Strategic Marketing

Coherent. Credible. Courageous.

Issue 4 2011 • R46 (incl. vat)

OFFICIAL PUBLICATION OF THE

Cellular

marketing

wars

How the big four are battling it out Group buying Sales phenomenon or just a fad?

Banner advertising Is pay-per-click delivering the goods?

Out-of-home Not yet reaching its potential

Plus: Sarah Britten: The view from the loo • Matebello Motloung: Why I’m missing Lolly

contents Issue 4 2011

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26

coverfeatures 12

COVER STORY:

16

GROUP BUYING:

22

26

26

theregulars 4

8

IN SHORT:

24

OUT LOUD: South African outdoor advertising can vary from crass but brilliant, to bland or simply silly.

Matebello Motloung on why she still misses ‘strip club king’, Lolly Jackson

31

BOOK REVIEW:

Less than a year ago, online Group Buying was unknown in SA. Now there are more than 25 websites doing thousands of retail deals weekly.

Mike Simpson examines a sales phenomenon

Is banner advertising really worthwhile? Laurent Marty investigates whether pay-per-click is delivering the goods, or if we’re heading for an even less satisfactory business model

OUT-OF-HOME MEDIA:

Interesting and useful snippets from the wonderful – and sometimes weird – wide world of marketing

Wiki Brands is a useful book that pulls together much of the disparate thinking about social media and the customer-driven revolution, and distills it into a practical marketing guide

Despite boxing below its weight at present, outof-home media has the potential to substantially grow its market share, both locally and across the rest of the continent

56 Brought to you by the the IMM Institute of Marketing Management and Wag The Dog Publishers, Strategic Marketing reflects an unbiased perspective of local and international marketing trends and opinion without compromise, courageously and coherently.

IN MY OPINION: The advent of the CPA and a Consumer Council, plus growing pressure on media owner margins, may force advertising’s ‘referee’, the ASA, to close. Sandra Gordon speaks out

It’s a warzone out there, as the four big cellular networks battle it out for the hearts, minds and wallets of South African consumers. Duncan McLeod reports from the front line

ONLINE MARKETING:

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OFF THE PEG In our busy world there are few places where marketers can get a consumer’s full attention.

Sarah Britten says the smallest room of all looks to be an under-utilised opportunity Issue 4 2011

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thefeatures 32

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MARKETING IN AFRICA: Can premium First World brands that deliver on intellectual and emotional values hope to work in African markets? Anthony Swart looks at how brand values on the continent are evolving

RESEARCH: Socio-economic forces, mostly related to the aftermath of the recession, have caused seismic shifts in the local market, according to a new study. Paul Egan summarises the findings

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ON THE UP: Founder of her own consultancy at 24; chair of the KZN Youth Chamber of Commerce and vicechair of the KZN Businesswomen’s Association.

We speak to high-flier, Nobuntu Webster

HOT OFF THE PRESS: For CMOs, wielding power in the boardroom is about more than just experience and expertise.

Nicola Kleyn analyses new research on marketing’s place at the boardroom table

GLOBAL VILLAGE: “Where’s Mali?” is the puzzled response of most South Africans. But this little-known African nation is attracting major investment from our shores, reports Gillian Jones

LANDMARKS: As the world’s best-known brand celebrates its 125th anniversary and 73 years in South Africa, Coca-Cola wants to continue to grow its presence here and on the rest of the continent

strategicmarketing Issue 4 2011

Next issue: The business of branding South Africa • Market research • Public relations

Issue 4 2011

strategicmarketing

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inmyopinion informed insight infront

Do we really need an advertising authority?

The advent of the Consumer Protection Act and a Consumer Council, plus growing pressure on media owner margins, may force advertising’s long-standing ‘referee’, the ASA, to close. Sandra Gordon considers the scenario.

T

he Advertising Standards Authority (ASA) has existed for over 20 years. Initially run on a shoe-string budget, it was started as a body to ensure that advertisers stuck to a code that, on the one hand protected consumers from unscrupulous messaging and, on the other, censured advertisers who fell foul of what is loosely defined as ‘good and proper’ advertising.

What it has become, though, is an association used all-too-frequently by marketers to settle claims of unfair and/or misleading advertising against competitors, settle business scores, or simply to disrupt the campaigns of business rivals.

The ASA is financed via a levy which was set up to support the South African Advertising Research Foundation (whose mandate is to provide credible and unbiased research to the industry), but which was then used as a vehicle to assist the ASA when it was clear it could no longer support itself.

Consumerism takes hold But recently the thorny issue of the sustainability of both bodies has come under the microscope as advertising levels decrease and media owner margins come under pressure. Going hand-in-hand with this, is the reality that a rising number of consumer and competitor complaints have increased the ASA’s workload and hence running costs.

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another, and created an environment that justifiably gave rise to associations such as the ASA. Enter the Consumer Council which, under the present government, would step in and take over the function of adjudicating complaints of all kinds from the public, thus diminishing the need for an ASA

Marketers should pay up

Sandra Gordon is the CEO of the Iconic Group of companies, which includes several print and online publications covering the marketing and media industries.

She has wide experience in media, marketing, advertising and public relations, and has served on numerous industry bodies.

The old guard within the advertising and marketing fraternity believes that if the ASA was not around to protect consumers from errant advertisers, then the government would be only too ready to step in and take over this function. But would it? I have seen no political posturing in this quarter, no claims of a shut down and draconian laws to prevent one of the pillars of democracy from toppling.

Such behaviour would smack of the old South Africa where everything was protected and controlled in one way or

So what is left for the ASA once consumer complaints are re-directed to the council? To handle squabbles between marketers at reduced fees (when compared with the average court of law)?

To my thinking any marketer worth their salt would, when taking a cheeky advertising gap knowing that they will be challenged by competitors, build in the cost of consulting with attorneys and attending court proceedings.

It’s simply unreasonable to expect media owners to contribute to the running costs of the ASA at a time when they are losing income, and when it is their advertising campaigns that are being withdrawn at the behest of the ASA … or when their funds are being used as a way to settle squabbles between business rivals.

(The recent high-profile spats between Vodacom, MTN and Cell C being just such an example).

Creating risky advertising carries a cost and this should be shouldered by the marketer, not the piggy-in-themiddle media owner.

Glamorous and exciting, airports are a showcase of South Africa’s finest brands. Airport Media, in conjunction with ACSA, are mixing it up with an innovative approach that will transport your branding at the airport to a magical new dimension.

Airport Media positions itself as a one-stop magical media shop, by offering advertisers customised solutions in the form of bespoke campaigns, rather than a “traditional holding” of “fixed” advertising options, Airport Media lives up to its well-deserved maverick reputation.

Bedazzle and bewitch your audience with face to face interaction, wraps and screening, beautiful new light boxes, terminal domination, lifts and escalators, lounges and boarding gates.

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You can be wherever you want to be and everywhere with Airport Media. Spellbinding!

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editorial EDITOR Mike Simpson editor@strategicmarketing.co.za EDITORIAL ADVISORY BOARD Santie Botha, Given Mkhari, Ivan Moroke, Prof. Johan Strydom ADVERTISING Linda Matticks l 011 447 4769 linda@wagthedog.co.za SUBSCRIPTIONS accounts@wagthedog.co.za Subscriptions: R480 for 12 issues DESIGN AND LAYOUT Ideaology Advertising and Design Art Director: Martin Hiller 011 447 5638 PUBLISHED BY Wag the Dog 243 Jan Smuts Avenue Cnr 12th Avenue Parktown North Johannesburg 2198 Telephone 011 447 7740 Fax 011 447 6179 Publisher: Sandra Gordon Managing Director: Ronéll Buitenbos IMM Institute Managing director: Nigel Tattersall Academic director: Helen McIntee Head of Marketing: Wendy Sweetman CONTACT DETAILS Atlas Studios 33 Frost Avenue (Cnr Owl Street) Braamfontein Werf, Johannesburg PO Box 91820, Auckland Park 2006 Telephone 011 628 2000 Fax 011 726 4505 email: imm@immgsm.ac.za

Illuminate while you eliminate Economic downturns, fluctuations in currencies and unforeseen acts of God continue to challenge global business growth. Customer behaviour is unpredictable and changing in front of our eyes.

Business benchmarks and marketing models that we relied on have to be reworked – urgently!

No doubt, then, you will be placing heavy emphasis on the need for research. Who is your customer, how has their behaviour changed and what impact will these changes have on your brand positioning, messaging, product, price and promotional strategy?

In such times, remember the wise words of David Ogilvy (Scottish-born military intelligence officer and later top advertising executive, 1911-1999): “I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination”.

Change of any kind is an opportunity for new markets and increased market share. While your

strategy is in ‘defrost’ mode, take the time to mould it, move things around a bit, implement new technologies and smarter ways of working and eliminate strategies that don’t work. Use research to facilitate this process, but please don’t forget about the ‘illumination’ in your strategies and plans.

The IMM Group is doing just this and, with the recent re-launch of the Institute of Marketing Management (IMM) and the coming together of great marketing minds across Africa through the formation of the African Marketing Confederation (AMC), we can tell you that marketing is alive and well.

Our plan is to create the biggest network of marketers on the continent, with the objective of sharing knowledge. Make sure you join in by visiting www.institute.co.za.

Enjoy, Nigel Tattersall Helen McIntee Wendy Sweetman

The quick and the dead DISTRIBUTION Distributed via selected CNA outlets and to a personalised mailing list made up of members, alumni and students of the IMM Institute, IMM GSM and IMM Postgraduate School of Business Science, the Marketing Excellence Awards Council, Chartered Marketers of South Africa and a select list of influential marketers and business people.

IN ASSOCIATION WITH

I read recently that the average tenure for a chief marketing officer in the United States is around 18 months. In other words, he or she has barely had time to get their feet under the desk and work out where the coffee machine is – before being on their way again.

There are obviously many reasons for this, not least the ongoing difficult financial environment, which means that sales are slow, wallets tight and customers disinterested in the long-suffering CMO’s products or services.

But (to echo the thoughts of my IMM colleagues above) I wouldn’t be surprised if another factor is the dramatic pace at which marketing is changing.

Quite simply, the strategies and tactics that worked for a particular CMO six months ago can be dead as a dodo today, courtesy of consumer attitudes and communication technologies that change faster than

a soccer coach at Orlando Pirates.

Group Buying (see our feature on pg 16 -20) is just such an example. Late last year only a handful of SA consumers had heard of the concept, much less used it as a means of purchasing things. Yet today the local Group Buying scene has exploded, with seemingly deep-pocketed new entrants coming in on an almost daily basis.

Will the concept ultimately be a game-changer for marketers and retailers? Only time will tell, but it emphasises just how important – and difficult – it is for marketing executives to be on top of things in this rapidly changing environment. Take your eye off the ball, or have an inflexible 12-month strategy, and you risk losing out to a more adaptable and fast-thinking rival.

Mike Simpson, Editor

nshort

Trends, markets, masters and musings – in the spotlight and under scrutiny

Supermarkets tops for rewarding customer loyalty

The British think supermarkets are best at encouraging customer loyalty

Supermarkets are tops when it comes to rewarding their loyal customers – at least according to the British.

Recent research shows that threequarters of all UK shoppers believe supermarkets are either ‘good’ or ‘very good’ at encouraging clients to be loyal, either via financial reward or better service.

The supermarkets’ next nearest rivals were mobile phone providers, with 36% of people rating them as ‘good’ or ‘very good’ at rewarding loyal customers, while around 33% said the same of coffee shops and restaurants.

Meanwhile, just a fifth (20%) of

consumers felt that banks were good or very good at rewarding customer loyalty, while this dropped to 14% for credit card companies.

Toby Clark, senior financial analyst at Mintel, the company which carried out the research, says: “Supermarkets are, by a very long way, the firms which are most likely to be seen as being good at rewarding their loyal customers. In fact, five times more consumers rate supermarkets as being ‘good or very good’ compared to credit card companies.

“In a fairly damning indictment for the (British) financial services industry, banks, insurers and credit card companies were eighth, ninth and tenth out of the 10 types of business sectors listed.”

Clark says the research pointed towards a fundamental mismatch between consumers and the firms serving them. “On the whole, bank loyalty bonuses are based on product holdings. Firms offer discounts when customers take out new products, or offer exclusive deals to customers with existing, high-value accounts.

Yet consumers, on the other hand, overwhelmingly see loyalty as being about length of service and not product holdings.”

The four second sale Sales professionals know that pressuring customers into making quick decisions can sometimes be an effective sales tool. Indeed, the Group Buying concept (see feature on pages 16 -20) operates on a similar principle.

But now a new Swedish website called Speedsale has taken things to a whole new level. Visitors to the site have just four seconds to decide if they want the product

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on offer, before it disappears from the screen – and the offer is gone forever.

Speedsale – which is available in English as well as the Swedish language – offers discounted books, DVDs and the like. Before entering the main site, visitors are given two options: “I’m ready to shop – let’s do this”; or “No thanks – I’m old and slow”.

Source: www.trendwatching.com

IMM The first of an occasional ‘pen picture’ of successful IMM GSM graduates and where they are now

Do it right “Studying with the IMM gave me a solid foundation and a structure to participate in the competitive world of business” says Gavin La Marque, Restaurateur owner of the Gavin La popular Safari Club Marque: stay focused and restaurant in the chase your dreams small, but growing, town of Hoedspruit in Limpopo.

For the second year running, the Safari Club has been listed in the prestigious Eat Out magazine as one of the top 1001 restaurants in the country.

La Marque believes it’s important to do things right the first time. So when he decided he’d one day own his own business, he elected to equip himself with the right skills from the start and enrolled for an IMM Marketing Diploma.

“I realise that part of my success is the ability to stick to the basics, which I learned from studying subjects like principles of marketing and consumer behaviour,” he says. “There is no magic formula for success in business – rather it’s about staying focused, sticking to the basics and doing things right.”

He admits that distance learning was a challenge, with time management and self discipline being difficult to achieve in isolation – especially when he also had to deal with everyday work pressures and the strain of a young man’s social life!

But, says La Marque, if you stay focused on your goal, keep your competitive edge and chase your dreams – it is all worth it.

Apple is most valuable brand Registering a remarkable 84% increase in value over the past year, Apple has emerged as the most valuable brand in the world, according to the sixth annual BrandZ Top 100 Most Valuable Global Brands study. In doing so, Apple ended the four-year reign of Google at the top of the table.

The Apple brand, as calculated by global marketing consulting firm, Millward Brown Optimor, has thus increased in value by 859% since 2006 and now stands valued at $153.3-billion.

IBM was ranked third in the 2011 survey, McDonald’s fourth, and Microsoft fifth. This means that four out of the top five places are occupied by IT-based brands. Coca-Cola is the sixth most valuable global brand, according to the study.

Technology brands now make up one-third of the Top 100 and continue to demonstrate their relevance in consumers’ daily lives. Facebook made its debut this year at No. 35 with the highest overall increase in brand value (246%), making it worth $19.1-billion. Online retailer Amazon also edged past Walmart to become the number one retail brand

and 14th overall, with a 37% rise in brand value to $37.6-billion.

Other key findings in the study are that, during the economic upturn of the last year, the combined value of all the brands in the top 100 rose by 17% to be worth $2.4-trillion. In terms of geography, 19 of the Top 100 brands now originate in ‘BRIC’ markets (Brazil, Russia, India, China), versus only two in 2006.

This year, 19 brands come from emerging markets compared to two in 2006 and 13 in 2010. The growing presence highlights the expanding purchasing power of people in these countries, say the authors of the study.

While many of these brands were buoyed by the size of their local customer base, many more also now have international ambitions.

The Most Valuable Global Brands 2011 Rank

Brand

Value in $ billion

Brand value change from 2010

1

Apple

153 285

+84%

2

Google

111 498

-2%

3

IBM

100 849

+17%

4

Mcdonald’s

81 016

+23%

5

Mircosoft

78 243

+2%

6

Cola-Cola*

73 752

+8%

7

at&t

69 916

-

8

Marlboro

67 522

+18%

9

China Mobile

57 326

+9%

10

GE

50 318

+12%

*The Brand Value of Coca-Cola includes Lites, Diets and Zero

You may not see us, but we can hear you.

Local radio specialists in South Africa, Botswana, Lesotho, Swaziland & Namibia.

Tel: 0861 372 346 or sales@themediaconnection.co.za

nshort

Trends, markets, masters and musings – in the spotlight and under scrutiny

We all live in a branded house

Nestlé was the Overall winner of the 2011 OH! Awards for out-of-home media. Its Kit Kat ‘bench’ advertisement also won the Street Furniture category. The judges said the campaign was “a simple yet effective creative idea” that underlined the core positioning of ‘Take a break, have a Kit Kat’. See our Out-of-Home Media feature on pg 24-30).

Furniture brand roars at Cannes International home furnishing retail company, Ikea, has been named as the winner of the 2011 Advertiser of the Year Award at Cannes Lions International Festival of Creativity held in late June. The festival bills itself as the world’s largest annual awards celebrating creativity in advertising and communications “Ikea’s approach to its marketing and communications, with its decentralised structure and strong relationships with many different kinds of agencies, has been hugely successful over many years,” says Philip Thomas, Cannes Lions CEO. “The company’s superb track record at Cannes reveals a clarity of vision and an enviable willingness to allow its agencies to truly flex their creative muscles.”

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The judges said that, working with a number of different agencies, the furniture company had encouraged creative, unconventional and humorous advertising to raise awareness of its brand and drive people to enter its many stores across the globe.

“Maintaining its marketing strategy, which is based around the business idea of offering a wide range of well designed, functional home furnishing products at prices so low that as many people as possible can afford them, Ikea has had the ability to localise its global target market,” the judges said.

“The company creates advertising campaigns that vary significantly across territories, as it adapts to the unique marketing conditions and cultural sensibilities of each country.

We wear branded clothing, travel in branded buses and taxis, and go to work in offices adorned in ‘building wrap’ advertising. So why not live in Branded Homes?

That’s the premise behind a recently-opened American company called Adzookie, which aims to turn suburban homes into giant advertising billboards.

To be eligible, homes must be owned by the consumer (not rented or leased) and the homeowner must also agree to leave their property in its advertising-emblazoned state for at least three months, extendable for up to a year.

When those requirements are met, Adzookie will paint the entire structure – minus the roof, windows and any awnings – and agrees to pay the homeowner’s mortgage for as long as the home remains as a giant billboard. If for any reason the owner decides to cancel after three months – or if Adzookie cancels the agreement – it undertakes to return the house to its original colour scheme.

Source: www.springwise.com

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marketingstrategy

Brand under reconstruction: Vodacom’s marketing strategy has been in the spotlight as it re-brands to Vodafone’s ‘red’ livery

Cellphone marketing wars It’s a warzone out there, as the cellular networks battle it out for the hearts and minds of South African consumers. Duncan McLeod reports from the front line.

S

outh Africa’s telecommunications users have never had it so good.

Since the third quarter of 2010, SA’s four mobile operators have been engaged in an increasingly aggressive marketing and price war that shows no sign of letting up.

The conflict has its genesis in two key developments. The first was Telkom’s

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decision to sell 15% of its 50% stake in SA’s largest mobile operator, Vodacom, to the UK’s Vodafone and to unbundle the remaining 35% of the stake to its shareholders.

Telkom sold Vodacom because it had little management control over the company and no chance of increasing its equity. Instead, it used some of the cash it generated from the sale to launch the country’s fourth mobile

operator, 8ta, which, despite a relatively slow start, is beginning to have an effect on the competitive dynamics of the sector.

The second decision, by long-time cellular minnow Cell C, to build a thirdgeneration mobile broadband network, which it launched in September 2010, has arguably had an even bigger impact than 8ta.

In a bid to improve its market

marketingstrategy

share and prove that it’s a force to be reckoned with, Cell C has launched aggressively priced data tariffs – and equally aggressive advertising campaigns – off the back of a fast roll-out of a new network. Its prices, especially introductory offers that have brought the lowest-ever mobile data rates to South Africa, have forced long-time rivals, MTN and Vodacom, to react with lower prices of their own.

In a short space of time, the South African mobile market has gone from a relatively cosy duopoly to one where four operators are duelling it out for market share in an industry that is fast maturing. And nowhere has the growing intensity of that competition been clearer than in the marketing skirmishes between Cell C and Vodacom.

Hardly a week goes by without one lodging a complaint against the other at the Advertising Standards Authority (ASA), the industry body that polices advertising standards and activities.

Cell C vs Vodacom Events took a decidedly nasty turn in April when Cell C launched an advertising campaign mocking Vodacom’s decision to rebrand to the ‘red’ corporate clothing of Vodafone.

Featuring comedian Trevor Noah, Cell C’s ‘CEO’ – or ‘chief experience officer’ – one of the ads shows Noah walking alongside an old sports car, half spraypainted in red.

“Recently, a 17-year-old cell network changed their colours. Nice, but what’s actually under the hood?” Noah asked viewers, before then being seen walking up to a new, black Ferrari. “It takes more than a lick of paint to be SA’s number one network, don’t you think?” the comedian asks.

Unsurprisingly, Vodacom saw red over Cell C’s campaign, lodging an urgent complaint at the ASA. The authority found mostly in favour of Vodacom and at the time of writing was considering

a request by the operator for sanctions against the smaller rival if it finds its “behaviour indicates a pattern of deliberate and/or flagrant abuse”.

Vodacom now wants the ASA to vet all of Cell C campaigns before they can be flighted.

The market has gone from a cosy duopoly to one where four operators are duelling it out for market share The dispute didn’t end at the ASA, however. Vodacom’s advertising agency, Draftfcb, accused its former executive creative director, Grant Jacobsen, of unethical behaviour over Cell C’s campaign. Draftfcb CEO John Dixon alleged Jacobsen, who had signed up Cell C as a client after joining rival agency DDB SA, of using confidential Vodacom information in Cell C’s ‘Ferrari’

campaign – a charge that Jacobsen vehemently denied.

Vodacom CEO Pieter Uys also entered the fray, accusing Cell C of misleading consumers. “We believe advertising should bear some resemblance to reality, and the Cell C campaign didn’t.

The issue here is with a company that has a track record of misleading consumers and repeatedly being censured by the ASA,” Uys said.

But Cell C’s flambouyant CEO, Lars Reichelt, hit back at Vodacom’s taunts, recently telling journalists at a media function in Port Elizabeth that he didn’t appreciate being called “a liar” over his company’s claims that its network could be considered “fourth generation”.

Though the skirmishes between Vodacom and Cell C are entertaining, it’s the tariff wars between the operators – especially in mobile data – where consumers are really benefiting.

In an effort to sign up customers to its new network, Cell C last September launched aggressively priced special deals that have forced its rivals to react, sending per-megabyte data charges to levels that Vodacom and MTN have To page 14

MTN boosted awareness with its multi-million rand World Cup sponsorship last year

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8ta’s aggressive pricing has forced the established operators to re-think their own strategies

suggested aren’t sustainable in the long term.

Both MTN and Vodacom have reacted to Cell C’s deals with low-cost products of their own. Bundles of 2GB of monthly data and a ‘free’ modem are available from all three operators for just R149/ month. Vodacom has even thrown in 2GB of additional data for subscribers who use its network late at night.

The impact of competition Now, Uys has hinted that Vodacom could cut its ‘general data tariffs’ – those outside special offers – in reaction to Cell C’s lower prices.

He admitted to the TechCentral website in May that “competition forces you to ensure you are competitive”.

“Two new competitors came into the market last year. One launched with a very attractive promotion. We didn’t follow initially, but there has been more and more pressure and questions asked [of us],” Uys said. If Vodacom cuts prices, MTN is almost certain to follow and this will set a new floor for mobile broadband tariffs.

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There’s no evidence yet that the escalating marketing and price wars have had much of an impact on the various operators’ market shares.

Vodacom still has about 50% of the market and MTN about 35%, though leaked data from the Number Portability Company – the organisation that manages a database of subscriber telephone numbers ported between the

All the operators are keen to demonstrate the perceived advantages that their networks offer networks – suggests that Cell C may have grown its market share slightly.

The big unknown is 8ta – Telkom was due to provide an update on mobile subscriber uptake after this

publication went to print, but talk in the market suggests it has signed up about 1-million customers, or about 2% of the market.

8ta has come to market with special deals of its own, perhaps the most interesting of which is that it offers its customers free airtime for calls they receive and low-cost calls to landline numbers. But it’s still too early to know what long-term impact 8ta will have on South Africa’s mobile sector.

All the operators are keen to demonstrate the perceived advantages that their networks offer. Cell C, for example, has made hay of the fact that it has built its mobile broadband network using spectrum in the 900MHz band, which it says provides “deeper and wider” coverage than the 2,1GHz used by its rivals. But its competitors have countered by building faster networks and expanding their coverage.

For now, the real battle has been over broadband pricing. Increasingly, though, there are signs that voice tariffs could be the next area to come under pressure. Calling rates in South Africa are still relatively high, especially when compared to some other African markets such as Kenya and Tanzania, where prices have fallen so far that industry regulators and governments are now fretting that this could discourage investment in new network infrastructure and minimise corporate tax receipts.

Price war and capital expenditure There’s no evidence yet that the price war is having any real impact on capital expenditure by the operators. All of SA’s operators are still investing billions of rand every year extending and improving their networks. Vodacom and MTN are both building their own high-speed fibre-optic lines to their base stations to minimise their reliance on Telkom for ‘backhaul services’ (typically fibre-optic lines that connect operators’ base

marketingstrategy

stations or telephone exchanges to their core networks) and Cell C has partnered with Dimension Data and Convergence Partners to create a new company, FibreCo, that plans to extend thousands of kilometres of fibre across the country in the next few years.

Investment in infrastructure has accelerated in recent years following a decision by former communications minister, the late Ivy Matsepe-Casaburri, to liberalise the market by allowing licensed operators to build their own infrastructure and ending a requirement that they buy infrastructure from Telkom.

Operators are now pouring money Lars Reichelt, flambouyant Cell C CEO into new submarine cable systems and winner of the AdReview Marketer of the Year and into national and metropolitan fibre networks. There’s unlikely to be Already, operators are eyeing any let-up in the spend, especially if next-generation mobile technologies the telecommunications regulator, the based on “long-term evolution” that Independent Communications Authority will eventually provide broadband of SA, is smart about how it opens up speeds far in excess of what’s new radio frequency spectrum bands possible on the copper-based fixed-line for new services. network operated by Telkom.

Uys said recently that the business model for far lower data prices makes sense, but only if operators build their own transmission infrastructure and continue to cut costs and improve efficiencies. It’s a view shared by Cell C’s Reichelt and MTN SA MD Karel Pienaar.

If anything, this war has just started.

Expect battles to continue to rage on many fronts; from pricing to advertising, branding, special offers, technology rollout and infrastructure development.

At the moment, the nice thing about this war is that it seems the often beleaguered consumer is winning, rather than being the first casualty of war.

Duncan McLeod is publisher and editor of technology news website, TechCentral. co.za. Before founding TechCentral in September 2009, McLeod was technology editor at the Financial Mail.

groupbuying

Online buying tidal wave breaks Less than a year ago the concept of online group buying was unknown in SA. Now, by some estimates, there are more than 25 websites doing thousands of retail deals a week. Mike Simpson investigates a sales phenomenon.

T

his morning I was offered a lunch for two people at a spectacular 70% discount off the standard retail price. Yesterday I could have had a weekend getaway marked down by 56%; the day before a full body massage for 65% less than I’d pay as a walk-in customer.

These are the kind of discounts you can only dream of in the markets of Marrakesh or the backstreets of Bombay. For South African consumers, ‘20% off’ is a good deal, ‘marked down by 70%’ is cause for a shopping frenzy and hours happily spent in till queues.

Now, in the online world, deals like this – or even better – are the norm.

And online-savvy South Africans, it appears, can’t get enough of them.

The brave new world of group buying is here, seemingly crashing onto our shores with the force of an e-commerce tidal wave. As we headed into Christmas 2010, only a select few consumers in this country had even heard of the concept (most likely from family and friends in certain overseas markets) and fewer still were engaging in it via maybe three or four modest local websites.

Now, depending on who you talk to, there are 25-30 local sites in operation (a number that’s probably already changed between the time of my writing this article and you reading it) with

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Jess Green of UbuntuDeal: group buying model can suit any size business

Google last year offered a whopping $6-billion for Groupon users collectively numbering in the hundreds of thousands and growing rapidly.

If you haven’t yet heard of group buying, you’re missing out. Google has – and late last year it offered a whopping $6-billion (R42-billion) for Groupon, the world’s oldest and

largest group buying site, which was founded in Chicago in November 2008.

Remarkably, Groupon said ‘no thanks’ and Google is now in the process of setting up its own group buying site, as is Facebook.

Meanwhile, in Australia, Yahoo spent $40-million (R280-million) to buy a site called Spreets last year. Spreets now boasts over half a million members and has done over 270 000 deals in a company lifetime of less than two years.

Closer to home, Groupon arrived on South African shores in January this year by purchasing two local sites, Mycitydeal and Twangoo, the latter of which was also being eyed by the giant Naspers media organisation.

Subsequently the Avusa group – owner

groupbuying of the Sunday Times, Business Day and Sowetan – has launched its own site called Zappon, while Bidorbuy (one of SA’s most popular websites with over a million unique visitors every month) bought the Ubuntudeal site in April – only six months after it was launched.

Then there are a host of other sites too: Collective Cow; YouDeal; CityMob; Dealio; Bangoo; and OneDayOnly, among others. There are now also several ‘aggregator’ sites which collate and display the daily deals offered across all the SA group buying sites.

Group buying concept So what’s group buying all about?

The concept is relatively simple: via a specialist website, a business offers a product or service at a heavily discount price and sets a deadline for acceptance of the offer and a minimum number of purchasers.

Once the required number of people take up the offer, the deal becomes ‘active’.

Visitors to the site (who are typically signed-up ‘members’) can then continue to purchase the deal until it expires or the maximum number of deals are sold. Vouchers confirming the sale are issued by the website to the buyer, who redeems it from the merchant.

The website earns its income by taking a percentage of each deal, which can vary from a few percent to a reported 50%, depending on the rules of the site and the nature of the deal.

Merchants who participate pay no costs other than the commission.

For the merchant, the benefit is brand exposure, bulk sales that can sometimes run into the thousands (Editor’s note: see sidebar article for examples of specific deals) and a ‘no sale – no charge’ policy. Consumers benefit by getting the product or service at a heavily discounted rate that is not available elsewhere.

“Group buying touches on the fundamentals of online behaviour, including group activity (in essence, it

There are currently an estimated 25-30 group buying sites in South Africa

is crowdsourcing purchasers for a product), social sharing (the more friends who buy the deal, the sooner it will be unlocked), immediacy (new exciting deals every day) and convenience (deals can be purchased instantly online, encouraging snap decisions),” observes Anna Malczyk of specialist online training firm, Get Smarter, in a recent blog on the entrepreneurial website, www.ideate.co.za.

“Whether group buying is a passing fad or here to stay, it has certainly captured the imagination of consumers and businesses alike.”

For small businesses only?

At present many of those are small businesses with limited marketing budgets. “If a business is doing very well and has a strong brand name, it probably doesn’t need to do discount deals. Generally it’s the smaller guys who need our help in getting bulk deals,” David Whitehead, a director of

Not a new concept Group buying, sometimes also known as collective buying, has its origins in China, where tuángòu (team buying) is used to persuade a retailer to offer a discount on a product in return for a mass purchase from a group of people.

Its popularity is said to be due in part to the Chinese tradition of bargaining when purchasing goods, as well as to the distrust of buying from an unknown and untried seller.

In South Africa, stokvels are a well established form of group buying in townships and rural areas. Members contribute to a central fund on a regular basis and each member takes it in turn to use the money to subsidise large purchases.

To page 18

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groupbuying What’s the deal?

How local website, Collective Cow, views the group buying process

website YouDeal (and a 2002 IMM GSM graduate) told Strategic Marketing.

Tara Turkington of Collective Cow, which is one of the longest-established group buying sites, concurs and says her clients are mainly smaller businesses. However, she believes much of the reason is that small companies are more flexible in their decision-making. “It has to do with the speed at which the business can make decisions,” she said in an interview.

“If we go to the salon on the corner, we can see the owner and make the deal in 10 minutes, but with the bigger companies it’s a much more complicated hierarchy. There’s also a higher risk of fraud; if we did a deal with Makro, for example, the system would have to be very highly organised to ensure a person doesn’t use a voucher more than once.”

But Jess Green, managing director of UbuntuDeal, believes the model can suit any company. “It’s good for any size business. For the small guys, though, it does have the advantage of also increasing their web presence,” he says.

For the moment, at least, certain

The South African market is vastly overtraded and due for a shakeout

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industry sectors are more prevalent than others. “A lot of our business is coming from theatres, action sports, hotels and the travel industry,” explains YouDeal’s Whitehead. “We’re also trying to put together package deals that include things like accommodation, meals, etc – that’s the way forward for us.”

Green agrees there are “a lot of spas and entertainment offers, but that’s simply because more people are interested in those kinds of things. Bear in mind that the deals you ultimately see on the website are not the only deals we’re being approached with,” he explains.

The following are examples of group buying deals available to South African consumers: • Breakfast or lunch for two people for R50. Discount of 70% (saving of R118) at Café Sofia (Johannesburg). 2 069 bought • Entry to Grand Designs Live Show for R32.

Discount of 60% (saving of R48) at Coca-Cola Dome (Johannesburg). 953 bought • Stress relief treatment for R294. Discount of 70% (saving of R686) at Shaya Moya Day Spa (Cape Town).

910 bought • Segway Tour of the Lion Park for R117.50. Discount of 50% (saving of R117.50) at Muldersdrift (Gauteng) Lion Park. 289 bought.

All the above examples were available at www.mycitydeal.co.za

Attracting the consumer With the market so highly competitive, group buying sites have to work hard to attract consumers to their sites and reach critical mass. After all, ‘getting eyes on the deal’ is what it’s all about.

For sites that are part of larger organisations, this may be a little easier.

UbuntuDeal, for example, will benefit from being linked to the busy Bidorbuy website. Similarly, Cape Town-based CitiMob was once a community-based group of Facebook pages with more than 120 000 members – which gives it access to a ready database of ‘friends’ and ‘members’.

Avusa is leveraging its newspaper readership base and several news websites to drive customers to its Zappon site. “From an advertising perspective, we definitely have a competitive advantage,” said Avusa’s Elan Lohmann at the time of the

Zappon launch in March. “Not only do our existing advertisers and suppliers inherently trust our brands, but we are currently offering (Zappon) clients massive media exposure to roughly two million readers a day via print, direct mail, website and social media channels – all at no charge. Which other group buying platform can offer (that) credibility and trust…?”

But some sites rely on other marketing strategies. YouDeal’s Whitehead says advertising via Google has yielded good results. “If you tap in ‘spa’, ‘hotel’, etc, our name appears. For every R1 we spend with Google we get about R1.50 back.”

Turkington says Collective Cow relies heavily on word-of-mouth. “We had some exposure on Talk Radio 702, which attracted hundreds of people, and thereafter we have found that good deals speak for themselves. On the day we offer

groupbuying a great deal we’ll see lots of people join our database and sign up to receive our e-mails.”

Growth of group buying offers in the US from first quarter of 2010 39 993

The future Is group buying here to stay, or is it just a fad? There is general agreement that the South African market is vastly overtraded and due for a shakeout among the current websites.

“Some will close down,” UbuntuDeal’s Green states emphatically. “It’s not the easiest way to make money, although it sometimes appears like that. You need a good offering, good service and a strong sales force to bring in the deals. You also need a lot of funds in the start-up phase.”

He warns that a shakeout could harm consumers and merchants. “What is important, for now, is to do the checks and balances necessary with any marketing service provider,” he wrote in a recent article on www.memeburn. com. “Would you advertise in a newspaper that you think will be out of business in two months? Would you buy a voucher from a site that may close down and no longer refund you?

“Similarly, marketing departments, PR professionals, businesses and customers need to sign up with group buying sites that not only have a solid team and good backing, but also provide a top quality online campaign which benefits the business offering the deal.”

However, the rapid acceptance and massive growth of the concept, both here and abroad, makes it unlikely that it will fade away anytime soon.

“For consumers and businesses, the pros far outweigh the cons,” observes Turkington. “Group buying is changing the way that we communicate in this country and how we do business.”

Mike Simpson is the Editor of Strategic Marketing. He has more than 25 years of experience in media, marketing and PR.

22 163 19 676

14 462

6 895 2010 1Q

2010 2Q

2010 3Q

2010 4Q

2011 1Q (E)

Source: Local Offer Network

Buying blitz in the Americas The group buying industry in the US is expected to grow by more than 138% this year, as American consumers rush to embrace this new form of e-commerce. While 2010 revenues sat at $1.1-billion (around R7.7-billion), the 2011 figure should reach $2.7-billion (approx.

R18.9-billion).

According to research by the Tech Crunch website, approximately 60 000 group buying deals were offered in the US in 2010 by over 300 individual sites. By the end of this year, the number of deals on offer is expected to rise to 160 000.

The number of new group buying sites also continues to increase at a remarkable rate. In the first quarter of this year alone, 117 new sites opened up. However, many of these are expected to fail, merge with other sites, or be bought out.

Food and drink is the most popular category with American group buying consumers and has a 27% share of the market. Other major categories are: beauty, spa and massage (19%); fitness and nutrition (7%); sports and recreation (5%) and home products and services (5%).

Meanwhile, a newly-published survey shows the Latin American group buying market is also growing rapidly after a slow start.

The study by comScore, a digital market research specialist, shows 11.6-million online users visited a group buying site in April. The equates to 10% of the entire online population of the region.

Brazilians were the most enthusiastic about the concept, with 16.1% of its online users visiting a group buying site. Next was Argentina with 13.9%.

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groupbuying

Beware the downsides Unsurprisingly, given its phenomenal rate of development, it’s not all sweetness and light in the garden of group buying.

A glance at online discussion forums and complaint websites like Hellopeter.com show numerous examples of consumers feeling they’ve received inadequate service or been ripped off. Even those within the industry believe that there’s room for improvement and caution the public and merchants to beware.

Jess Green of UbuntuDeal says the deal displayed is sometimes not the deal the consumer receives. He also warns that the percentage discount being reported is not necessarily the true discount on the retail price.

Tara Turkington of Collective Cow agrees. “Deals are sometimes exaggerated or simply not true. Or they may not be good value. So I’d advise consumers to always look critically at what’s being offered, because the deal may not be that special.”

Turkington claims some sites also buy mailing lists and then send unsolicited e-mails as a way of advertising deals to consumers. “To our mind, that’s a bit dodgy and we only want people who actually want to be on our database.”

She also questions whether all sites are secure, saying ready-made group buying templates and codes developed in China and India can be bought off the internet. “You can get these up and working pretty quickly and probably for under R100 000. But you don’t Make

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know where the code comes from or how secure it really is. Is the data from customers, like credit card details and addresses, being mined without you even knowing it?”

According to Turkington, the Collective Cow website and online payment mechanisms were developed in South Africa.

David Whitehead of YouDeal says he’s aware of instances where deals have been published without the merchant signing off the final copy.

“They (the websites) don’t send a mock-up to the business beforehand, resulting in the incorrect details being published. I know of a business that pulled out of a deal last week because they wouldn’t have been able to honour it,” he told Strategic Marketing.

“Also, some of the big guys charge huge commissions, so the merchant can’t make money out of it and the whole thing becomes just a marketing exercise. Group buying can be a win-win for everyone – the consumer, the business and the group buying site – as long as everyone plays the game ethically.”

A look at Hellopeter shows the following to be among the main complaints lodged by consumers: • Vouchers for paid-for products/ services not being received or taking a long time to be issued; • Slow refunds for deals that fail to ‘tip’ (reach the minimum number of sales); • Misleading information on deals, including not publishing all terms and conditions;

David Whitehead of YouDeal: Group buying can be a win-win for everyone

Tara Turkington of Collective Cow: questions whether all sites are secure

• Exaggerated discounts claims; • Deals cancelled but the purchaser not informed; • Purchaser unable to get a booking (eg: a spa or adventure activity) due to the high number of deals sold; • Difficulties with navigating and using the website.

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onlinemarketing

Conundrum of the ‘click’ Is banner advertising really worthwhile? Laurent Marty investigates whether pay-per-click is delivering the goods, or if we’re heading for an even less satisfactory pay-per-impression business model.

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uch has already been said about the growth of internet advertising over the last decade. Every year it steadily grows its share of the total advertising spend, and in the US online advertising spend crossed a symbolic threshold in December 2010 by overtaking spending on newspaper ads for the first time.

In South Africa, online spend remains limited, but the growth rate is equally fast. This media shift reflects a sociological shift: a growing number of people around the world spend more time online than they do on other media.

According to the IDC1, internet users were spending 32.7 hours per week online and about half as much time watching television (16.4 hours).

Individuals have carved out a new space in their lives, which can be measured in time, money, and attention span – and marketers are simply adjusting their spend and methods to this new reality.

The challenge for them is to gain a foothold in what is still an intimidating space, where the traditional categories of advertising no longer apply2.

In amongst these broad online categories, banner advertising is perhaps the least intimidating because it consists mainly of small-scale images such as web banners, which can be

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static or animated, as well as interactive media that may include audio and video elements. As an advertising technique, one could see banner advertising as just another category of traditional advertising, except that no one in traditional advertising has ever been briefed with the daunting task of developing tiny 3-by-4cm print or TV executions –and still be expected to ‘engage’ consumers.

And that is perhaps the whole paradox of banner advertising: it is the single fastest growing online media in the world within online digital platforms (+14% last year according to PWC3) and yet it must be the single most limited medium in the history of media. (We will see later that this intrinsic limitation of banner advertising is not only linked to evident format limitations, but owes much to the very type of mental activity that internet browsing entails).

“Who (the hell) clicks on internet banners?” is a question worth asking.

Personal experience will tell us: not me, not even once. In fact, something strange has happened over the years: the more banners have obstructed my field of vision, the more invisible they have seemed to become.

The trouble is that this empirical knowledge is at odds with actual figures. Banner advertising’s advantage is that it can be measured, and we know that people – in fact, many people – do click on banners, which media figures testify to. In fact, entire businesses have been built on it.

The mystery of banner advertising So banner advertising isn’t just an interesting paradox, it is a mystery. Alas, we have to come to terms with the fact that intuition and personal experience

onlinemarketing

are just not enough to validate an insight.

Or is it? In recent years, various research papers addressing the issue from different angles have started to confirm empirical experience. In a 2007 eye tracking research, online guru Jakob Nielsen revealed that users almost never look at anything that looks like a banner ad, whether or not it’s actually an ad. In the test, on hundreds of pages, users didn’t fixate on ads.

It is not surprising that in 2008, different research – ‘When Advertising Works’4 by the Futures Company – revealed that traditional media platforms outperform digital media platforms on nearly every measure. Traditional media platforms are higher-rated than digital media platforms on all key measures such as overall rating, relevance, recall, talkability, ads not being annoying and content enjoyment.

So, then, where does the much-hailed success of banner advertising come from? One has to assume that it has a lot to do with the business model it is based on: with pay-per-click (PPC) now being the most common business model (60% vs 35% for pay-per-impression, PPI5), advertisers only pay when their ad is clicked. This is tantamount to fishing in an ocean whenever and wherever one wishes to, and being charged only when one catches a fish.

And if marketers wait long enough, they know they will eventually catch something. There’s no risk for the advertiser, who is firmly in control of his

Eye tracking research in 2007 revealed that users almost never look at anything that looks like a banner ad advertising spend – something which is a fair arrangment for both media buyer and media seller. This is the great advantage of the platform, since marketers now know which of the 50% of their advertising works.

That is also why pay-per-impression may be meaningless for banner advertising; because it is based on the over-optimistic view that people will engage with the banner for each page they visit (a ‘page impression’).

Conclusion: forget about the medium, it’s the business model that grows banner advertising. It’s as simple and as definitive as that.

But that doesn’t solve our ‘whodunnit’: who clicks on banners, while you and your friends remain hopelessly and forever ‘banner-blind’? Are there large shoals of fish out there which bite at all times? Or, based on the fact that the ocean is vast, may one assume that there is always the odd fish that will eventually bite at the bait?

Recent research sheds fascinating

References: 1 International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Research published 2008.

2 The PwC research classifies Internet advertising formats into “search”, “classifieds & directories”, “lead generation”, “email” and “display advertising”, each of those categories having their own sub-categories.

3 PwC IAB Internet Advertising Revenue Report, 2010 First Half-Year Results 4 When Advertising Works - Executive Summary - The Futures Company - Yankelovich MONITOR Perspective, Q3 2008 5 PwC IAB Internet Advertising Revenue Report, 2010 First Half-Year Results

light on this issue. According to comScore, a global marketing research company focused on the internet, a mere 8 % of internet users account for 85 % of all ad clicks. This is a critical insight, because it means that what we are dealing with here is a case of ‘serial clickers’. And it indicates that the rest of us are out of reach. We are swimming in a sea of hooks and, subconsciously or not, we have become experts at dodging them.

In other words, a banner advertising strategy reaches a mere fraction of the potential audience. It does not mean that it is irrelevant, but it certainly suggests that it cannot be the be-all-and-end-all of an online advertising strategy.

The worrying part concerns the evolution of banner ads; according to the same research, the increase in the number of people that never click on ads went from 64% to 84%. This raises a strategic question for those, like Facebook, whose revenues are based mostly on display advertising.

If pay-per-click works less and less, pay-per-impression may be more viable for media sellers.

And if pay-per-impression comes back, then hard questions may be asked about whether banner advertising is worthwhile at all.

•This is the first of a two-part look at the topic of banner advertising. In our next issue, Laurent Marty discusses whether it is more a form of ‘banner retailing’ than ‘advertising’.

Laurent Marty is planning director and partner at Joe Public. He graduated from EMLYON Business School in France and Manchester Business School (MBA). He was sent by Renault in 1998 to develop the brand in SA. A French-South African, he is both marketer and advertiser and endeavours to think about marketing from different perspectives.

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Matebello Motloung is the former media and advertising writer for the Financial Mail and is the co-founder of Corporate Writers, a specialist writing agency. She’s worked for the likes of The Media magazine, SA Press Association, Sowetan and Marie Claire.

outloud

Missing Lolly Jackson South African outdoor advertising can vary from crass but brilliant, to bland or simply silly. Matebello Motloung takes her eyes off the road for long enough to hand out some bouquets and brickbats.

I

never thought I’d ever get to say this, but I miss the late strip club king, Lolly Jackson.

Yes, he was politically incorrect, crude and lacking in many things – particularly class. However, one thing about the erstwhile owner of Teazers is that he understood how to utilise outdoor advertising effectively.

The steady stream of customers to his clubs bore testimony to the effectiveness of his campaigns. If you were sitting in traffic anywhere in Greater Johannesburg and you saw one of his billboards, you were immediately entertained.

They were sometimes funny, often clever and frequently crass – but never boring! Feminists were outraged, women’s rights groups became incandescent with rage, virile young bucks loved them, Oomies visiting from Ventersdorp sneaked photos on their cellphone cameras to send to their drinking buddies back at the Royal

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Hotel. I mean, how many billboards have you seen that can inspire a heated debate over a few drinks or around the dinner table?

Yes, the self-styled ‘king of tease’ certainly also knew a thing or two about being ‘king of the billboards’.

It is such consumer insight, paired with a thorough understanding of the outdoor advertising platform that I, until now, thought separated amateurs from the well-experienced.

Along came Vodacom This is until the Vodacom rebranding campaign was unveiled.

I’ve been a great fan of the brand’s advertising over the years, but the current billboard campaign announcing its change of corporate colours left me speechless … and for all the wrong reasons.

Unimaginative, is the best way I can describe the promotional effort. For me, the campaign just lacks the trade mark ingredient – humour – that has made Vodacom’s advertisements among the most liked over the years.

And then there’s first time advertiser, Carfinder.co.za. There are few outdoor campaigns that have pushed me to the verge of drinking, but this one takes the cake. To grab commuters’ attention, the company decided to erect an inverted billboard announcing its services.

My first reaction was that this was a horrible mistake, and I almost called

How many billboards have you seen that can inspire heated debate? the company to alert them to the mishap … until I realised the sign was intentionally erected upside down.

Hell, I was annoyed! How anyone can think it is clever advertising is beyond me. I do understand that the aim of the campaign was to attract attention, but I believe that if the MD heard what consumers were saying about the campaign, he’d tear it down himself.

That said, there have been campaigns (other than those of Mr Jackson) that have made being stuck in traffic more bearable. The one that is arguably the reigning king of out-of-home media (depending on your taste of course) is the Allan Gray investment management campaign on the importance of long-term thinking.

Intelligent and insightful, it does justice to Allan Gray’s history, legacy and philosophy. Ad agency, King James, has consistently managed to capture all those aspects and to communicate them intelligently each time. Now that’s classic advertising.

But I still miss Lolly.

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out-of-homemedia

Opportunity knocks Out-of-home advertising has the potential to substantially grow its market share, both in South Africa and the rest of the continent.

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y 2014, out-of-home media (OOH) advertising in South Africa will total an estimated R2-billion, a 7.7% compound annual increase from R1.4-billion in 2009, according to PriceWaterhouseCooper’s South African entertainment and media outlook: 2010-2014.

OOH consists of formats such as billboards, street furniture (kiosks and bus shelters), transit displays (taxi wraps and bus sides), sports arena displays and ‘captive ad networks’ like the opportunities afforded along the lengthy escalator ride to the surface at the Sandton Gautrain station. Over the past decade, the industry’s growth surge has been dramatic and today the medium reaches most adult South Africans.

However, Melissa Moore of the Out-ofHome Media Association (OHMSA) cautions that the sector’s share of the

Melissa Moore of OHMSA

Jacques du Preez of Provantage: outof-home provides ‘forced exposure’

South African advertising pie seems to be declining and currently sits at a reported 4.2%, versus 5% five years ago.

The difficulty, though, is that this may not be a true reflection because many of the smaller out-of-home players are not OHMSA members and therefore do not report their figures.

Moore says she does expect the sector to expand, but won’t predict

growth figures because of the difficulty in pinning down the correct numbers.

“Digital outdoor options are a relatively new development and this technology has increased interest in OOH everywhere in the world where it is used – resulting in significant increases in its share of ad revenues. The same is expected to happen here,” she told Strategic Marketing.

“In addition, there has never been a widely-accepted audience measurement tool available – something on a par with those used for print, television or radio – for media planners to justify putting OOH on their schedules. However, if the proposed Out-of-Home Measurement Survey (currently out to tender and being evaluated and costed by the industry) becomes a reality, then the medium will take its rightful place alongside the other mainstream media and will be able to be evaluated against them.”

According to Moore, in Australia, the launch of MOVE (that country’s OOH audience measurement research programme) resulted in OOH’s share increasing 30% in the first year. “We do not anticipate an increase of that magnitude, but we do know that, when

Out-of-home now reaches some 85% of adult South Africans

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out-of-homemedia

media strategists can plan with the confidence that comes from having solid numbers to back up their decisions, the medium has a better chance of being selected by advertisers,” she explains.

Traditional media loses allure One man who is supremely excited about the industry’s future is Jacques du Preez of Provantage Out of Home Media.

“Out-of-home is the most sought-after media globally, because traditional media are more expensive and have become fragmented. TV viewers, for example, will flip channels on you but we (OOH) have forced exposure,” he says.

From a business perspective, South Africa and Africa offer huge opportunities, notes Du Preez. Not surprisingly, both Provantage and billboard giant Continental Outdoor Media are pushing north into Sub-Saharan Africa.

Continental already operates in 14 African nations and, while the company’s Lyn Jones admits each market contains different nuances, the basics are universal. “In other African countries outdoor advertising commands a slightly higher percentage of adspend than in SA,” she notes.

For now at least, Africa tends to be billboard driven, but as infrastructure improves across the continent so will opportunities to roll out exciting new campaigns – such as those on offer from digital OOH, the big focus abroad and exemplified by the rolling billboards of New York’s Times Square.

“In Botswana there’s an opportunity for taxi TV and Provantage will be taking First World opportunities like this into Botswana airport,” says Du Preez. “But we need to get it right in South Africa first and then copy the model and drive it north.”

Moore agrees that the continent has great potential for OOH. “Advertising in Africa is in a high-growth phase and advertising strategies that work elsewhere do not necessarily have the same impact or retention as they do in their own mature markets.

“TV is generally of poor quality and adverts often lose their impact because they are difficult to see or hear. High production costs and the lack of reliable electricity supplies also make TV an unreliable option,” she explains.

“Radio has very good reach, but is highly fragmented due to the multitude of different dialects. Print, though widely consumed, is reliant on literacy and distribution. As a result, out-of-home is growing in both urban and rural areas in Africa and provides reliable and consistent brand building opportunities.”

Cara Bouwer and Mike Simpson

Key industry trends What are the key trends that will impact on the out-of-home sector in coming years? Melissa Moore of OHMSA identifies what she believes are the four crucial factors.

• Mobility patterns. People of all ages and persuasions are out and about, moving, driving, travelling as never before. OOH is the only medium that does not have to be switched on, bought, activated or licensed for use before the advertising can be seen. The minute someone steps outside their home – the advertising is there; • Strong growth in the use of digital technology; • The introduction of a reliable and credible audience measurement tool; • More co-operation from within the industry in returning reliable ad revenue figures to AdEx (the monthly report which details ad revenues accruing to each media type) will result in the ‘share of voice’ for OOH being more realistically measured.

The inclusion of ‘ambient media’ (non-traditional mediums like messages on the backs of tickets, handles of trolleys, etc.) in this measurement will also have a positive impact.

Increased media fragmentation, shortened consumer attention spans, the need for ‘quick information hits’, and technological advances have all revitalised and re-energised the OOH category, Moore says.

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out-of-homemedia

Dangerous annoyance or value proposition?

Does the proliferation of billboards and signs along our highways and by-ways pose a threat to road safety – or is it a win-win for both marketers and consumers? Cara Bouwer reports.

W

hen attorney Melissa Moore took up the role earlier this year of executive director at Out-of-Home Media South Africa (OHMSA), the trade association representing the sector, one of her first moves was to implement an investigation into the regulations and by-laws governing the industry.

It’s a pertinent strategy which aims to keep out-of-home on the right side of regulators and ensure the continued growth of the sector. OHMSA, which represents some 85% of the out-of-home media (OOH) advertising spend in South Africa, has a strong presence and voice in the sector. “Open and frank debate between all industry stakeholders is crucial,” says Moore.

The move coincides with international research out of Monash University’s Accident Research Centre in Australia, which has again sounded the alarm over the possible distraction outdoor advertising signs and billboards pose for drivers.

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Billboards: a distraction for drivers, a blot on the landscape, or just good business?

But not everyone is so sure. “I think a cellphone is more of a distraction than a billboard,” says Jacques du Preez of Provantage Out-of-Home Media. Primedia Unlimited’s CEO, Ken Varejes, agrees: “One could argue that drivers also get distracted by radio, their cellphones, iPads, magazines or children in the car.”

International studies seem to back up these views, with the Virginia Tech Transportation Institute in the US reporting in 2004 that billboards didn’t significantly affect driver behaviour, even in the presence of “the most visually attention-getting billboards”. In 2001,

the AAA Foundation for Traffic Safety in America also concluded that items such as CB radios, billboards and temperature controls weren’t significant distractions.

Unfortunately, says Continental Outdoor Media marketing manager Lyn Jones, similar studies have not been undertaken in South Africa. But according to Du Preez, OHMSA is hoping to change that. “We need a national debate with government on regulations. We want a uniform, national policy for South Africa which will take regional, council and by-law issues out of play. We’re busy with that, but it will take time to get it right.”

out-of-homemedia

OHMSA is also engaging with the South African Advertising Research Foundation to benefit from comparable research to that enjoyed by other mediums, like TV. “We’re not getting fair value … but, that said, this is the first time we’ve actively engaging with them,” says Du Preez. Former OHMSA acting head, Barbara Cooke, is on board as a research specialist to drive the process.

Cape Town takes stand Until the industry galvanizes itself, campaigns like The City of Cape Town’s recent drive against out-sized posters and billboards – which are regarded as potentially “dangerous to life and property” – will continue.

Varejes admits that Cape Town, due to its natural attractions, is a unique example of environmental sensitivity to outdoor advertising. He believes players must work “extremely closely with councils to ensure all criteria are met”. That said, “by-laws can always be

improved and this is where companies such as ours continually engage with the decision-makers to understand the changing face of society and the creative solutions around this change.

We do believe antiquated laws need to be revisited”.

Until this national debate takes place, each outdoor advertising company will remain “directly responsible for the legislation pertaining to their sites and relationships with the relevant authorities”, explains Continental’s Jones.

It’s also left up to individual companies to uphold quality levels. “Our formats are only as good as the message,” says Jones. But if an outdoor campaign is compelling, creative and impactful, “research has proven that the addition of OOH within a campaign can add 20% to awareness, as well as contribute significantly to the bottom line”.

This is clearly the third area of focus – along with regulations and research – facing the industry. Here the challenge is

to inspire and educate creative directors and marketers to gain maximum impact from out-of-home. “OOH can reach consumers where other mediums may struggle, and can deliver top-ofmind awareness,” says Varejes, whose Wideopen Platform division recently made history by installing South Africa’s largest building wrap – of 7 623 square metres – around Sandton City.

With some 1.8-million cars passing that single site each day, the potential is self-evident. Now the industry needs to back up its enthusiasm with hard facts and a united front.

Cara Bouwer cut her journalism teeth in the early 1990s before an extended stint at Business Day newspaper. She left to take on the role of business editor at Destiny magazine before striking out on her own in 2009. Bouwer undertakes various freelance commissions and magazine editing projects for major corporate clients

out-of-homemedia

Global comeback on the cards

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Out-of-home media revenues in the United States over the past decade (2001 – 2010) $8 6.8

$7 $6 Billions

O

ut-of-home advertising revenue in two key global markets – the United States and United Kingdom – is on the rise.

Spend in the United States rose 4.2% in the first quarter of 2011 compared to the same period in 2010, signalling that out-of-home media is continuing to recover in what has been a troubled sector of the world’s biggest advertising marketplace.

According to an Outdoor Advertising Association of America (OAAA) report released in late May, US marketers invested $1.4-billion (over R9-billion) in out-of-home marketing activities in the first three months of this year. Hopes are now high that the total spend for the entire 2011 will exceed the $6.1-billion spent during 2010.

“The out of home industry saw positive growth in 2010 and steady increases continue this year,” said OAAA president Nancy Fletcher. “Optimism remains high throughout all sectors of the industry as business strengthens.”

Financial companies, media businesses and, perhaps surprisingly, colleges and universities were among the biggest spenders on outdoor media, she said.

But some senior industry players believe there’s still room for improvement. Ron Cooper, CEO of Clear Channel Outdoor, said at the OAAA’s recent annual conference that outdoor still only represented 5% of total media spending in the US and he hoped the sector would increase revenue by $1-billion (around R7-billion) over the next three years.

Nigel Morris, CEO of Aegis Media North America, agreed. “Out-of-home is significantly under-represented in the marketing mix and takes less share than it should,” he told delegates.

Morris urged those in the sector not

$5

5.2 5.2

5.5

5.8

6.3

7.3

7.0 5.9 6.1

$4 $3 $2 $1 0

01 02 03 04 05 06 07 08 09 10

Source: Outdoor Advertising Association of America

to view other advertising mediums as competitors, but rather to seek collaborations with them in order to grow the category.

“The whole point now is that everything is interrelated. The opportunity is to be part of a bigger conversation,” he said.

UK improves too In the United Kingdom, meanwhile, Outdoor Media Centre, the trade body for outdoor media owners, reports that 2010 revenue rose by 12.6% to 880-million pounds (around R9.7-billion).

“This puts outdoor right up with TV as one of the best performing media,” CEO, Mike Baker, said. “We have recovered significant ground from the 2008-2009 low point and are ambitious in terms of how much further we think we can go.”

Digital outdoor advertising showed notable growth, passing the 100-million pound mark (around R1.1-billion) for the first time. This gave digital a nearly 12% share of the market.

The biggest single outdoor advertiser in Britain last year was satellite broadcaster BSkyB, which spent 30-million pounds (around R330-million).

Meanwhile, MagnaGlobal, a media research company based in New York, predicts that worldwide spending on out-of-home advertising will expand by 8.3% in 2011 to about $26.4-billion (about R182-billion), faster growth than that seen for other non-internet forms of advertising.

Jean-Charles Decaux, head of France’s JCDecaux, which claims to be the largest out-of-home media company globally, says there will be a significant switch to digital, but mainly inside airports, railway stations, shopping malls and other controlled environments.

References http://www.outdoormediacentre.org.uk http://www.oaaa.org/ www.adage.com The Economist, April 12, 2011

Mike Simpson

bookreview

Brave new brand world Mike Simpson

U

Book:

Wiki Brands

Authors:

Sean Moffitt and Mike Dover

Price:

R224.00 (online).

R325.00 (book shop) Hardcover

Availability:

Exclusive Books

Publisher:

McGraw-Hill

Rating Application:

Consumer trends

Readabilty:

Medium

Target Readers

Marketers, businesspeople, trends analysts

Overall rating:

4.5 (5 = excellent; 1 = poor)

nless you’ve been hiding under a rock or ignoring media coverage for the past couple of years (not a good strategy for a marketer) then you’ll have heard all the buzzwords about ‘crowdsourcing’, ‘online groups’, ‘user-generated content’ etc.

Certainly, magazines, websites and blogs covering the marketing industry have been full of articles and advice on the social media revolution, the world of online, and how it is changing the way the business world works.

Some of the info we read is useful, a great deal is vague or complicated, and far too much is simply shameless promotion by self-styled ‘experts’ who know only marginally more than the client base that they’re trying to baffle with you-know-what.

Enter Wiki Brands, which has been a global publishing hit since it was released internationally at the end of last year. The ‘wiki’ concept (made famous by the online encyclopedia and the ‘leaks’ website) is all about collaboration and the idea that brands no longer belong to the business that founded them – but to everyone, and therefore evolve in accordance with consumer participation.

Authors Sean Moffit and Mike Dover have based their work in Wiki Brands on a $10-million (about R65-million) ongoing research study

by Don Tapscott, the Canadian academic, businessman and author of best-selling books like Wikinomics, Macro-wikinomics

and Grown Up Digital. The pair have analysed the data and taken hundreds of examples of how businesses large and small, both in the US and elsewhere, are using the internet and the social media revolution to build or re-engineer their brands and businesses.

The result is a book that can be slightly heavy-going at times, but steers clear of becoming an academic or theoretical work with limited practical benefit in day-today marketing. Instead, it discusses useful real-life examples of how active participation by a company’s customers (whether present or potential) can get brands endorsed or reinvented (or damaged) via the vast unseen mass of people who inhabit the world of the internet and social media.

“Sharing your brands may be the best way to grow them” is the core message.

However, the authors acknowledge that this change of mindset is a difficult one for businesses to come to grips with, and point out in the book that only 6% of corporate marketers (presumably in North America) are currently happy with their presence on the internet.

“The fight for wikibrands is real,” they write. “All across the world right now, there is a struggle being played out at all levels in the company between doing what is right for the customer and what is right for the company.”

Wiki Brands is a useful book that pulls together much of the disparate thinking on the subject and distills it into a useful and practical guide for the non-expert.

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Can brands self-actualise on the African continent?

Can premium First World brands that deliver on intellectual and emotional values hope to work in African markets? Anthony Swart ponders the point.

A

Mont Blanc pen which appeals to ideals of status and prestige may not enjoy the same success as Bic, which responds to basic needs of functionality and reliability. But that’s not to say the likes of Mont Blanc should write the continent off.

Indeed, African brands themselves are growing towards this ideal of self-actualisation (the ongoing quest to maximise your potential) which – as the master of motivational studies Abraham Maslow contends – is a process and not a goal.

The act of striving to fulfil your potential begins with fulfilling the most basic customer needs. Only then can your consumer – and your brand – advance to a higher level. The key is to understand what motivates a brand to ascend towards self-actualisation.

What motivates growth?

If Maslow had applied consumer needs to his celebrated model around the hierarchy of human needs, he probably would’ve explained it thus: At the bottom rung are a number of basic consumer needs that a brand must meet in order to exist. As you move steadily up the hierarchy, however, brands tend towards self-actualisation.

This is the case in highly developed markets where the brand has advanced up the scale from ‘deficiency needs’ (base requirements for functionality) to ‘growth needs’ – psychological and emotional needs.

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Branding problems encountered by banks in the developed world are different to those in the emerging economies like Nigeria

Growth forces, perhaps market-related or socio-economic, create upward movement in the hierarchy when lower tier needs are fulfilled. Let’s illustrate this point with the experience of banks in developed and emerging markets.

Branding problems encountered by

banks in the developed world are different to those in the emerging economies.

Due to lack of education, limited understanding of banking institutions and financial instruments, as well as the legacy of instability in the region,

marketinginafrica

there is historically an innate mistrust of banks in developing economies.

Whereas in the developed world, banks are more readily accepted because safety and stability are arguably a given and there is a tradition of retail service.

In developed markets, consumers are seeking differentiation factors that go beyond the now ‘hygiene factors’ (factors that prevent dissatisfaction only when present instead of increasing customer satisfaction) of safety, security and convenience. Indeed, these have now become commoditised.

In such mature economies, there is increasingly less space to play in and banks seek to differentiate from competitor offerings in the realm of the emotive. The happenings of the last few recessionary years may seem to belie this point, but there is still room for emotive differentiators in a largely intellectually-driven First World market.

Underdeveloped markets, however, offer greater potential for differentiation on functional factors that are more directly meaningful to customers. They are able to respond directly to a legacy of a lack of safety, for example, by espousing the safety measures they have put in place.

Nigeria’s Union Bank has traditionally positioned itself in the area of safety with the pay-off line of ‘Big, Strong, Reliable’ – appealing to one of the most basic needs of its customer base. But such a positioning would not hold its own against global brands operating in more developed economies.

Safety, stability and basic service therefore live on the bottom rung of the banking brands’ needs model.

However, recent structural changes throughout Africa’s financial sector have largely advanced brands onto the next level, as all the needs on the bottom tier are met. Instead, they must now service more sophisticated needs as their customer base becomes accustomed to a stable and competitive market.

As Maslow contends, as basic needs are met, there is a motivation to satisfy

Marketers targeting African consumers must understand how to map their brand’s position to a hierarchy of needs

The key is to understand what motivates a brand to ascend towards selfactualisation successively more advanced, or higher, needs that occupy a set hierarchy.

Often, this advancement is facilitated by developments in technology or legislation. In Nigeria just a decade ago, almost 100 banking licences were active and as a result the financial sector faced an enormous credibility problem. When the Reserve Bank governor raised the minimum base capitalisation requirements substantially, a frenzy of consolidation,

mergers and acquisitions ensued in order for some of the smaller players to survive.

What this legislation did was ensure that the basic factors of safety and stability were catered for, thereby opening up a new space for bank brands to play in.

Stay relevant Now, as the Nigerian market becomes more mature, this positioning is no longer as relevant a message – and banks must evolve. There is thus huge scope for banks to respond to the evolving needs of their customers by climbing the value tiers of the branding needs model and extolling the appropriate value associations.

So what we’re seeing is a move towards increased efficiency, better service and advanced product offerings as the base needs are met. Banks that stay on the bottom tier and fail to adapt To page 34

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Underdeveloped markets offer greater potential for differentiation on functional factors that are meaningful to customers will die.

The same principle holds true for any brand. The key is to stay relevant to your customers.

An example of an evolving brand strategy is illustrated by the following.

‘First generation’ Nigerian banks – like First Bank, Union and UBA – were previously perceived as old, bureaucratic and slow, albeit safe. In contrast, ‘second generation’ banks – the likes of GT Bank and Zenith – were perceived as better and more innovative in their service offering and efficiency, but still suffered under the shadow of instability.

As Maslow contends, if a lower need is no longer met, a consumer will reprioritise his needs and revert to a former state or need, until such time as the environment stabilises and allows advancement. The second generation banks, while offering better service and efficiency than their forebears, were not able to guarantee safety and stability, and some collapsed. And first generation banks gladly welcomed back their old customers.

Now, however, with safety a bankable factor, ‘new generation’ banks are coming to the fore.

For example, the new UBA bank was borne of the union of the ‘old UBA’ (a first generation bank) and Standard Trust Bank (a second generation bank) and its brand essence is, appropriately, ‘Trusted Innovator’. This is far more relevant to the new generation of

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Nigerians who are entering the banking system on the back of more stable market conditions.

On the back of these insights, UBA is planning to expand into Africa and can carry this understanding into new markets, first assessing the business environment and then choosing to emphasise relevant elements of its brand essence.

For example, UBA may wish to pronounce the value of ‘trust’ in less-developed DRC, while accentuating its innovation in a more sophisticated market like South Africa.

Already, forward-thinking banks which are moving in tandem with their customers’ needs for advancement and self-actualisation are adding aspirational offerings to their portfolios.

Diamond Bank now has a private arm which caters to its self-actualised consumer set who are seeking ego-satisifiers based on prestige.

But, importantly, it hasn’t managed to lose relevance with its broader client base. This is also true of Absa and Absa Private in South Africa, both of which are different in look and offering, but living comfortably within the same brand paradigm.

Increasingly, forward-looking banks will aspire to broaden their reach into new markets and will need to up their game – and their brand positioning tier – in order to function there.

Otherwise, what has typically happened is that banks that move beyond their home border to set up shop in more developed markets will only attract their own expat customers, while failing to gain new business.

While the product resides on the lower end of the scale –\ and on a lower tier of brand deliverables (designed for cold water washing in streams and tubs), Omo’s more advanced products like Omo Auto and Omo Progress play in the emotive realm of ‘dirt is good’.

Omo has managed to retain a heritage and loyalty with the Black Diamond consumer set that, recent reports commissioned by Unilever indicate, are growing by a phenomenal 30% year on year in the black middle class sector.

Through successful brand extension, Omo has managed to appeal across the scale of its consumer base.

Journey with your customer

Anthony Swart is CEO of The Brand Union, a global brand agency with over 500 staff in 21 offices around the world. He holds a BA in Industrial Psychology, a Master of Management, and completed his MBA through Oxford Brooks University in England, with his Dissertation on ‘The importance of brand delivering on its promise’.

One brand that has retained its heritage while evolving along with the needs of its loyal customers, is Omo washing powder. This SA stalwart has managed to get not only the formula for ‘brighter whites’ right, but also how to journey with its consumers as they undergo different life and economic stages.

Know your tier Marketing in Africa may merit its own textbook, with its own sets of rules and theorems. But by applying Maslow’s insights to your approach and understanding how to map your brand’s position to a hierarchy of needs, you can better understand the space you play in.

From this, you can devise a better strategy that will inform your approach to marketing your brand in Africa.

In summary, you need to understand on which tier your brand most comfortably lives. Thereafter, you must determine if all the brand requirements have been met before you can follow your consumers’ advancement or, preferably, lead it.

References 1 http://www.abraham-maslow.com/m_ motivation/Hierarchy_of_Needs.asp 2 Market research by The Brand Union between 2001 - 2009 3 Extract from Unilever report, 2007 obtained from www.unilver.co.za

research

Sea-change in SA marketplace Socio-economic forces, mostly related to the aftermath of the recession, have resulted in seismic shifts in the local marketplace, according to a new study. Paul Egan summarises the key findings.

T

he report by the UCT Unilever Institute of Strategic Marketing, entitled ‘Wake Up! Shake Up!’, shows that marketers will have to rethink their tried and tested strategies if they want to stay ahead of the game.

It represents over a year of quantitative and qualitative research and integrates the expert analysis of 70 of South Africa’s leading economists, academics, financial analysts and industry specialists, as well as business and marketing forecasters.

In the process it was clear that the marketplace has reconfigured during the last three years, with socio-economic forces fragmenting and realigning traditional consumer segments. Accordingly, we found corresponding evidence that consumer behaviour has changed fundamentally, with many consumers reporting significant adjustments in their purchasing behaviour.

The marketplace has now altered significantly, perhaps irrevocably so, over the last 15 years. On the back of 100 golden months of growth, South Africa experienced a massive downturn which hit like an economic tsunami.

The tsunami analogy is useful in the sense that the causes of the global recession happened far from our shores, but gathered momentum before hitting South Africa. Just as it happens in natural disasters of this sort, those on the lower ground were hit very hard, while those higher up were hardly impacted at all.

Similarly with the recession – those

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While SA consumers continue to aspire to a higher standard of living, the recession has left most under notable economic pressure

The poorest 30% of South Africans have seen their incomes increase more than the average towards the upper end of the socioeconomic spectrum rode out the downturn largely unscathed, whilst others who were lower down on the ladder suffered and are still dealing with the ensuing fallout – such as debt repayment and job losses.

The impact of this can be tracked

clearly in the Growth Incidence Curve devised by our colleague and research partner, Professor Haroon Borat, director of UCT Development Policy Research Unit and member of the President’s Economic Council. This model charts the average growth in incomes since 1995 and, on analysis, shows that the situation in South Africa is more complex than the simple ‘tsunami’ analogy.

Perhaps the beauty of the model is that it demonstrates how things have changed for different groups of South Africans in relative terms.

Using this model, the ‘Wake Up! Shake Up!’ project went on to break up the population into three different groups which we termed ‘Survivors’, ‘Strugglers’ and the ‘Settled’.

Poorest increase their income Perhaps the most striking aspect of Professor Borat’s model is that the poorest 30% of South Africans have seen their incomes increase more than the average since 1995. The reason is simple – the massive expansion of government grants. We termed this group ‘Survivors’ because, despite grants proving a welcome addition to their incomes, life in general remains extremely challenging, with large households typically surviving on a few thousand rand a year. Although they represent 30% of the population, survivors only account for 10% of spending power.

However, just looking at incomes ignores an equally important factor, which economists commonly refer to as ‘assets’.

Assets in this context means access to things like homes and services. Since 1995 there has been a massive rollout of services such as water, housing and electricity, which have all had a marked effect on the poorest households.

On the opposite end of the spectrum are the ‘Settled’. They represent the top 13% of the population who account for 40% of spending power. The effect of the recession on them was relatively limited and in material terms this group rode out the recession largely unscathed. However, even though the material impacts may have been slight, their buying behaviour has certainly changed, largely because the recession impacted their level of confidence. This in turn altered their buying behaviour and reduced their willingness to spend.

As one respondent summed it up: “I’ve learned to live like I am in recession”.

In the middle we have the ‘Strugglers’.

This group represents the mass market, accounts for over 50% of the adult population, and is the group from the 30th percentile (at the bottom) right up to the top 87%. It is huge – responsible for 50% of spend – and there are obvious and significant differences within it. However, what binds this group is that

The effect of the recession on the top 13% of the population was relatively limited

their income increases at below average rates. The reasons are simple – lack of skills, reduced access to capital, and the ability to invest in education.

So-called ‘Strugglers’ have, in a broad sense, been the people hardest hit by recent job losses and increased difficultly in accessing credit – especially as they are already heavily financially burdened.

Many strugglers do not qualify for RDP housing as they earn “too much” and therefore fall into the so-called ‘gap market’ – the place between being eligible for RDP accommodation and affording a bond.

Despite inequality of outcomes, there are definite themes emerging which are relevant right across the spectrum.

Perhaps the most conspicuous is that rise of ‘consumer power’. These days consumers across the board say they are now more price conscious, will shop around more and are more likely to complain. They have been on a sharp learning curve and, with the introduction of new consumer legislation, power has shifted away from the marketer towards the consumer. Therefore, with the ‘marketing monarchy’ over, marketers will have to move away from traditional

approaches and try and enter into a two-way dialogue with consumers.

So where to now? One thing the experts were clear on is that we are now in extremely uncertain times. With a very different consumer landscape emerging, there will be pressure on marketers and businesses to adapt accordingly. To make matters even more challenging, this will have to be achieved in a period where the consensus is for low growth.

The heady days of 2004 to 2008, when double digit sales growth was the order of the day, are unlikely to return in a hurry. Businesses wanting to grow in such a difficult climate will need to seek out new markets and find efficiencies.

On the upside, though, aspiration is ever present and will return.

Paul Egan works as the managing consultant for the UCT Unilever Institute of Strategic Marketing. He has over 10 years of experience in marketing and communications, having worked for Barclays, Telewest, LondonWaste and The Qualitative Consultancy. He has an MBA from the University of Stellenbosch and is a full member of the Chartered Institute of Marketing (UK).

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landmarks

Coke advertising presence in downtown Johannesburg, circa 1950

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As the world’s best-known brand celebrates its 125th anniversary and 73 years in SA, Coca-Cola wants to continue to grow its presence here and on the rest of the continent. By Mike Simpson.

landmarks

I

Arrival in SA Coca-Cola was introduced to South Africa in 1938 – the same year it was also launched in Australia, Norway and Austria.

It was first sold in St George’s Square in Cape Town.

ndeed, Bill Egbe, the Cameroon-born and US-educated president of Coca-Cola SA, believes there’s an inexorable connection between Africa’s psyche and that of the brand. Which may be one of the reasons why South Africa is the sixth biggest consumer of Coke in the world – remarkable considering it sells in over 200 countries.

“The continent has had huge challenges. But Africans are uniquely resilient, and if you watch them going about their daily lives you realise there is a spirit of optimism and resilience,” observes Egbe (pictured right). “That natural optimism connects very easily with what Coke stands for, because there is no brand in the world that personifies optimism and happiness like we do.

“So when we engage Africans in this way, they get it very quickly. That’s why in Africa we’re never really viewed as a foreign brand. We’re a local brand in the countries in which we do business. The values that we espouse are things that connect with them intrinsically.

“The people want fun out of everyday life – and that is what Coke is all about.

That’s why this is a continent that understands and connects with us,” Egbe says.

The drink invented by pharmacist Dr John Pemberton and first sold at Jacob’s Pharmacy in downtown Atlanta, Georgia in 1886, has been hosting worldwide celebrations of its 125th anniversary since early May. These include employee festivals, a Celebration Concert featuring top performers and celebrities like Ryan Seacrest, Kelly Clarkson and Natasha Bedingfield, exhibitions and numerous community activities.

African perspective In South Africa, the company donated R1,25-million to community initiatives involving water stewardship, recycling, entrepreneurship and HIV/Aids nutrition. In Zimbabwe, it sponsored the

Harare International Festival of Arts, while in Kenya the company kicked off of a series of sustainability initiatives which included the launch of a Kenya Red Cross water partnership.

Unsurprisingly, given his African roots, Egbe is enthusiastic about the continent’s economic growth potential. He believes passionately that international corporations must be the catalyst for accelerating development and harnessing its peoples’ natural disposition for trading and informal entrepreneurship.

“There’s no way that a great many of the people would survive if there wasn’t an informal sector. The bulk of that is through simple trading: growing and selling farm produce; arts and crafts; or buying and selling just about anything.

Trading sustains hundreds of millions of Africans,” he says.

“But to move beyond that we have to build a manufacturing base; it is the guaranteed, tested, path for reducing poverty on an accelerated basis. You have to create the job opportunities that are anchored in manufacturing something which has unique added value and that you can on-sell to other markets at a premium.

“It’s fundamental – go beyond trading to true entrepreneurship, manufacturing and value-added services.”

To page 44

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landmarks

Going hand-in-hand with that, says the finance and marketing MBA from Howard University in Washington DC, is marketing prowess, which is “one of the things that can unlock additional growth in the economies of Africa”.

Marketing realities The Coke organisation seems to agree and last year established a Chair of Marketing in South Africa, complementing similar university-based initiatives already in place in emerging markets like Lebanon and Slovenia.

Egbe says this recognises that the daily marketing realities in emerging markets are different to those in established economies, and that specific studies and skills transfers are required.

A key reality for his company’s marketers is that they are selling a product which has strong appeal (it tastes good), but is not something that African consumers need every day, particularly when they have limited spending power.

The answer is to have a strong additional connection with customers and build an emotional bond that goes beyond simply the taste.

“You have to keep building, rebuilding and refreshing that connection every day, because there are other things that are demanding the public’s interest and disposable income,” he explains. “We also have to build new connections as additional people discover our products.”

Among the challenges of marketing in South Africa – and indeed the entire continent – are the high cost of advertising, limited suitable media to carry the message, and the difficulties that consumers have in getting access to media, Egbe observes.

“There’s no place that’s more challenging than Africa – and that really pushes the need for innovation by our marketing people at Coca-Cola to an acute level. So you have to find other ways of doing things,” says Egbe.

“Every weekend, across South Africa, there are hundreds of local activities to which we deploy people to actively

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engage consumers – school plays, sports matches, weddings, baptisms. We have to be in the field, where our customers are. Those connections are critical.”

But, given Coke’s iconic brand status in virtually every corner of the world,

Marketing is one of the things that can unlock additional growth in the economies of Africa

isn’t there a temptation to take one’s foot off the marketing pedal and rather concentrate on other aspects of the business?

“Absolutely not,” says Egbe, “because of the need to maintain relationships. It’s the same with personal relationships – if you back off, the relationship can go wrong. Besides, in the FMCG business you have to keep recruiting new friends and turning those into relationships.

“Plus, you need to move consumers up the pyramid from casual relationships to ‘love’ relationships. And hopefully we’ll keep people in love with us. That requires work and investment every day … it is fundamental to our success.”

One of our favourite images of Christmas was all down to a Coca-Cola advertising campaign of the 1930s

Reinventing Father Christmas Most people today agree on what Father Christmas looks like – a jolly and chubby grandfatherly figure with a white beard and red suit. But it wasn’t always so and, depending on the country, he could be large or small and wearing either red, green or brown.

But in the early 1920s Coke began Christmas advertising in America in an effort to boost sales in the slower winter months. Several different images of Father Christmas were used in these campaigns, but none proved

popular with consumers until 1931.

That year, an illustrator of Scandinavian origin named Haddon Sundblom was commissioned to paint a figure that was both wholesome and realistic. The result was the jolly figure in red and white (Coke’s colours) that we know today.

Sundblom continued to paint this version of Father Christmas until 1964, by which time it had become entrenched as the popular and generally accepted image of one of the world’s best-loved characters.

landmarks

Distinctive contour bottle As Coke became increasingly successful, competitors tried to imitate it by using the same distinctive script for products with similar-sounding names like ‘Koca-Nola’, ‘Celery-Cola’ and ‘Koka-Kola’.

The company then asked bottle manufacturers to submit designs for a new bottle that would be so distinctive that it could be recognised by feel in the dark, or identified when lying broken on the ground.

Alexander Samuelson of the Root Glass Company in Indiana, USA designed the distinctive shape and it was patented in late 1915 and went into production in 1916.

In 1960, the contour bottle was registered as a trademark and it remains arguably the most recognised bottle in the world.

In 1980, the bottle was a key element in the South Africanmade hit movie, The Gods Must Be Crazy.

Covergirl Coke In 1950, Coca-Cola became the first product to appear on the cover of Time, the respected global news magazine.

The magazine’s editors wanted to have a photo of Robert

Woodruff, who was president of the company between 1923 and 1954. However he refused, stating that the product was the only important element in the company.

ontheup Young lions rapidly ascending the marketing ladder

The yearn to learn Founder of her own marketing consultancy; chairperson of the KZN Youth Chamber of Commerce; vice-chair of the KZN Businesswomen’s Association … and she’s not yet 30. Di Bayley speaks to high-flier Nobuntu Webster.

I

n just five years, Nobuntu Webster – now 29 – has created a marketing consultancy that seems to match her personality: Both are specialists and results orientated. Key to this has been focus, which she’s been single-minded about from the outset.

“My main concern initially was working capital for the first few months of running the business, while at the same time building a profile for the company,” she recalls.

“What helped me were two things: One was to work with freelancers on a campaign/project basis; and the second was networking.”

It was through the latter that she was able to secure business with a large corporate within a few months of opening shop. “This really contributed hugely to the growth of our company profile,” Webster says.

Where many women still have to look through the ‘glass ceiling’ and view the fast track to success from afar, she believes there are “no barriers for women in the communications business. In fact, women thrive in this industry as the skills needed in this field are somewhat innate due to women’s EQ”.

Black women in marketing There are, however, more barriers for black women to break through: “Due to the history of our country, black communications firms are a relatively new phenomenon in comparison to white-owned firms,” Webster points out.

“Therefore, black female-owned businesses cannot compete with other companies based on experience which is counted in years. Rather, they have to compete on innovation and qualification –

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ontheup Young lions rapidly ascending the marketing ladder

and often have to work twice as hard to prove themselves.”

Then there’s the issue of being young and having to advise clients who are sometimes far older and frequently set in their ways. “The main barriers for young women are those of credentials and a congested market caused by new entrants to the field,” she explains.

So, how did the then 24-year-old hard-charger deal with the ‘credibility gap’? “When advising clients who are not experts in the field, they generally accept that the younger generation is more knowledgeable in marketing and communications,” she says.

“Specialists in the field, though, tend to be more sceptical and are better convinced by output. It is therefore critical to back up advice with thorough research of the client’s industry and by applying sound marketing theory. Using experiences from past projects is also helpful in bridging that credibility gap.”

Credibility is vital, as Ayano Communications provides services in brand development and promotion, market research, strategy development and staffing solutions.

The importance of education Having completed a diploma in marketing from the IMM Graduate School of Marketing in 2005, Webster says she’s a “true specialist” in her arena. “I am a marketer and I am most knowledgeable in my areas of expertise. I’ve managed to successfully build a respected company that offers communication services to various sectors and I believe this is because I received the relevant education in the field, and also because I understand what the market wants.”

She’s big on the importance and value of education, and also holds a

postgraduate diploma in International Trade Management; is currently studying towards BPhil Honours in Marketing Management from the IMM GSM, and plans to pursue her Masters thereafter.

A BCom was her first port of call, but a desire to specialise saw her opt for the IMM diplomas instead. “The BCom was too general,” she says, “and I wanted a qualification in a specialised field.”

Specialising, she believes, is what has given her the expertise required to deal with a variety of clients in a way that benefits each. It’s also seen her take leadership roles in both the KZN Youth Chamber of Commerce (KYCC) and the KZN branch of the Businesswomen’s Association of South Africa.

Become a specialist by studying within your field and constantly being in touch with developments As Secretary General of the KYCC, Webster fully supports the organisation’s objectives, which include instilling entrepreneurial flair; unleashing innovation and creativity; embracing youth economic empowerment; and encouraging integrity and service excellence.

Being Vice Chairperson of the KZN branch of The Businesswomen’s Association – said to be the largest and most prominent association of business and professional women in South Africa

and the voice of women in business – is part of her philosophy of networking and embracing all facets of her industry, as well as those she serves. Her advice to a young woman starting her own business in South Africa today: “Expose yourself to your industry and become a specialist by studying within your field and constantly being in touch with developments in the industry. Make sure you are highly skilled at what you do”.

Even with her specialised skill set and vast network, being situated in KwaZuluNatal is challenging. “Most head offices – especially in the FMCG arena – are Gauteng-based. Their key decision makers are also often Gauteng-based, which means that the bulk of the work goes to marketing companies located there,” she says. “However, we do work with Gauteng companies for the provincial implementation of campaigns.”

Now in its fifth year, Ayano Communications continues to build on its experience. And you can’t be an ‘integrated agency’ unless you’re incorporating online and mobile into your clients’ strategies. For this, Webster hired a digital marketing expert, who compiles a digital strategy for each campaign.

Nobody can have all the skills, all the time – but you can surround yourself with them, she believes.

With her own future and that of her company looking good, her motto – courtesy of American writer Christopher Morley – sums up how she keeps reaching for new challenges: “There are three ingredients in the good life: learning, earning and yearning.” dianne bayley is the former editor of marketingweb.co.za and has a keen interest in topical issues relating to the the marketing profession.

WHAT WE OFFER • PUBLIC RELATIONS • PUBLICITY • EVENTS

HOW WE THINK

• SKILLED STRATEGISTS • SPECIALIST WRITERS • EXPERIENCED PROJECT MANAGERS

CONTACT US

ALISON 011 447 7241 www.stonesoup.co.za

hotoffthepress

The seat of power For Chief Marketing Officers, wielding power in the boardroom is about more than just experience and expertise. Nicola Kleyn analyses new research on the perennial issue of marketing’s place at the boardroom table.

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aments about the demise of marketing power in the boardroom have been a constant refrain in practitioner circles for some time. Some will argue that “marketing is not what it used to be”.

Others will note that (thanks to the significant prevalence of chartered accountants occupying the driving seat in many corporations) marketing never was top of the firm’s agenda, anyway.

Whatever the case may be, it can only change if the custodians of marketing not only have a seat at the boardroom table, but can influence their executive peers to invest in building marketing capability.

An article by Nash and Mahajan published in the January 2011 edition of the American Journal of Marketing (generally acknowledged as the holy grail of marketing academics) investigates the drivers and outcomes of Chief Marketing Officer (CMO) power.

Previous research by the authors had found no relationship between the presence or absence of a CMO in the Top Managment Team (referred to by academics and researchers as ‘the TMT’) and a firm’s business performance – a worrying situation for top marketers seeking to justify their remuneration!

This new study built on the previous findings by investigating whether Chief Marketing Officer empowerment, rather than mere presence, had more influence on a company’s performance.

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Influencing decision making The authors define CMO power at top level as the ability of the marketer to influence decision making – not via personal attributes, but via power that derives from resources controlled by the marketer. These could be financial, physical, legal, informational, human, relational and organisational.

Nash and Mahajan make the case that Chief Marketing Officers typically don’t have control over the first three (I disagree with them on the first resource because marketers often control significant budgets, particularly in the business-to-consumer context).

Where other members of top management have marketing skills, the power of the CMO is reduced ‘Informational’ resources include data and insights about customers and the market place, while ‘human’ resources comprise the skills and knowledge of employees in the marketing function. ‘Relational’ resources embrace relationships with channel members, end users and

marketing services agencies, while ‘organisational’ can involve marketing capabilities which integrate the other resources (for example, a firm’s ‘marketing way’).

Drivers of CMO To test the drivers of CMO power and their impact on performance of the business, the authors hypothesise that such power is directly related to the following: • The amount of control the Chief Marketing Officer has over the resources identified above; • The relative importance of these resources to the Top Management Team; • The effectiveness with which the CMO provides these resources to top management; • The relative importance of the CMO to the Top Management Team and whether he/she can be substituted.

The authors also propose that Chief Marketing Officers have more power in industries where customer preferences are volatile and marketrelated uncertainty is high, as well as in firms that engage in high levels of innovation.

Nash and Mahajan further put forward the idea that, in circumstances where other members of top management have critical marketing skills of their own, the power of the CMO is reduced. Their final assertion is that CMOs who also control the sales function will have more power than their counterparts who don’t.

Having identified the possible drivers of power, the authors go on to argue that CMO power will be positively related to the performance of the business, but will be moderated by the number of divisions in the firm (positively) and the extent to which the company strategy focuses on diversified activities (negatively).

Findings The most important finding was that CMO power and the firm’s performance increase when Chief Marketing Officers have control over the sales function.

However, the researchers found no evidence that CMO power and the firm’s performance increase when Chief Marketing Officers have no control over the sales function Other notable findings: • In the case of companies that had many diversified business units operating in unrelated industries, those with strongly empowered CMOs had lower performance than those with less empowered CMOs; • Powerful CMOs were found to influence performance in companies with a number of complementary divisions or business units; • Industry stability was not related to CMO power, suggesting that “marketing influence in the C-suite (the highest level of executive management) is more a function of factors that are internal rather than external to the firm and the Top Management Team” (Nash & Mahajan 2001, p. 73); • The presence of marketing experience among other top level executives was found to negatively affect the Chief Marketing Officer’s power. But in companies with limited top management experience and high innovation, the marketing power of the CMO was found to be higher.

So what does this all mean?

The first implication of the study is that Chief Marketing Officers seeking to

become more powerful need to focus on acquiring and leveraging information, human, relational and organisational resources. Productive resourcing goes beyond a mere focus on headcount and spending budgets on subscriptions to databases that provide research – the resources also need to be harnessed to provide clear value to the Top Management Team.

The second noteworthy aspect is the finding that the firm’s business performance is positively related to the CMO having control over the sales function. But if ousting your sales director colleague sounds rather dramatic, perhaps the recommendation should be toned down to the suggestion that Chief Marketing Officers forge stronger relationships between the sales and marketing functions.

The third significant finding is that where companies have many complementary divisions or business units, there is a link between company performance and how much power the CMO has. But that the reverse applies for CMOs heading up marketing in a company with many business units operating in unrelated industries.

So the implication for chief executives is that if they have many divisions that are strategically related, they should empower their CMO. However, for a company that operates a number of diversified and un-related businesses,

empowering the CMO may be detrimental to the performance of the business (… I know, I haven’t quite got my head around this one either …).

The finding that Chief Marketing Officers operating in management teams with little marketing know-how have more power doesn’t necessarily suggest that marketers should rush out to join ‘marketing-naïve’ companies.

Although CMOs may acquire more power in this situation, building a strong orientation towards customers could be more difficult when fellow C-suite members are less aware of the role that marketing plays in creating value for the company.

Editor’s note: For a counterpoint argument on marketing’s place in the boardroom, see Wendy Sweetman’s article overleaf Reference: Nath, P. & Mahajan, P. (2011) Marketing in the C-suite: a study of Chief Marketing Officer power in top management teams.

Journal of Marketing 75 (January) 60-77.

Nicola Kleyn is a senior lecturer in Marketing at the Gordon Institute of Business Science (GIBS). She holds a B Com, a B Com (Hons) and an MBA (Wits). She received the University of the Witwatersrand’s Distinguished Teacher’s Award for the Faculty of Commerce in May 1996.

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anotherview

CMOs in high places

Notwithstanding the views of some researchers, Wendy Sweetman believes there’s a clear and useful place for marketers at board level.

I

n recent times there’s been a greater than ever need to understand what customers want from a company and how to align those requirements with boardroom level strategy – in a way that benefits both parties.

And, since it has always been marketing’s job to stay in touch with customer demands and trends, it seemed apt that an additional seat be added to the boardroom table. In so doing, the CMO (Chief Marketing Officer) role was born.

It ends when CMOs stop competing with their co-executives for attention and start doing what they are best at Since then there have been many heated debates – and equally numerous misconceptions – as to what exactly the CMO is supposed to bring to the top table. To my mind, it has to be intent to align the corporate business strategy of a company with that of its marketing efforts. Those readers with a clear understanding of what marketing is all about, will surely agree that it identifies strategic opportunity and steers the company towards innovation and change.

Gone are the days when ‘marketing’

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was viewed as being the same as ‘sales’, while the perception that ‘marketing’ equals ‘promotion’ is also dying out. These two disciplines have now become highly specialised in their own right and marketers have adapted to become expert operators and managers in one or other of the fields.

Birth of the CMO The birth of the CMO position is an opportunity to again create synergy between both of these clearly defined and critical areas of marketing. In addition, the CMO should take a wide strategic view of the entire business in an effort to integrate marketing’s knowledge base (gained from customers and other stakeholders) into the board’s long-term decision-making processes.

The CMO who feels challenged or isolated in the boardroom (or “lonely” as some have claimed), should be asking how he or she can proactively contribute to the executive team and facilitate relevant decision-making at the top level.

For a marketer to be noticed as a valuable resource at such a senior level, there needs to be a cross-over between creativity and analytics. It starts with being able to justify media spend, report on return on investment, and measure efforts. It ends when CMOs stop competing with their co-executives for attention and start doing what they are best at; networking and leveraging resources and information – from the entire business!

Marketers have the unique position in a company of being able to compile and present meaningful and properlyintegrated facts that they can put on

The birth of the CMO position is an opportunity to create synergy between the key areas of marketing, to the overall benefit of boardroomlevel strategy

the boardroom table.

So when the debate of ‘should marketing work with sales?’ and ‘should marketing work with finance?’ next presents itself, stand up and say ‘yes’! Marketing should be working closely with all areas of the business.

How else will it be able to deliver tangible benefits into the heart of the boardroom?

Wendy Sweetman is the head of marketing and business development of the IMM Group and holds an MBA (Oxford Brookes University, UK). She has 16 years of experience in marketing strategy, communications and advertising.

globalvillage

The Mud Mosque in Djenne is one of three World Heritage Sites in Mali

From here to Timbuktu “Where’s Mali?” is the puzzled response of most South Africans. But this little-known nation is attracting major investment from our shores, reports Gillian Jones.

M

ali may be an enigma, but two SA gold companies have played a significant role in reshaping its economy. Until a few years ago, cotton was the West African country’s main export, but gold has now claimed number one spot and made it the continent’s third largest gold producer.

After Mali became a democracy in 1991, the government identified gold mining as a potential driver of the economy, according to an SA Institute of International Affairs (SAIIA) report

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entitled Timbuktu’s Golden Legacy: The experience of South African firms doing business in Mali. Indeed, national laws were changed to encourage foreign investment in mining and in 1994 the local currency was devalued to make it more cost-effective for mining companies to operate there.

“The result was a veritable gold boom,” says SAIIA. And it was largely led by South African mining corporations, Randgold Resources and AngloGold Ashanti, which have become the leading Malian gold producers.

Gold now accounts for 70% of its

exports and 15% of its GDP, according to Miningreview.com.

Agriculture still dominates the economy, contributing around 40% to GDP and employing 80% of the working population, according to the Investment Promotion Agency of Mali (www.apimali.gov.ml).

The Niger and the Senegal rivers provide fertile ground capable of supporting two million hectares of agriculture.

The government wants to utilise this capacity and encourages foreign investment in agro-industry projects.

SA company Illovo Sugar has taken advantage with its Markala sugar

globalvillage

project outside Bamako, the country’s capital. It says the project, comprising an agricultural and an industrial component, is going ahead with “strong support” from the government.

However, income from gold and agriculture still represents less than what Mali receives in development aid and remittances from emigrants.

The reality of being business-friendly Landlocked Mali may not be the easiest country in which to do business – it ranked 153 out of 183 economies in the 2011 World Bank Ease of Doing Business Report – but this is its third consecutive year of improvement. “Major” improvements have been made in four areas: starting a business; dealing with construction permits; trading across borders; and enforcing contracts. But the minimum capital needed to start a business is still double that of the regional average.

Peter Munday* of a Johannesburgbased hedge fund management company which has an interest in frontier markets, says Mali may be business-friendly in theory, but in practice it’s not always so.

“At the top level they encourage foreign firms, but at local government level … you get harassed by tax and labour inspectors, and held up by red tape,” he cautions. Munday says government takes a mandatory 10% share of every mine, but at least this makes for certainty.

Source Interior Brand Architects, an SA design company, is working on the expansion of the five-star Radisson Blu Bamako hotel. Designer and partner Andrew Merrington, who is driving the project, says Mali is “thriving”, and unlike many of its neighbours it is not thriving on corruption. “One of the pluses about Mali is the lack of corruption,” he says.

“They don’t take to bribing very well in that place.”

Thanks to South African expertise, Bamako Urban Park has been created out of an abandoned botanical garden.

Planning Partners International found

The capital of Bamako, located on the Niger River, is said to be one of the fastest growing cities in the world

Mali’s gold boom has been largely led by South African mining corporations

most of the professionals on the project in Cape Town, and many of the garden’s philosophies are inspired by the Kirstenbosch National Botanical Garden (Engineering News, “South Africans play big role in creating Mali’s Bamako Urban Park” March 15, 2011).

SA parastatal Eskom, which manages a hydro-thermal power station supplying electricity to Mali, Mauritania and Senegal, has a presence in the region for “strategic and political” reasons, says SAIIA.

Large and landlocked Among the 25 poorest countries in the world, and with about two-thirds of its land area desert or semi-desert, Mali is

double the size of France and difficult to get around. Main cities like Timbuktu and Kidal are isolated and only reached by air or by sweltering 20-hour land journeys in four-wheel drives.

It’s also landlocked, sharing borders with Mauritania, Senegal, Guinea, Ivory Coast, Burkina Faso, Niger and Algeria.

The Mali government says this is a selling point, as it gives it access to a sub-regional market of over 220-million consumers.

But, on the downside, it is dependant on its neighbours for trade routes. When civil war broke out in Ivory Coast in 2003, Mali’s transport costs increased as it had to re-route exports.

The infrastructure is getting better and government has made improving the road network a top priority.

Telecommunications has also improved, with around 3.7-million Malians owning cellphones.

Tackling tourism Although politically stable, the security situation in the Sahel region is a worry, with an active al-Qaida affiliate which has claimed responsibility for recent To page 54

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globalvillage

Even outside the capital, some infrastructure – like Timbuktu Airport – is relatively modern

kidnappings of Westerners, Associated Press reported in April. This may hamper efforts to promote tourism, particularly to its three UNESCO World Heritage Sites – the tomb of Askia and the historic towns of Timbuktu and Djenne.

Culture shock A former French colony, Mali is a difficult environment for South Africans. You have to be able to speak French and, in rural areas, Malians may only speak Bambara, the most popular indigenous language. The majority of the population practise Islam.

“But for South Africans the difficulties are compounded by the differences in economic environment, language, culture, religion and judicial system.

Even the accounting system is different,” reports SAIIA. Merrington says he was pleasantly surprised by the Malians. “The airport in Bamako is quite good, with modern infrastructure and the officials are efficient. You expect because it’s French that people would be surly, but they’re actually quite friendly.”

Paolo Magni, a South African currently cycling from Morocco through West Africa and down to Cape Town, describes Bamako as having “an incredible atmosphere”.

“The Chinese bombarded the market two years ago with the little KTM... sort of like scooters, and every man and

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A former French colony, Mali is a difficult environment for South Africans

Language:French (official) Currency: CFA (Communaute Financiere Africaine) franc Capital: Bamako Population: 13.3-million (UN, 2010) Gross national income per capita: US $680 (World Bank, 2009)

country factfile

woman here drives one, so the air in the city is filthy,” he says. Most people cover their mouths and noses and the people dress casually in western clothing like t-shirts and shorts, although the women cover their heads.

“But everywhere you just see colours, and against a very dark Malian skin it makes it all the more striking,” Magni notes.

Merrington adds: “It’s very much a trading kind of nation, entrepreneurial and with typical bartering and negotiation.”

Its media is considered free and fair, albeit reaching a tiny proportion of the population, says a BBC country report. It has around 40 privately-owned newspapers and 50 private radio and television stations. Internet penetration is tiny with about 200 000 users (CIA World Fact Book).

A final word of advice from Munday on doing business in Mali: “Take a lesson from the Chinese and learn French and Bambara beforehand. Then know that you’re going to be out of your comfort zone while there.”

The market

* = Not his real name as he is not authorised by his employer to give media interviews

Mali only has a small domestic market for consumer goods due to endemic poverty, according to a US government report on the country. It has a massive informal sector with low purchasing power, and a tiny middle and upper class. This, combined with the long distance from ports, makes it unattractive to retailers.

Gillian Jones is the former editorial director of Strategic Marketing and former editor of Marketingweb.

She is now with the South African Press Association.

Sarah Britten is the strategic planning director of Y&R Johannesburg. She has a doctorate in Applied English Language Studies and wrote her doctoral thesis on the role of advertising in nation-building in post-apartheid South Africa. Britten is also the author of two books on South African insults.

offthepeg glancing at marketing askance

The view in the loo In our busy world there are few places where marketers can get a consumer’s full attention. From where she sits, says Sarah Britten, the smallest room of all looks like an under-utilised opportunity.

S

o there I was sitting in a restaurant sipping Veuve Clicquot with friends (who were paying) while we waited for the Rapture.

The signs were everywhere: the music (Enigma), the name of the wi-fi network (Revelation), and the Jaegermeister poster in the men’s bathroom – the one depicting a clawed hand holding a bottle with the legend ‘Unleash the beast’. One of our party photographed it on his iPhone and passed it around the table, as one does.

The poster in the women’s loos was less interesting; something about a new vodka cocktail called Kiss. I photographed it because I collect images of posters in public conveniences, just as I collect pics of gondola ends in supermarkets. You never know when you might need them for a competitor review for one of your advertising clients.

As out-of-home media goes, bathroom advertising is probably my favourite – possibly because it’s the one that I’m most likely to notice. I

There are those who moan that advertisers have invaded our most private of spaces

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know that there are those who moan that advertisers have invaded our most private of spaces, but I actually enjoy having something to occupy my mind.

I take in what I’m looking at, too, which is quite something because few media channels, whether out-of-home or not, enjoy our undivided attention these days.

Nowhere to look That’s what makes washroom media so compelling a proposition for advertisers – there’s nowhere else to look. When you’re sitting there staring at the back of the cubicle door (or standing there, staring at the wall; let’s not discriminate), there’s nothing else to do, unless you’re one of those multi-taskers who like to check their Twitter feeds while sitting there (and we won’t talk about them.

Washroom media offers a golden opportunity for advertisers to get creative. Your audience is captive (the average dwell time for a woman is 105 seconds; for men it’s 55 seconds, apparently). The opportunity for propinquity* planning is there. And you can get away – just – with puns.

Yet for the most part it’s wasted, and that’s an immense pity. I wish our advertisers made better use of the medium. Most of our washroom ads are slightly tweaked print executions. The most interesting poster in my local gym is for Anusol, and even then the only nod to creativity is an image of toilet paper patterned with flames.

So here’s my challenge to all you

bright sparks out there. Come up with genuinely creative bathroom ads. Give me interesting stuff to look at during that dwell time and I might take in your message – the one that, in any other circumstance, goes in one ear and out the other. *For those who don’t spend their ‘dwell time’ reading dictionaries, ‘propinquity’ is defined by the Oxford Dictionary as: “the state of being close to someone or something; proximity” – Editor.

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