowerPoint slideshow I’d been watching.

What to do? The last time I’d approached graphic designers to turn up the visual temperature, their quotes were so high, I’d decided to stick with the half-baked version.

But suddenly, the speaker referred in passing to an international portal for freelance contractors called Elance. I’d used it before, but it had slipped my mind. I quickly logged on, entered a search for logo designers, and instantly found hundreds of prospective designers, located across the world. I identified a dozen in South Africa, India and Pakistan who were showing off attractive portfolios of their past work.

I entered a job specification, and invited half-a-dozen freelancers to submit proposals. I was utterly unprepared for what happened next: before the presentation was over, I had three proposals for the job. One came from a designer in India who had done superb work for a variety of little-known American organisations. His price also happened to be one tenth of what I had typically been quoted in South Africa for the same job.

By the time the conference session had ended, the designer had been commissioned, the payment had been made into an escrow account, from which it would be released to the designer in India once I was happy with the job, and we had an agreement on a deadline: a mere week away. All of this negotiated while I sat in a humid hall somewhere in Mozambique.

In the course of the following week several rough designs were submitted, one was selected, and the final logo arrived before the deadline.

This was not a unique experience. Last year alone, 650 000 jobs were posted on Elance. In the last 30 days alone, the tally was 65 000. And no less than 1.3-million “contractors” have registered on the site to offer their services.

The truly significant statistic, of course, is how much these freelancers have earned. Last year, $150-million was paid out to contractors. Since the site first launched in 2007, the total has come close to half-a-billion dollars.

South Africa happens to be the tenth largest company in terms of number of contractors on Elance, with close to 10 000 having registered. Half of these placed themselves in the Creative category.

This did not escape the attention of Elance. When they were approached by Chris Savides, General Manager of FNB Complementary Online Services, to come into the country, they jumped at the opportunity. Last month their vice-president for Europe, Kjetil Olsen, formally introduced Elance to South Africa at the Design Indaba 2012 in Cape Town. In partnership with FNB, they announced a Paper Wallet Design competition to highlight the idea that “you can get paid for any extra effort that you put into creative exploits in your free time”.

Not that Elance is only about creative types. More than 1 700 South Africans registered on the site can be found in the IT category, around 600 in Marketing, and no less than 2 600 in Operations.

South African clients, on the other hand, have posted more than 7 000 jobs, at an average job budget of $1,061 – somewhat more than I paid for my logo!

However, most of the South African contractors get their work from outside the country. They’ve earned an average of $32 an hour for their efforts on Elance, whereas South African clients offer an average of $17 an hour.

Elance has brought $1.4-million in revenue to South Africans since the service began, making this only the 17th largest country on the site in terms of earnings. That could be because locals are not quite as hungry for work as contractors on the Indian subcontinent. I never did hear from the South African design who was invited to submit a bid for my logo!

* Arthur Goldstuck heads up World Wide Worx (www.worldwideworx.com) and is editor-in-chief of Gadget. Follow him on Twitter on @art2gee. Reprinted from Gadget.

BA’s High Life comes to South Africa

by Herman Manson (@marklives) High Life, the much applauded inflight magazine of British Airways, is getting a localised edition for BA-operated Comair. The new magazine replaces Horizons – Comair’s previous inflight title, published by Media24. The contract was awarded to Omnicom-owned content marketing firm Cedar Communications UK and the first edition appeared 1 April 2012.

Cedar is also the publisher of the UK edition of High Life and has recently started on an international expansion programme, which includes China and now South Africa.

According to the magazine’s South African editor, Sonya Schoeman, the local edition of High Life will replicate the international edition’s content intact in the second half of the magazine, while SA content will be placed in the first half of the magazine.

The combined magazine will run to 128 pages, of which 54 will consist of local content and advertising, and the rest will be made up of the international content and ads.

This way, the international content stays intact while relevant local content, which will focus on southern Africa, gets a chance to stand on its own. Stories will focus on travel and lifestyle trends, and content will display unusual angles and be compact, punchy and fun.

Schoeman hopes to establish the read as a favourite with flyers by focusing on the latest trends and linking it to undiscovered or unlauded SA success stories. So, for example, a story on foodie entrepreneurs looked to discover and tell readers about quirky but excellent local food producers – some of them even operating from their garages. A taste test of five different brandies featured an expert taster’s opinion, that of a mixologist, and Jack Parow’s.

While the magazine won’t have a digital presence immediately, it is on the cards, says Schoeman. A local team of four, including a content director (Adelle Horler) and a local art director, work on the magazine full time.

The initial print run will stand at 16 000. Research suggests a readership of 10 people per copy, says Schoeman.

Schoeman, who also edited Horizons, says her strong relationship with Comair meant the client was keen to continue their relationship with her, resulting in her being offered editorship of High Life.

Cedars’ international and UK business development director, Hannah Saunders, says the group is driving international expansion through UK clients, such as BA and Tesco, with interests in other countries and territories. Last year it opened an office in Shanghai, where it is producing a magazine for Tesco in Mandarin.

Cedar has been publishing the UK edition of High Life since 1992. It was bought out by Omnicom in 1994 and placed with the BBDO group. High Life in SA will be produced in collaboration with New Media, whose offices it also shares.

Saunders says the alliance with New Media allows it to join international best practice with local management skill. Saunders believes Cedar, with experience in retail, travel and leisure, fashion, and finance, will be able to expand and grow its content marketing portfolio in SA, including its digital offering. She is excited by the possibilities SA offers to her group.

Cedar is also exploring the possibility of further localised editions of High Life in other parts of the world.

According to New Media’s business development director, Andrew Nunneley, the contract for High Life in SA is held by Cedar UK, which has outsourced most of the publishing services to New Media as its partner in SA. Saunders and Nunneley both reiterated that a Chinese wall exists between competitor clients (New Media holds the publishing contract for low-cost airline Mango, as well as retailer Woolworths).

’50 Wildest African Experiences’ is the theme of the premier issue and looks at events as diverse as AfrikaBurn and encounters with lowland gorillas in Central Africa.

Bizcommunity Originally published on Bizcommunity.com Marketing & Media | South Africa – click to see more comments.

Live from SA – the youth have their say

by Herman Manson: @marklives Live SA is a new youth publication published out of Cape Town. There’s the usual stuff on love, YouTube, being brave and following your heart, should you get that body piercing, music, freedom and fashion – and then maybe the less usual stuff, about falling out of the closet aged 16, what to do when your countrymen’s infamous xenophobia breaks down the lives of friends, of falling in love with gangster boys and having Miss Khayelitsha pose in front of the backend of a construction truck…

Youth publishing as a social enterprise – a concept even more unique than the content and contributor base (which consists of mostly untrained youths aged between 18-25) – has landed in South Africa, courtesy of Brit Gavin Weale and the Shuttleworth Foundation.

Weale, who has a background in journalism and marketing, had joined a marketing firm in London in 2001 called Livity, which pitches itself as a socially responsible marketing agency that aims to deliver on both brand and CSI targets. Live UK was one of its first projects, and launched as a magazine that allowed the local government to talk with disaffected teens in South London.

Using teens (initially from a local youth club) to direct and create the content of the magazine under guidance of professionals in the industry, the quarterly publication soon took off. The UK edition shares offices with Livity, which is great for the magazine because it creates a professional office environment for its contributors, and a large part of Live’s function consists of preparing kids for the work environment. It’s great for the agency, too, as its core constituency actively interacts with it every single work day.

A magazine and CSI project turned into a youth-training project “by mistake”, and Weale and his partners soon placed the magazine in a non-profit company which sees as many as 1000 kids pass through its offices every year.

Employability (well, the lack there-of) is a significant problem amongst the youth in the UK, and even more so in SA, and it’s a core issue being addressed by the magazine, which hopes to see its co-creators inspired to go back to school, take a job, or just integrate a little easier into social and professionals situations. The project aims to draw kids from a wide audience – and part of it is set aside to assist bringing young offenders or kids recommended by social services into a positive interaction with society.

In the UK, the magazine has since been weaned off government money and runs as an advertising-supported, not-for-profit business.

Weale headed to Cape Town in 2010 after being shortlisted for the British Council’s UK Young Publishing Entrepreneur of the Year award that required him to develop a business plan for a publishing enterprise in a developing economy.

Having won the prize for his vision of bringing Live magazine to our shores, Weale started meeting with industry players, ranging from ad agency guys such as Mike Schalit, whose Cape Town offices Live magazine now shares, to the Shuttleworth Foundation, which ultimately offered him a fellowship to help finance the new venture.

Twenty teens from different parts of the city – ranging from Athlone to Khayelitsha to the city’s northern sub-burbs – have taken on internships.

Pic: Chris Saunders

The internships have been created for unemployed young people who wanted to participate in creating the magazine, which is distributed free of charge and has a print run of 50 000. Ranging in ages from 18-25 years old, they come in for work a minimum of three days a week.

Weale says he looks for potential and attitude, rather than education, when selecting candidates. Mentors from the industry volunteer their time to train the team in producing each issue.

Issue one hit the streets mid-November 2011 and the second issue came out late February 2012. Staff turnover at the magazine is high, Weale admits – the second issue also saw its second editor – and Weale is still trying to figure out how to stabilise this, although, since youngsters are encouraged to engage with a work environment, some of them do go out and find jobs, so in a sense it also helps the title achieve at least one of its objectives.

One former staffer moved into a radio job three months after joining Live, while another received an internship at 140BBDO. Weale is also forging links with organisations recruiting young talent.

Of course, some kids, for better or for worse, simply fall out and back into old neighbourhoods and habits.

The title is distributed at schools, universities and colleges, malls and through neighbourhood networks organised by contributors themselves and which accounts for around 40% of the total distribution.

Brands such as e.tv, Google and Chicken Licken, as well as the Department of Higher Education and Training, have signed up as sponsors and advertisers. In May, the magazine will launch a mobisite to facilitate reader interaction and it’s also active on Twitter, Facebook and YouTube.

Weale says parallels between the youth in London and Cape Town includes their ambition and cultural activities (music, movies etc) and the extent to which the education system in both countries impact (sometimes disastrously) on the futures of young people.

Surprising to him was the SA youths’ reluctance to just get into the job market and make a go for it, especially those with a tertiary education; they choose to not work at all and stay at home, rather than accept what they consider positions below their stature. Navigating through this culture of expectation, says Weale, is a major challenge for an organisation that wants to prepare youngsters for the real world of employment.

Kids need to take responsibility back for their own futures, says Weale, if they hope to succeed and build a better future for themselves.

Weale also found local contributors aren’t as outspoken as they are in the UK, don’t question the status quo as often, and are socially more conservative than he expected. Of course, a lot of his young contributors still stay with their folks, and it has to be taken into account that their parents will engage with the magazine they help produce. Our educational system isn’t exactly geared to nurturing questioning the status quo, either, as Weale is finding out the hard way.

The magazine will, however, find its own strong voice in its own good time as contributors grow accustomed to their roles and responsibilities (also to readers), and the employment churn rate at the magazine stabilises.

The title has funding to finance it through to March next year; it’s finally recruiting a professional sales person (having had to rely on Weale’s efforts in the interim); and Weale hopes for more corporate support as the year progresses. Media planners haven’t engaged, to nobody’s surprise, so Weale is forced to pursue more direct routes to marketing decision-makers.

Weale is calling on brands to engage with a demographic that is important to their future sustainability, to take a long-term view and invest early on in an audience that is going to be hugely important 5-10 years down the line, and to actually make a difference.

In short, Live is about giving back as an investment in young people – it’s a hand-up, not a hand-out – while also achieving marketing and CSI goals.

Paging through the second issue, it’s easy to spot the budding talent and it’s encouraging to see how a print magazine engages with a digitally adept audience through Twitter handles for staffers and YouTube content. It’s also surprising how mzansi the magazine really is – it might have a sister in London but it’s South African down to its last blot of ink.

Marketers need to engage with SA youth outside the carefully targeted LSMs, that tunes out everything you don’t want to hear, through platforms such as Live if they truly want to keep their fingers on the pulse of local youth culture and attitude – they are live and streaming to a magazine near you.

Bizcommunity Originally published on Bizcommunity.com Marketing & Media | South Africa – click to see more comments.

Creative director running (between meetings)

by Sammy-Jane Thom, Creative Director, Saatchi & Saatchi So I’ve joined a running programme that takes you from beginner status to half-marathoner and then full marathoner in roughly 7 months. Reactions are varied but tend to sit in either the “wow” or “seriously?!” camp. Despite incredulous looks from colleagues, I have realised that there are, surprisingly, a lot of parallels between running and a day at the office.

Believe in the impossible as a starting point
I was not born a runner and I have the genes of many generations of Irish women before me where our bodies tend to store every potato we eat

Sammy-Jane Thom
Sammy-Jane Thom

in preparation for the next famine. However, after 8 weeks I am now running just over 10kms with the seemingly impossible idea of running 42kms in July.

We work in an industry that allows us to live in a realm of possibility. A place that allows us to think of transformational ideas that evolve, amplify, expand, improve and engage. Coming to work in a realm of possibility means adjusting your headspace, not your clients or the colour of your office wall.

It’s seeing the possibility in everything. It’s starting every day, every meeting and every review with the Possibility Approach. Ordinary ideas don’t get you onto the stage or invited into the lives of millions. There is no space for ordinary in possibility. There is however ample space for humility, risk-taking and failure. There’s always space for questions, improvement and curiosity. But best of all, there’s room for team, inclusion and a sense of us.

Give me a T-E-A-M
What do a German model, ex-South African swimmer, a competitive cyclist and a woman who climbed Kilimanjaro for her birthday have in common? They are my team mates and they can run. They are the ones I’m accountable to and who in turn keep me running up the hills. Surround yourself with top class resource to help you achieve your goal.

James Griffiths, business leader at Saatchi London, highlights teamwork as the contributing factor to T-Mobile’s highly successful and viewed (26 million) stunts on YouTube. Hire carefully, prioritise grit (better than ambition), intelligence and cultural fit (not conformity but shared values).

“We try and find people who are aligned philosophically but have different passions” – Paul Malmstrom of Mother. And if you inherited the 9 to 5 suit or self-congratulatory creative, apply the filter of Possibility.

Just do it
There is a vast difference between dreaming it and doing it. Sleeping-in never covered any mileage. In the same way, aside from the Print Category, ideas were never meant to stay on paper. In order to come to life, your idea needs you to be brave.

It needs you to put in the preparation and take care of the details. Your idea needs you to be persistent. Don’t give up too easily. There comes a time when you need to call it, but then know that you gave it your best. Your idea requires action.

“It’s more important to get stuck in, than be very good” – Andrew Shoben of Grey World.

Blood, sweat and tears
The worst thing that I have encountered in running is probably gravity, otherwise known as hills and steps. Between gasping, heaving and dragging leaden legs, and retrieving lungs that have exited body, I realise that after hill one I now face stairway to Heaven, via Hell.

After the fifth step I begin hanging on passersby with desperate facial expressions before losing remaining dignity and dropping to all fours to continue climb. Yes, as much as running requires sacrifice, so does creativity.

Creativity is unreasonable. It demands a lot and makes you feel uncomfortable. For some it is jam sandwiches and no sleep for a year. Perhaps its late nights having a meltdown instead of a drink, or giving up a salary or profit for the first two years? Whatever it is, creativity is going to take it.

Let go of the nunu blankie
The alarm goes off and through blurry eyes you can’t make out a thing. That’s because it’s still dark, very dark. Then you see that’s it raining, you stand up and realise that someone has swapped your body for an anvil and you only have 5 minutes to get to the meeting point of a new running route, at the base of a mountain.

Conditions are not always ideal, but sometimes this is exactly what you need. Creativity is not waiting for the perfect environment, partner or salary. In fact, creativity flourishes in adverse conditions. Obstructions such as budget or language or media can result in a focused approach and ultimately better ideas.

Remember Droga 5’s  launch of Puma’s Bodywear collection with The Puma Index? They did it in the recession to stores globally with no media budget at all. Results: 130 million media impressions, one of the Top 20 Apps of the year and a Silver Pencil at One Show.

As designer Paul Sahre said, “Nothing interesting happens if you know where you are going; trust in the unknown and design whatever you want”. A sentiment echoed by Clive van Heerden; “Don’t stick to your comfort zones, enter through the cat flap”.

Why so serious
Being competitive and pushing yourself beyond reasonable limits can result in a joyless experience. A healthy determination tempered with a large dose of humour is a prerequisite for competing in an unpredictable environment.

At some point the pain should give way to enjoyment, check in with yourself once a while to make sure that 70% of your days are still fun. After all, “You learn better if you can laugh” – Sissel Tolaas.

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