Adding value to the Ad Industry

In a utopian future world, most people will spend lots of time in front of their interactive televisions. When a product they like is advertised, they will press a button and that product will be delivered to them, and automatically paid for from their bank accounts. Following the search engine hypothesis, viewers of interactive TV (where the internet and television comes together) will also have the ability to choose what adverts they want to see (eg, family car ads, between this and that price range). Thus one will get more focused advertising and advertising agencies will probably be paid a commission on all sales. Only agencies who add value will get value in return, and only the best of the best will survive.

But how relevant is all of this future thinking for the ad industry in South Africa? How many decades are we still away from being a first world, high LSM, technology enabled society?

Let's first look at the three major movements in our industry during the last year or so:
Firstly, the lower end of our industry is suddenly cluttered with gazillions of small agencies, trying to postion themselves in one of more of the niches created by the new way of thinking. They might do washroom advertising; taxi advertising or just live off the scraps of schlep work that the bigger agencies are not prepared to deal with. This new explosion of SMMEs in our industry might also be a result of cheaper technologies (especially in graphic design), BEE (spawning new entrepreneurs), and a reduction in size of bigger agencies.

The second movement in our industry is the desire of advertisers to target the new black middleclass and fast growing centred LSMs.

The final factor is the cut in marketing budgets, forcing advertisers to move their business to companies with lower tariffs, and forcing all agencies to be more creative and scientific in their marketing approaches.

So, from an advertising agency point of view, the biggest new challenge is not "how can we sell our client's products?" but rather "how should we sell ourselves to our clients?" Of course most of the bigger agencies still live in a Never Land where they just do standard jobs for a fixed array of clients (being with them because of years of convenience), but even that word are being challenged.

So how appropriate and sellable is the "new media neutral/from the line/strategy is king" approach for our specific market conditions in South Africa?

Let us first look at the positives:

Now, the negatives:

The new approach says that the agency becomes a media partner, adding more value to the client than just advertising.

A small example of how this approach was damaging to our agency, could be helpful:
we wrote up a very tight and responsible strategy for our client, and (after our research) mentioned that for the strategy to work, the product needs to be on the shelves. The client subsequently did their own research, and found that they have a huge distribution problem. As a result of this the campaign was cancelled, and the marketing budget was channelled into fixing their distribution problems. Although we added value by protecting our client from a marketing disaster, we were not remunerated accordingly. As there is so much competition in the market, that is the kind of losses that smaller companies, such as ourselves, deal with on a regular basis.

So yes, there are positives and negatives to take from the new approach, but I believe that our specific challenge as the advertising industry in SA is not necessarily towards changing approaches within advertising, but rather to find ways to stimulate and assist a growing economy. The faster the economy grows, the more work there will be for all of us.