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Marketers to take digital in-house at unprecedented rate
22 Feb 2018
For marketers, who've been very focused on budgets during the past 12 months, their expectations of their agency partners will continue to be high. Agencies are expected to be able to manage the marketers' smaller or tighter budgets. It is a real worry to marketers that agencies will struggle with this, as evidenced in the Scopen AgencyScope South Africa 2017 report. With our economy only growing a little, this focus will continue to persist in 2018.
Johanna McDowell. Image provided.
[Full disclosure: Scopen Global and Mazole Holdings (the company that owns IAS 100%) have formed a company in South Africa called Scopen Africa. Scopen Global holds the majority of the shares; Mazole is a minority shareholder. Johanna McDowell is a director of Scopen Africa, as is Cesar Vacchiano, global CEO of Scopen.]
While margins may well be growing tighter, agencies are being forced to look further afield for more business. I’ve noticed that many agencies, especially in Cape Town, have a number of international clients and can compete aggressively for business based on price and talent.
Digital
More and more marketers will handle more and more digital marketing in-house, I believe, not just because it’s more cost-efficient in some ways but also because they want to understand the role of digital more closely and believe that one of the barriers which they have is lack of knowledge. As the digital demands within and across the business grow, the percentage of dedicated digital marketers within the marketing department should increase from about 25% to 35% in the next 12 months.
ROI
The above trend directly links back to return on investment (ROI). This will also become a more and more important focus for both marketers and agencies. Marketers love digital marketing as they can see an immediate result, which links to consumer engagement and sales. This helps to prove the value of marketing and advertising. ROI will become more and more sophisticated over the next 12 months as the growth in digital channels continues to flourish.
Talent in agencies
All over the world, agencies talk about the shortage of skills and talent in the industry. Does this mean that advertising as an industry is becoming less attractive to potential recruits? Or are there too many other options? This will be debated at length here and globally for some time to come.
A shake up in media
Transparency is a big issue. It’s not necessarily being viewed as such here but I believe that SA will follow the rest of the global ad world and that marketers will be demanding far greater levels of transparency in media — especially with digital expenditure. Media-spend reporting and media audits will mushroom.
BEE and transformation
There is lots of talk about this issue and a number of transactions and transformation initiatives etc are in place across the industry. Partnerships will form in this area during the early part of 2018 — and some of these might be borne out of desperation or need. I hope that most of these will be borne rather from desire to partner and a willingness to share growth and economic transformation.
Durban
The coastal city of Durban in KwaZulu-Natal is seeing something of a resurgence in creativity and innovation among the local agencies. I think this will start to become more and more significant over the next 12 months.
About Johanna McDowell
MD of the Independent Agency Search and Selection Company (IAS), and partner in Scopen Africa, with a background that includes being on both the agency and the client side of the fence, Johanna McDowell is well-placed to offer commentary on marketing and advertising in the South African and international contexts. She built her career in marketing and advertising since 1974, holding directorship in both SA and British advertising agencies. She was MD of Grey Phillips Advertising in 1988.
