Post-2010: what is in store for media owners?

Speaking last night, Wednesday, 2 June 2010, at the AMASA June forum at the Johannesburg Stock Exchange in Sandton, Botha pitied business owners for practising what he called 'blinding optimism'.

"Everyone got the idea that 2010 is a goal post where we could all go and score and make a lot of money," he said.

Adspend been dwindling

Official figures show that the FIFA World Cup's adspend has been dwindling since the US organised the competition in 1994. According to AC Nielsen figures, the FIFA World Cup adspend grew by 62% during US 1994. While France 1998 did not report, 2002 Korea-Japan's adspend decreased to 25% and 2006 Germany made only 5%.

"As time progresses, increase in adspend decreases," Botha noted. "There are many reasons for this," he said, citing the increasing costs of sponsorship and the clampdown on 'guerrilla' marketing.

It is believed that both MTN and FNB paid 'astronomical' amounts of money just to be associated with the 2010 FIFA World Cup. Reports said MTN paid R60 million and FNB forked out over R100 million.

"You know what? With nine days to go, I have not seen any amplification of their brand regarding this sponsorship."

Total adspend amounted to R36 billion in 2009, and Botha said the industry only got 15% of that amount, which he described as the biggest drop he has ever seen. "Yes, we are making money now but we have to guard against blind optimism. Retail and manufacturing have both picked up, but I firmly believe we are producing more and we are still selling less. Please be cautious."

Reject the mimic approach

Furthermore, he called on marketers to adopt what he called the 'run-and-hide' approach and the 'business as usual' approach and reject the mimic approach.

Now that the MTN and FNB of this world are splashing money on marketing aggressively, a lot of brands are not doing anything, just pulling back and waiting in the wings for the right time, when they will start doing it wisely, he said, explaining the run-and-hide approach.

The second approach, according to Botha, consists of 'life carries on'. "When the world cup goes away, life will return to normal and advertising won't stop and there will be a pick-up in many aspects. For the majority of us that is business as usual."

So, what will be in store for media owners in post-2010? Botha said: "Don't feel sorry for SABC after the world cup. It will suffer because most of its viewers will go somewhere as the ratings of Generations, which is the biggest crowd puller and money-making machine, will drop.

"Non-soccer lovers will go somewhere"

"As soccer takes centre stage, non-soccer lovers will go somewhere - perhaps towards e.tv and M-Net."

Billboards will get messy and messy and bigger and bigger during the world cup and after that will go quiet as they create more supply than demand, he predicted.

"Print, which in a precarious situation due to rising costs of production and paper, will continue to see its circulation shrink."

As for radio, it is becoming too expensive and turning from its role of supporting medium to fighting head-to-head with TV. "To do more, you will need more," he said.

In 2009, online advertising took just 2.89% of total adspend (R489 million) compared to 2.32% in 2008. "SA's online advertising is growing but if it stays in its current form, it will die in the near future as less and less people are clicking on ads.

"It is how you do it"

"So, should we say that digital media is overrated? Nope. It is how you do it that makes the difference.

Lastly, he said: "Choose a mobile campaign that works better."