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S’HOT: ‘five o’clock shadow’

The Client: BBDO New York – Gillette USA
The Agency: AM I Collective for BBDO New York
The brief: Create three executions for Gillette razors, playing on the idea of the ‘five o’clock shadow’ that appear on men’s faces if they don’t have a close enough shave. The five o’clock shadow in each execution was to be interpreted as the shadow of a monster, frightening the characters in the scene that are interacting with our hero. The style reference was Tim Burton and Edward Gorey – macabre black and white sketched characters in a slightly dark and distorted setting.
Creative Solution: In typical AM I fashion they adapted the character styles somewhat while keeping the elongated, contorted proportions of Tim Burton’s work. In addition AM I also added textures and interesting little details like hidden smaller characters, telling sub stories. AM I also provided hand typography for the copy (poems) that were supplied. The campaign ran over Valentines Day in US print media.
Creative Team: Am I Collective

Fro my June ‘Create’ Colunm in AdVantage magazine.

Free your agency from fear

There is only one thing that makes a dream impossible to achieve: the fear of failure. – Paulo Coelho

It’s the secret ingredient. It’s what, when all the other fundamentals are in place, will make the difference between success and failure, between being good and being great. If you currently have it, keep it that way, if you don’t, do what it takes to get it. By Charl Thom, MD, FoxP2

I’m talking about the liberation of your employees, your clients and your business, from fear. This is probably the single most important message I took away from my recent visit to the 58th Cannes Festival of Creativity. It also confirms what I have long believed to be the single biggest factor in creating great work in an advertising agency (or any other business for that matter).

Whether I was listening to Jeffrey Katzenberg, Founder or Dreamworks Animation Studios, or Dr Edward de Bono, the man credited with the invention of lateral thinking, I kept hearing and seeing the same thing in different ways. Liberation from fear makes you free and builds your business.

1) The freedom to think big. There is an immense amount of poor thinking in the world. Just look around you. Point made. Work with a team and clients that are hungry to think big and in an environment that fosters big thinking. Be brave enough to part ways with the ones that don’t.

2) The freedom to act. The relationship with your team and your clients need to be one where big thinking is encouraged and acted upon, not just spoken about. It would be too easy to only talk about it. Great creative work in an agency is going to require experimentation and taking risks and sometimes you will fail. In order for big thinking to truly become a part of the culture, there needs to be permission to fail, or the creative process will shift to a process of creating safety. An agency needs to be the environment where all this is made possible and South African agencies have what it takes to mix it up with the best in the world, if they are brave enough to embrace freedom from fear as part their culture.

3) The freedom of financial stability. It’s all fine and well to take risks but one uncalculated risk can sink a business. Critical to creating an environment free of fear is to ensure that from day one a business operates in a manner that creates financial stability. Taking risks means sometimes you will fail and a business needs the financial stability to sustain it through that. Don’t be surprised though, if once you have achieved the financial stability to take risks free from fear, the rate of failure in a business declines.

Why is liberating a business from fear so difficult to achieve? Because more often than not you don’t destroy big thinking, or give in to fear, by making one big compromise. You do it by making a near endless series of seemingly minor compromises.

Live and breathe freedom from fear in every single decision and detail of your business no matter how small.

And next time you’re faced with a scary decision, think of what Eric Schmidt, CEO of Google considers to be the best advice ever given to him: “Try say Yes.”

Life shrinks or expands in proportion to one’s courage – Anaïs Nin, Diary, 1969

Reprinted from the blog of Charl Thom.

2010 hit the reset button in Cape adland

In spite of some turbulence, post Great Recession it turns out that 2010 wasn’t such a bad year for Cape Town’s adland after all. While big account moves in Cape Town were rather limited, agencies are taking the initiative to reinvent their internal processes, in some cases shedding staff and departments, while looking for work coming out of Johannesburg or internationally.

Alistair King, King James

King James has had an absolute stonker of a year as Alistair King, Group creative director at King James Group, puts it. “It has probably been our most successful year to date.” King James boasts a number of major account wins for 2010 including Santam, Parmalat and Johnnie Walker Africa. King James grew its head count from 55 to 64 while the larger group grew from 107 to 122.

“All of our companies grew this last year, and we believe our integrated approach, which we have built our company around since we opened in ‘98, has been a huge factor this past year,” says King. “Our work is much more integrated in style, and our clients seem to be demanding more of that kind of communication, probably because they see it as more cost effective. We see clients integrating PR and formal advertising more closely, and looking for earned media to be greater than budget spent. We have been doing this pretty effectively on Kulula in particular.”

Draftfcb Cape Town also grew its head count from 115 to 131 and took on board a new managing director in Godfrey Morley. Revenue for the year increased by 15.7% on a tough 2009 thanks to RCS (ATL) and Engen joining its client roster. The agency merged its abovethe- line and below-the-line creative departments to form ‘one multi-disciplinary studio with through-theline capabilities.’ It also collapsed internal structures by grouping client service, strategy, media and experiential teams into two client business units defined by client type.

Ogilvy Cape Town also reported revenue and profit growth. According to MD, Gavin Levinsohn, the group successfully launched Neo@Ogilvy, their online media planning and buying business department, as well as Record Edit Create (R.E.C) – an in-house video production and editing business and Ogilvy Earth – a new sustainability consultancy. Ogilvy Interactive grew with VW and Audi’s increasingly digital focus. The Ogilvy Digital Marketing Academy (ODMA), a formal sixweek programme aimed at up-skilling staff in the world of Web 2.0 and run by digital specialist Dave Duarte, saw success with 60 staffers graduating in 2010 and another 60 graduating in 2011.

The Bester Burke Slingers Group also launched two new agency divisions. Two Dry Sticks, a digital strategy consultancy and DONA, a full-service agency specialising in vernacular advertising and strategic solutions, include English vernacular.

The Jupiter Drawing Room showed 12% growth year-onyear with a little help from the 2010 World Cup and increased its head count to 146 from 132. MD Claire Cobbledick took control of the business in November from Kevan Aspoas (now serving as CEO) and has reorganised the agency into four full-service teams with specialist experts (in social media, promotions etc.) moving between them.

Even prior to the economic shake out agencies have been under pressure to reinvent their business models. They are emerging leaner and more focused, says Andrew Brand, MD of ninety9cents, with renewed focus on understanding digital channels, clients meanwhile continue to expect more effort, more accountability and more results. “But I don’t believe the increased pressure will be detrimental to the industry,” says Brand. “I actually believe we will all emerge better off with an increased awareness of what’s really important – doing great work that works harder for clients.”

Y&R Cape Town MD, Alan Schreiber, says Cape Town’s agencies are finding work in Johannesburg or internationally to make up for a limited client base within the provincial boundaries. Schreiber expects that this year clients will continue to put pressure on agencies to reduce agency staff numbers and to work smarter.

Cape Town’s increasing international creative cred is also cited by Wayne Naidoo, CEO of Lowe Bull, who says the city is still perceived as a creative hub for networks with many international agencies outsourcing some of their toughest briefs into their Cape Town agencies. The agency recently won a global Skip project from the Unilever stable.

The story first appeared in the June 2011 edition of AdVantage Magazine.

International adland recruitment consultancy opens in Jozi

Fabric, an international recruitment consultancy focused on the media and marketing sectors, has opened its doors in Johannesburg under the leadership of Jacqueline Rose. Fabric also has offices in London and Dubai.

According to Rose, the agency’s London office (which was established in 1999) has experienced an influx of South Africans working in the marketing, advertising and communications field wanting to return home after gaining work experience in Europe. Economic growth in Europe is in shambles at the moment, due to its debt crisis.

Rose, who spent much of the past 23 years in London, returned to South Africa late last year, after which she was approached by Fabric to open its new office in Johannesburg. Rose had started her career at TBWA\Hunt\Lascaris and was later be headhunted by Shell International in London to implement its new global identity rebrand. She also has a decade of experience in recruiting for both agency and client-side businesses in London.

Rose says SA has emerged with a sophisticated communications market and local agencies are seeking staff with international business experience and design knowledge. She says she is seeing lots of opportunity at senior level, while mid-level project managers are also in demand. All-rounder production managers are scarce and in great demand, she adds.

SA agencies, all keen on positioning themselves as being fully integrated, are also looking for people with experience across a wide range of sectors, including retail, digital and experiential, while in the UK this is less of a focus. Here Rose also finds a greater focus on employment legislation and thus bigger HR departments. This means new employees have to get past both the MD and HR before entering employment. BEE is, of course, also an important factor in local recruitment.

Fabric also serves clients in Kenya via the Johannesburg office. In demand are brand managers for global firms such as the Unilevers of the world. Large agency groups such as Scangroup are helping establish increasingly sophisticated agency environments in Nairobi and other East African centres, says Rose. The PR sector in Kenya is also much more developed than many South Africans might think.

Fabrics’ USP is “simply that we provide access to both international and local talent”, explains Rose. “We work with all our clients on a consultative basis – we’d describe ourselves as an international recruitment consultancy. What this means is that we get to know our client’s business, their business strategy and objectives, as well as their internal culture.”

This focus on long-term relationships with clients results in “clients who return to Fabric when they move roles, clients who become candidates and candidates who become clients”, according to Rose.

Cape Town is certainly on Fabric’s radar, she says, and it has lots of great talent, but on the hiring front, things are quite quiet at the moment. An office there is around 18-24 months away. At a senior level, the much-talked-about pay gap between Johannesburg and Cape Town hasn’t been noticeable on her side.

As for the talent, mostly people are just looking for a job, preferably one where they won’t get shouted down. Rose, who also consults on HR issues, says companies can make employees work very hard, especially since advertising is such a deadline driven industry. But little tokens of appreciation can go a long way to building up goodwill amongst staff.

In London, she recommended companies give staff the day off on their birthdays (and not deducting it from their annual leave), and some firms offered staff several ‘duvet days’ – when getting up is more than a staffer can face – or when lying in just proves too tempting (provided, of course, they

Read the full story on BizCommunity.

Finding Cape Town’s Design Voice

Can Cape Town become to Johannesburg what Austin is to Dallas, Barcelona is to Madrid or San Francisco is to LosbAngeles – not as big, not as industrial but certainly more creative, entrepreneurial and tech-centric? Gavin Levinsohn, CEO of Ogilvy Cape Town asks the question, but already it seems rhetorical.

As industry moves to Johannesburg, the importance of KwaZulu-Natal’s ports of Durban and Richards Bay continue to grow and rich agricultural land disappears beneath golf developments and security estates, the city is recognising the need to diversify its economy, and to build an alternate image that not only foreign tourists can relate to but for locals as well.

The city has identified a number of ‘priority sectors.’ The usual suspects are all there including business process outsourcing (BPO), oil & gas, boatbuilding, renewable energy and tourism. But add to that ‘creative industries’ and ICT, Cape Town’s broader creative industries sees reason for optimism.

With ‘creative industries’ Cape Town takes a very broad view – it includes film, crafts, music, performing arts, visual arts industries and cultural tourism. The film industry has traditionally been the main beneficiary of the city’s ‘creative focus’ but this might finally be changing.

And design pays, look no further than Design Indaba, which in 2010 contributed R232 million to the national GDP and helped to create over 900 jobs, according to The UCT Graduate School of Business, or the fact that Creative Cape Town identifies over 1 000 ‘creative enterprises’ just in Cape Town’s city centre alone.

The city already hosts the globally reckoned Design Indaba, the local ad and magazine industry awards in the Loeries and the MPASA PICA awards, the Toffie pop culture festival and a host of important cultural events including the Cape Town International Jazz festival. It’s also bidding for ‘World Design Capital’ status (and has been named one of three finalists) from International Council of Societies of Industrial Design – a partner of the International Design Alliance.

The challenge for Cape Town as a city now is delivery on the creative credentials it has been trumpeting.

Peet Pienaar is one of Cape Town’s creative treasures. Shifting from performance art to graphic design he straddles the world of art and commerce. Alongside business partner Hannerie Visser they run design studio, The President, with offices in Cape Town and Buenos Aires. Their Toffie pop culture festival runs in both cities.

Pienaar thinks the city, and country, should carefully consider its position in the world, and that instead of looking to Europe and the US, it should look to cities and countries in the Southern hemisphere for inspiration. Argentina and South Africa share post-colonial histories, face similar socio-economic problems and, says Pienaar, similar solutions.

For Pienaar Cape Town’s creative credentials falls flat right at the start. He believes initiatives around the Design Capital are just more advertising to attract tourists to the city rather than a genuine effort to transform the city into a creative and cultural city. While Buenos Aires
offers support to its version of Toffie, Cape Town doesn’t. Even the Argentinean ambassador offers more help locally than the city does.

Creative Cape Town, the private-public partnership behind much of the effort to establish a creative node in the city and host of its Design Capital bid, meanwhile, acts as doorman to the city and blocks the conversation with its representatives, says Pienaar.

Buenos Aires, which has been building its creative credentials in South America, converts unused industrial space into workshops for artists, artisans and entrepreneurs, adds Visser, and offers public spaces for free craft workshops. A free public education system sees design students trained by professional designers volunteering as teachers (the better your marks, the better and more high profile your teachers – how is that for study incentive!).

All this gives the city a sense of generosity – something Cape Town – for all its beauty – lacks. Buenos Aires also protects small business and artisans whereas Cape Town is filled with more and more malls resulting in less space for artisans and small business owners, adds Visser. “We are losing creative skills practiced for generations and our inspiration alongside it,” says Visser.

Pienaar is not the only critic of Cape Town’s creative and design credentials. Mike Abel, CEO of M&C Saatchi Abel, says through hosting events like Design Indaba the city “creates [only] the illusion of a thriving local creative industry.”

“Just because we believe there are many creative types lurking from Simonstown to Melkbos will not achieve anything,” says ninety9cent MD Andrew Brand. “What efforts are the film, photographic, digital, advertising, fine art and performance industries making to align themselves? What is the City of Cape Town doing to advance the cause? Without leadership, a focused agenda and a collective vision it will never happen.”

Godfrey Morley, managing director, Draftfcb Cape Town, says that while he agrees that the city seems to have established a reputation as a creative hub, he also asks “does Cape Town have the business on which this creativity can feed and grow going forward? I suspect not: the challenge therefore is how to empower the hub to successfully service this country’s economic powerhouse in Gauteng as well as the rest of the world.”

Creative Cape Town has created enormous hope and expectation around the city’s commitment to finding its design voice. It’s driving the establishment of The Fringe, Cape Town’s Innovation District, in the east of the city, and the city’s Design Capital bid. These high profile projects create the idea of a bustling city department headed by a design tsar championing the creative voice of Cape Town.

The reality differs quite starkly from this image. The Creative Cape Town programme is run by its co-ordinator, Zayd Minty, for the Cape Town Partnership – but he is one of two employed full time on the project.

For the initial phase of the city’s Design Capital bid he got R600 000. The Fringe has R1 million to finance research and communication. It’s at once a stark reminder of just where design lies in the cities list of priorities. Thankfully, it’s also offers a glimpse at how much one person can achieve and contribute in spite of limited resources. Imagine what the Cape Town advertising industry can do if it pulls together? Not to mention what it could do if it combined forces with others like the digital industry and the film industry.

Minty explains that his office simply doesn’t have the resources to engage with individual stakeholders in the creative industry, relying on network organisations like the Cape Film Commission and the Cape Town Fashion Council to drive communication and engagement.

It does go some way to explain the frustration of Pienaar and the broader ad industry on the lack of engagement from Creative Cape Town. On the other hand, adland hasn’t in place a body promoting the interest of Cape Town’s agencies (organisations like the Creative Circle and the ACA are nationally focussed) so the network organisation to drive the industries engagement with Creative Cape Town simply doesn’t exist.

Minty calls on the industry to pull its act together, to set up regional structures to drive their interests and to find ways to engage with the city and related industries. It echoes Pienaar and Vissers’ own views – if we don’t do it for ourselves, nobody else will.

Not only is there a lack of coherent engagement within the regional advertising industry, but also between the design and tech sectors of the local economy that can only put the city on the map globally through a joint effort.

Silicon Cape, an initiative to drive tech innovation and bring together start-ups and venture capitalists is doing great work on creating an environment conducive to establishing Cape Town as technological hub, but it’s not gaining particular attention from adland, even when adlands’ very future is intimately entwined with emerging technological platforms.

“It is a certainty that in today’s communication world, creativity powered by technology is the success model,” says Rob Stokes, Group CEO of Quirk eMarketing and Chairman of The Silicon Cape Initiative. “The starting point will always be the idea but how this idea is constituted must
change – the creators of the new ideas will need to be a collective of creative thinkers with an appreciation for what tech can do mixed up with true digital natives who can offer thinking around ‘how this thing could be built’.”

On the upside, the city is already playing on the global creative stage. Witness Ogilvy Cape Town launching Schweppes Malt into West Africa before beating Publicis Sydney and Mexico City to win the Schweppes Brand Campaign for Europe, Africa and the Gulf region. It then won a pitch against Publicis London to win the global account of the Abu Dhabi Tourism Authority. Lowe Bull also recently won a global Skip project from the Unilever stable.

Or Am I Collective, the illustration and animation agency and arguably Cape Town’s hottest creative export, which has just completed the Minute Maid TV commercial for the Chinese market and is finishing off a global version. They are also busy with a typographic execution for Snickers through BBDO Paris and just completed a job for Heinz in USA through their agents B&A.

As Charl Thom, MD of FoxP2 puts it, “The Cape is increasingly being recognised as a creative centre of excellence on the global stage. At FoxP2 we have never considered ourselves a ‘Cape Town’ agency, but rather a national/international agency based in the creative city of Cape Town.”

For all its best intentions, the City cannot lead Cape Town’s creative transformation or drive its international reputation as a design rich city. Cape Town is a creative city thanks to its many creative people. Now they have to stand up and stand together. And, those in the local ad industry need to organise and engage with associated industries and stakeholders. Only one question remains – captains of Cape Town’s adland – will you take up this challenge?

The story first appeared in the June 2011 edition of AdVantage Magazine.

Detergent Company Successfully Aligns Staff Member to Brand

Detergent brand BlitzIt is already enjoying returns on its internal brand alignment strategy, as evidenced by the recent ‘brand alignment’ of a BlitzIt staff member. John Doe reports…

Alicia Waggi, senior technical assistant in the BlitzIt IT department, has formally declared her love, respect and admiration for the BlitzIt brand, whilst simultaneously acknowledging profound synergies between her personal life and her work experiences at BlitzIt’s Bryanston headquarters.

Waggi’s formal declaration was greeted with cautious enthusiasm by the bathroom detergent brand’s HR director, Norma Simmons.

“We pride ourselves on the resonance of our brand values across all touch points and within the social and home lives of our employees,” said Simmons. “We thus welcome Alicia’s declaration.”

Clarification on the reserved nature of BlitzIt’s response to Waggi’s declaration has been provided by Waggi’s work colleagues. According to them, Waggi has at various times called the brand’s internal alignment drive, ‘neo capitalist fascism…’, a ‘barbarous violation of the constitutional protection of personal dignity…’, and ‘the worst crap I have ever had to endure.’

“She made no secret of how much she hated the brand stuff,” says one anonymous work friend. “Most people are sure that it was her who was sending brand liberation emails to everyone, but there was no proof. But at the last Christmas party she definitely called Norma ‘a facist yellow duck’, and, ‘lacky of the exploiters and BMW pigs.'”

Waggi’s statement (released to selected BlitzIt internal stakeholders and brand working groups) expressed in unequivocal and emotional terms her new found attachment to the BlitzIt brand.

Apart from declaring love and long term brand loyalty, Waggi’s statement also addressed the synergies between her life as a mother and a BlitzIt IT technician. In particular, Waggi expressed gratitude to her employers for fully unpacking the notion of the internal customer in a profound brand workshop session. The Waggi household has now adopted the BlitzIt pay off line (BlitzIt – every time) as a call to domestic arms, and reclassification of family members according to internal client status has generated unprecedented interest in the dish washing roster from the kidz segment (3 – 8 years old).

“I had no idea just how closely aligned my home life and my work life actually are,” Waggi’s statement reads. “Only once the BlitzIt pay off line really clicked – at a company workshop on the meaning of courage, destiny and customer-centric focus – did the picture become clear. It’s so obvious now. The way to a better life for everyone is to achieve true synergy between brand values and actions. And what better way than to have fully aligned my internal family brand with the internal BlitzIt brand?”

BlitzIt’s internal brand alignment programme was developed by strategic media agency CBA Ford Smith Jones Broadbent and Ndimande (CBA). “I think Alicia’s alignment with the BlitzIt brand values is important, tangible evidence of the efficacy of internal branding programmes,” comments Tomlin Harris, chief consultant on the project. “A lot of the time staff are simply not aware of how relevant to their daily lives the company brand is. A sustained internal brand programme can, as we have seen, rectify this quite quickly. This really does impact on the company bottom line – in this case internal IT clients will be serviced the BlitzIt way at all times, and that ‘brand delivery’ ultimately radiates out and impacts strongly on the end consumer. It’s a win-win situation.”

Work colleagues have, however, also pointed out that Waggi’s statement was released the day after a comprehensive BlitzIt business process re-engineering strategy (developed by CBA’s sister company, Hatchet Consulting) was announced, with a focus on streamlining the technology division, enhancing information flow through ‘non-people-intensive’ system upgrades and aligning performance assessments and salaries to demonstrable workplace actions around BlitzIt’s core set of brand values.

When asked for additional comment on her statement, Mrs Waggi asked this reporter to “please leave me alone to focus on my key client groups and engage effectively with all relevant role-players utilising the brand feedback and action template provided to me upon induction.”

— John Doe has enjoyed a long career as an executive assistant, working with a variety of major global brands in a clerical capacity. Long famed in the corporate sector for his legendary dictation skills, Doe has recently also gained acclaim for his incisive media journalism. Although queries have been raised as to the veracity of some of his information, Doe is adamant that he simply reports on media issues that he comes into contact with – his sources remain a closely guarded secret. Doe dismisses as ‘unsubstantiated’ and ‘possibly defamatory’ allegations that he is in fact one Andrew Miller of Unity Design.

A case for creative technology and technological creativity

Team Derrick, Myles Hoppe, Mark Stead and Livio Tronchin, asks how innovation, technology, creativity and an entrepreneurial spirit can come together to build a creative economy for Cape Town that is more than skin deep.

Building the proposition of Creative Cape Town is imperative to the city’s survival in business. The city is still fundamentally a fishing village/holiday destination and does lack the hard-working business, although the hard-working mentality certainly exists. In fact, from many people we know, we’ve heard that they work far harder and longer hours here than in Jo’burg.

So it’s important to create an angle to attract business. And obviously, this is a hugely desirable city to live in so it can definitely attract the best, most creative people, who will then, in turn, bring the business.

Thanks to the web, anyone or any city can stand on the global stage. But to gain the critical mass in order to penetrate the clutter on this global web stage is the challenge. And there’re a lot of creative people dumping a lot of stuff on the web every second, so creativity, per se, is not a competitive advantage.

The real angle for the future is creative technology and technological creativity; smart solutions to local problems thought about in the global context. This way we’ll be able to solve clients’ creative problems here at home, and have those solutions noticed in overseas markets so that they’ll want us to solve their problems at home, and so globally we’ll gain the reputation as creative problem solvers for anywhere.

Currently our creds in Cape Town are in fair shape creatively and in fair shape technologically too. But we still don’t talk to each other enough. You go to a 27 Dinner and it’s still mostly tech boffs, you go to DI and it’s still mostly creatives; as an example. Maybe the pool of business here is so small that we cling to what we have and can get, and we’re working so hard to bring in the money that we don’t have much time to interact unless the problem really calls for it. But when you start to proactively open up to other independent shops (tech to creative and creative to tech) the products of those interactions are so fruitful, you wonder why you didn’t do it before.

Collaboration is a real buzz word right now. But I do think it has the danger of having lots of lip service paid to it, unless we all concertedly put our money where our mouths are.

There are a lot of independents springing up trying all sorts of new things and business models to try and etch a new niche in the market. And that’s of course exactly what we’re doing. We’ve heard so many people say how this is really upping the competition for business in Cape Town. But really it should be seen as upping the ‘think pool’ of creatives and technologists to raise the bar and push things further.

– Find out more about Derrick.

The perils of the online discounting culture for your brands and business

I’m fascinated by the growth and proliferation of the on-line couponeers and discounters like Groupon, Catch of the Day and the like. “Everyone loves a deal” this we know, but what does it mean to brands, margin, customer trust and sustaining pricing models? Asks M&C Saatchi Abel boss Mike Abel.

I’m reminded of Barbara Woodhouse, the iconic 80’s dog-trainer – she of the high-pitched “Walkies” fame. Barbara used to say “a trained dog is a happy dog”. The same can be said of children – and sometimes, even adults. So, what are we being trained to do by these companies? Well, firstly to pay less, to wait for the sale, the cut-price, the special. In and amongst it all, creating a perception that normal prices are too high or put differently, I’m currently being ripped-off.

So, how do I suggest brands take advantage of these Discounters…

They have definite value in the following areas:

Product Trial and Sampling

Stock-clearance

Building a database

Cheap cheap on Amazon

Product Trial: If you want customers to buy your new “whatever” and if by significantly lowering the price (and risk) you can get a bigger initial uptake, then this can be a useful method. The key here is to flag it as an introductory offer or launch, to clearly state the normal price and to give a cut-off number or limited time period. Add a promotional element to it (more cross-selling opportunity?) that incentivises communication for data-capturing purposes. And then start building a “relationship” directly with these customers. Are they buying the jeans at half-price but you can sell them the new range of sweaters at full price? What other items do they like and what are the value drivers in your business you can credibly direct them towards? If they are coming to your restaurant or massage parlour off the discount, how are how building that relationship when they come in, how are you capturing their information, likes and dislikes then communicating directly thereafter?

Stock-clearance: Obvious, but a great way of getting rid of last season or over-priced dormant stock. But as per above, it’s not so much the what, but the how…Firstly, other customers have paid full price, so this can be potentially alienating. Like all traditional sales, it should be honestly flagged as a stock-clearance. People understand sales. But if they suspect the brand is now using a different distribution model to sell at a lower price and they’ve been stung at retail level, it can be very disconcerting and a turn-off. Also, clearing stock can be a great way of getting people into your brand. If they buy it, it means they like it – but just at a cheaper price. So how do you talk to them about other products or services you sell? How do you communicate a value-offering and get them to buy at traditional pricing levels. Again, are you getting the data?

Do you understand the need state driving the purchase? Would these customers be equally happy to buy it off your own website? Another question then is how strong is your current e-tail offering? Is convenience a key factor in driving this purchase as this has obvious implications for your marketing and distribution strategy? You are obviously paying these Couponeers fees or commissions for pushing your already discounted offering, so consider why exactly you may need them now and then become less reliant into the future. The truth is you’re further cutting your cut price through their channel and eroding value – both margin and brand equity.

Building a database: This should be a primary objective. Who is building and owning the data? As a brand, if you are participating in one of these distress-marketing jamborees, then you need the upside. Brands like Groupon etc. need the goods in order to sell. They need quality items at great prices to sustain themselves otherwise they’ll just become floggers of low-quality, unwanted goods – and will ultimately fizzle out. So, (other than highly lucrative data) quality stock is ultimately their only sustainable life-blood for site visits and trading – and this is where their smart clients need to strike a data deal. If you aren’t currently getting this, then right now, they are the only winners in the long term.

Lastly: There are certainly some products and services that lend themselves easily to this type of retail strategy (and it should be precisely that, a strategy, versus the current ad hoc survival tactic) and others I’d approach with extreme caution – unless it actually becomes their core route to market which in itself could be interesting for a mass producer.

The key category for caution would be cars. Automotive, especially in America, is likely to head into this territory – if it hasn’t already. What most car manufacturers and their marketers don’t know or wake up to, too late, is that you need a strong used-car brand in order to have a strong new car brand. A strong used-car brand is based on residual (resale) value i.e. how close to the purchase price am I getting when I sell it? When you purchase a car that has been discounted through a SALE, chances are that all buyers of that car at “full” retail will be hit equally hard by the discounted price….so it becomes an even greater hit for them when they sell. Trust erodes, scepticism sets in. The bad news for those buyers is that they are often then hostages to that brand as they won’t get a decent trade-in anywhere else so they are stuck with them. Not a happy marriage or a sustainable brand model.

In closing, if you go this route, there are definite advantages, but potentially greater disadvantages. Use the rough guide above to determine why and how best you are going to be doing this. Would love to hear of your successes…

For ads, at half-price – this week only, contact Mike…

Catch Mike’s blog here.

Data dreams come true

The last two weeks saw massive price cuts in mobile broadband data charges – but a few nightmares still lurk in our broadband bills, writes ARTHUR GOLDSTUCK .

The humble 3G modem that’s become an indispensable accessory to any laptop just got humbler.

Once upon a time, six years ago, it was a tool for the truly elite. With the cost of data then R50 per Megabyte (MB), it was a luxury item that only the wealthy or the desperate would use, and then only very sparingly.

After howls of outrage from the market, the networks “generously” announced a “98% price cut” – down to R2 per MB. In the last few years that price also started falling, mainly for customers of data bundles.

And, in the last two weeks, all four mobile networks announced massive cuts in the cost of various mobile broadband services. This comes more than nine months after Cell C announced their rock bottom pricing – which the rival networks initially dismissed as “unsustainable”.

Cell C priced their 5 Gigabyte (GB) service at R199 a month, including modem. That set the cost per MB at 4c, making the modem – valued at around R1000 – practically free. Telkom’s 8.ta network went one better in the last few weeks, announcing a “promotional” cost of R199 for a 10GB data bundle. That works out at 2c per Megabyte (MB) – although with no modem included.

MTN then chimed in with an uncapped service at R899 a month. In reality, it wasn’t uncapped, since only 10GB were offered at peak speed. However, after using it up, the customer could still get unlimited access at a much slower speed. At the top speed, that’s around 9c per MB. For the heavyweight user who doesn’t always want speed but always needs access, it was another sweet offer.

Finally, last week, Vodacom joined the fun with reductions in price and increases in capacity across most of their bundles. Their 3GB bundle now sells at R498 – the cost a couple of years ago of a 500MB bundle. That works out at 16c per MB, with an out-of-bundle rate of 50c.

Cell C responded instantly, announcing 10GB and 20GB bundles at R499 and R899 respectively – the latter in effect half the price of MTN’s latest offer. Excluding the modem, the packages work out at R333 and R666 respectively a month – or 3.3c per MB.

Vodacom remains the most expensive mobile broadband service in South Africa, but they also remain the biggest. In their quarterly results announcement this week, they revealed they now have 3-million data bundle customers.

Clearly, there has been no loss of appetite for using their services. Vodacom’s data revenue grew by 37.6% in the last quarter. But rather than justify high prices, this growth indicates how important mobile data access has become, and how much people are willing to pay for what has become an essential service.

This also highlights one little statistic that was not pointed out in the recent price cuts: for an ad hoc data user, not on a data bundle, the cost per MB remains R2 – and it hasn’t changed since 2005.

That’s not the worst of it. Should you go roaming with your 3G modem or use data on your phone outside South Africa, the cost rockets up: up to R140 per MB on MTN, and up to R125 on Vodacom. This means that the typical traveller making typical use of a phone or modem on a short overseas trip will come back to an extra bill of anywhere from R5 000 to R100 000. It’s all legal, but it is also all wrong.

So, while the networks start making our data dreams come true – and less than 20c per MB is a dream come true in this country – they also need to make the rest of our data nightmares go away.

* First published on Gadget. Arthur Goldstuck heads up the World Wide Worx market research organisation and is editor-in-chief of Gadget. You can follow him on Twitter on @art2gee

San Reddy to lead PR firm marcusbrewster

San Reddy, best known to South Africans as a former primetime news anchor on free-to-air channel e.tv, has been appointed MD of the public relations firm marcusbrewster effective 1 August 2011. He replaces Hein Kaiser, who left to launch his own agency, RedStar Communication.

Reddy will be based primarily in Johannesburg. He was headhunted for the position by a recruitment agency and re-joins the corporate world after a three-year stint as an independent communications consultant active in the SADC region, as well as West Africa.

Reddy says he looks forward to building on the tried-and-tested business success of marcusbrewster but hopes to broaden its scope of clients to include those active in aviation, defence, financial services, etc. He also aims to grow the firm’s African footprint in the SADC region and in West Africa.

Initially, this will involve servicing these markets via the Johannesburg office. Already, he says, Nigerian firms are making extensive use of South African-based PR agencies, and through having consulted to the Nigerian stock exchange, he has built up an influential network of contacts in Lagos that would benefit his new employer.

Angola, Mozambique, Malawi and Zambia are all on his radar. While these countries don’t have a strong PR sector, yet the market is already experiencing rapid growth, says Reddy.

Reddy says he also brings a collaborative approach to creativity to the firm and looks forward to delivering measurable campaign successes to clients.

The communication industry is rapidly evolving, thanks to the rise of social media, and Reddy identifies its influence as a major challenge for PR firms to respond to and engage with. Communication strategies no longer solely rely on traditional media and firms in his sector need to understand the value of digital media in communicating with consumers. Reddy admits that, while strides have been made in this direction, a lot of work still waits.

Consumers as collaborators in modern media excite him and he believes digital media holds great potential for firms willing to engage transparently with consumers and stakeholders. Consumers today hold business (and their PR agencies) to much higher standards than was the case a decade ago. Corporates can no longer afford to be caught on a communication back foot – and if they are built on sound principles, they won’t have anything to hide in any case, says Reddy.

According to Reddy, the past decade has seen a positive evolution in the quality of the talent acquired by PR firms, sometimes to the detriment of newsrooms, and he looks forward to helping expand the environment for nurturing young talent at marcusbrewster.

Apart from his well-known work at e.tv, Reddy was also Lagos bureau chief for CNBC Africa and worked as a broadcast journalist and/or presenter for 702 Eyewitness News, SAFM’s PM Live and M-Net SuperSport.

Reddy holds a BA honours degree in political science from the University of Cape Town and attended George Mason Law School (Virginia, US). He is also completing his final year M.Phil in future studies at Stellenbosch University Business School.

In a media release welcoming Reddy to the firm, chairman Marcus Brewster said “Reddy’s CV comes straight from central casting – it ticks all the boxes: corporate and crisis communication, reputation management, investor and financial journalism, media training, lobbying and public affairs, as well as consumer PR outreach. His not-so-little black book of media contacts bulges with virtually every news organisation in sub-Saharan Africa and he is extremely well-networked and -connected.”

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