This is the finding of independent research commissioned by the SAARF board, aimed at providing the industry with objective benchmarks to serve as starting points in working towards possible solutions to address industry challenges.
SAARF CEO, Ettiene van den Berg, who was brought in at the end of 2013 to not only ensure that the Foundation fulfilled its mandate for 2014 but to also set it on a new course, explains that the research was conducted on behalf of the industry as a whole to find out their views and requirements for a research model in South Africa was in response to changes stemming from the resignation of theNational Association of Broadcasters (NAB) at the end of last year.
"The resignation had a significant impact on SAARF and its funding model and prompted the research body to initiate research into what the industry would like the mandate and strategic positioning of SAARF [to be] moving forward."
To engage its stakeholders, Johann Koster of Johann Koster Consulting was appointed by SAARF's board. Van den Berg says the consultation process entailed interviews with executives from 59 local organisations as well consulting a number of international organisations to gain insights on industry and research structures as well as funding mechanisms.
The report, which was released to Bizcommunity as an exclusive, found that while the vast majority of respondents in the report perceived SAARF as outdated, without a focus on the needs of the industry, no consensus around what to do with SAARF could be found.
It found that despite recent developments and strong views expressed by a number of stakeholders, the industry continues to lean towards having an industry body and that this sentiment was shared by the majority of media owners, although by a small margin.
"The sentiment is that what is needed is new and innovative thinking, and a fresh approach to media and marketing research and the industry expressed an appetite for change, with many stakeholders displaying a shift in views and opinions towards active participation and collective responsibility when it comes to... research in the local industry," Van den Berg quotes the report.
The local decision makers in the media and marketing industry did express that opinion that one centralised hub survey is imperative. It must be independent from any stakeholder grouping and be designed by reputable experts through industry consultation, with an open and freely available sampling frame that conforms to gold standard international norms.
He adds that at industry level, all components of the current AMPS are seen as important and individual groups deviate on the importance attributed to certain components.
On the question of contributing to funding, the report shows that 80% of marketers consulted are willing to contribute to joint industry research and 60% are willing to contribute to representative industry body.
Media agencies are willing to review agency fee structures to facilitate funding contributions and media owners are committed to continue funding research but within a set framework.The exploration of data sales and subscriptions were suggested as a possible revenue stream. In general, says Van den Berg, there is a desire to move beyond the current funding argument for the good of the industry.
When it came to funding mechanisms:
• 56% prefer a solution that involves funding derived from marketers, whether through levy collections by media agencies or direct payment.
• 72% of marketers prefer a solution that involves them contributing funds, with 39% prefer the levy system and 33% the direct payment system.
• 76% of media agencies agree that funding should be derived from marketers and 35% prefer the levy system, while 41% prefer the direct payment method.
• 23% of media agency respondents that elected the direct payment method are willing to implement a levy system, should their clients (marketers) require it.
When looking into international organisations and industry and research structures as well as funding mechanisms, the golden thread that seems to drive success across the various models is collaboration and cooperation. Countries that lack structure, collaboration and cooperation such as Finland and Ukraine are characterised by a lack of research or the dominance of a single stakeholder or interest group.
Van den Berg says it is not surprising that funding has proven to be the single biggest challenge faced in all of the countries examined. "Within the countries examined, with the exception of Asia, media owners contribute the vast majority of funding towards research and the levels at which media owners, media agencies and marketers contribute varies from country to country."
A generalisation of contributions suggests that on average, media owners contribute approximately 80%, whilst media agencies and marketers contribute 20%. Contributions are generally calculated as a percentage of net advertising revenue/spend.
The report states that in Multi JIC environments, there seems to be significant collaboration between JICs, especially where the integrity of inter-media and Hub Surveys are at stake. Collaboration and cooperation takes place on an industry level whilst competition is left to the enterprise level.
International organisations were also consulted to gain insights on industry and research structures as well as funding mechanisms. Van den Berg highlights comments from Johan Smit, Director of Media Consultancy Agencies (PMA), in this regard. "We believe that neither the minimal form of a SUPER JIC like in RSA (small board), nor the extensive form like in Belgium (huge board) will help the decision making process and keep the cost under control. We have by far not found the right solution and the current set up with different JICs working closer and closer together is not ideal either. We are still wasting resources, spend (too) much time coordinating and have to deal with perceived differences of interest."
The report has been handed over to SAARF, who will be presenting it to the industry stakeholders at workshops that will be held in Johannesburg (confirmed for 21 April), Cape Town and Durban towards the end of April.
