ADVERTISING
SA INDUSTRY’S BIG SETBACK Karabo Songo, CEO of Brave group – a mid-sized South African agency – said the country’s stringent lockdown regulations had set the advertising
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industry back 10 years. Many agencies were fighting for survival and new market entrants were among the hardest hit as they struggled to build sustainable businesses. Despite the setbacks, Songo pointed to lockdowns contributing to the emergence of new ways of doing business that have the potential to transform the local industry. “We have fast-tracked the mind of the customer to work on digital platforms in order to deliver projects. We can also play around with talent based in different locations while working on one project,” explained Songo. “This [has] opened the marketplace to new resources and teams outside South Africa – allowing clients to consult with anyone they believe can deliver value. These are just some of the positives of Covid-19.”
LATE PAYMENTS, SMALLER BUDGETS Founder and chief architect of Johannesburg-based DNA Brand Architects, Sylvester Chauke, said the agency had expectations of doubling its annual revenue in 2020, but the entire business value chain was adversely impacted when the pandemic hit South Africa in March last year.
Issue 1 2021
Aurelia Mbokazi is a freelance journalist, editor and development communications specialist with 23 years’ experience in telling impactful stories across Africa on various platforms, including print and the digital space. She has occupied leading roles in national newspapers, magazines and digital platforms.
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Nwafor added that the agency had been delighted to find that it is cheaper and more productive to do business online. He noted that the growth of digital marketing in Nigeria, influenced by increased uptake by Nigerians of e-commerce businesses, resulted in improved internet connectivity and other opportunities for the industry. As an example, Alternative Adverts Network Services created its own digital platform that enabled clients to pay for services on global platforms such as Google, Instagram and Facebook with the local naira currency, rather than the US dollar which is restricted in that market. Nwafor said the pandemic also opened up easier opportunities for cross-regional agency collaborations and, in the second quarter of 2021, he received three to four proposals from agencies based in South Africa and Kenya wanting to explore partnerships – without having to hop from one country to another for discussions.
“We lost revenue from clients that operate in the alcohol, travel and hospitality sectors. Some clients cut back on traditional consumer advertising budgets and channelled funds to other areas of their businesses, especially internal marketing,” he stated. “Late payments, [smaller] budgets and timelines that were moved due to lockdowns also impacted our business.” To weather the storm, the agency has tightly managed its cash flow and adjusted to conducting business online. The online transition was eased somewhat by international clients already being accustomed to being serviced digitally prior to the pandemic. Chauke said some of the agency’s gains from the ‘new normal’ included slashing its travel and entertainment budgets, as well as saving the time previously spent travelling back and forth to meetings. He added that carrying operational expenses such as office space and services that are not used to their full capacity due to work-from-home requirements were among the challenges that DNA Brand Architects continued to experience. However, he was hopeful the agency would be welcoming its SA-based clients back to their offices as soon as businesses adjusted and lockdowns were a thing of the past. Meanwhile, in common with its counterparts around the world, Africa’s advertising industry must continue to adapt to a new norm that, in most instances, is quite different to the way it conducted business less than two years ago. The challenges are considerable, but there’s a significant upside to be embraced too.
