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The small agency could be the best bet

When South African advertising agencies were all locally owned, the creative standard and the general advertising vibe was at its peak. But that changed when the international advertising agency conglomerates arrived on the scene, and bought the local shops.

Today, about 80% local advertising budgets passes through them and the "local is lekker" vibe has faded. Gone are the days when advertising was the greatest fun you could have with your clothes on. This advertising did the job.

There are still a few local small agencies operating, many of which continue to produce advertising that works. It's time South African marketers had a rethink on this issue. Employing a small ad agency can be like hiring a top executive. Small agencies tend to be nimble and the people on board have the qualities to work well with top management.

Their value to the marketer lies in the fact that they tend to have a strong culture, and a vision built around the collective talent of their team.

The golden rule, however, is never to hire a small agency based on price alone. Aside from the need for creative talent, the primary concern should be whether the agency has in-depth knowledge of the industry in which the marketer operates; how well they know the history of the company and its products; and the competitive landscape.

The analogy of employing a top executive links to relationships. There has to be a cultural match between the marketer's team and the agency team. The agency has to buy into the goals and visions of the company.

When push comes to shove, marketers are in business for one reason only: Not to win awards, but to sell what they produce and make profits.

South African marketers are more likely to find a local agency that can help them achieve this objective, simply because they have a better in-depth understanding of the local consumer culture in this country, the media options that are available, and the distribution network through which the goods move.

When seeking a local agency marketers should always keep in mind that creativity only becomes effective when it creates conversation with consumers. From this strong brand relationships are formed.

Changing ad speak

The euphoria generated by the first ever World Soccer tournament to be held on African soil that has kept local marketers agog for the past four years is no more. Without this feel-good stimulus to help them, marketers now face the prospect of having to generate revenue growth in an economic climate that is still battling to recover from the negative effects of the 2008/9 recession.

This they can only achieve by launching new products, and increasing the sales of current brands. To do this they have to stimulate their value among consumers.

However, economists are not optimistic that the economy will recover before the second half of 2011. The recent wave of local worker strikes is bound to have a negative impact on business generally. The workers may have won the immediate battle by gaining wage increases above the rate of inflation, but this bonus will be short-lived. It will eventually impact on their disposable income as the higher cost of production works its way through the system and increase prices.

Riding the feel good wave, the advertising industry has also taken its eye off the business ball by producing communication that was pretty to look at, but lacked the power to generate enough brand value to clinch sales.

To build revenue marketers have no option but to woo consumers with advertising that is positive in construct. The consumer needs to be persuaded that involvement with the brand will satisfy, emotionally, well as practically. Currently these motivators are often missing from much of local advertising. The creative idea and the substantive rationale is often weak and puerile. It talks at them, which does not encourage relationship building.

Creatives need to rethink their role in advertising. Irrespective of how they see themselves, their function is simply to present the consumer with positive product value points that encourages them to buy.

Too many advertisements also forget the golden rule in modern communication. Time is the single most precious commodity in people's lives today. People don't have enough of it and the pressure is to move faster and with less.

It takes time and serious creative skill to produce advertising that successfully seduces people to change their brand allegiance.

South Africa's performance at the 2010 Cannes Ad festival was nothing to write home about. A general overview of South African advertising creativity suggests that either creatives have lost sight of their role in business, or that there is a lack of good talent out there.

To lift revenue marketers need to think smarter, creatives need to stop thinking about massaging their own ego and instead create advertising that generates lasting brand relationships. Take a look at the Nike ads. Nike keeps its customers and attracts more every year. That is why it is the world's number one shoe brand.

The changing outlook

There was a time when marketers did deals with ad agencies based on the quality of the product they produced, its impact on sales, the price they charged, their service delivery and commitment.

But times are changing. Travel company Thomas Cook has put its 30 million pound account up for pitch - but it is asking for a 1 million pound signing on fee from the winning agency.

All is not lost

Recently on an international level there has been rhetoric about the increasing clutter of advertising and the effectiveness of word-of-mouth. The Wharton School of Business USA and the American Advertising Research Foundation have done some research on both to throw some light on these issues.

The findings are not good news for the media. They found that television advertising generally loses money for most marketers in terms of response. However, if the marketer can afford a heavy frequency pattern, the medium works well. It appears that frequency is vital to generate a high level of response. Therefore, when you use TV think twice about the long commercial. Rather condense the story into shorter version, and up the frequency.

When it comes to word-out-mouth, about 25% is sparked off directly by advertising overall. When broadcast online, advertising influence on word-of-mouth jump to 33 1/3.%

Interestingly, a study of DVRs in South African households by Millward Brown found that essentially there was no difference in advertising recall or likeability scores among households with and without DVRs. This study dovetailed with the findings by Proctor & Gamble USA.

It appears that DVR households tend to watch many programmes and TV commercials live. Fast forwarding reminds them of past exposures and focuses more attention on the commercial than less active viewers.

The good news for print is that it is more effective than TV or online at creating purchase intent. It also produces a higher sales lift per dollar than money spent on TV alone. But don't discard online ads. It's a question of how you use the medium. Online advertising also works. A study based on collaboration with loyalty cards found that online generates a higher lift per consumer exposure than display, but that display - because of its large reach - produces a higher overall lift.

However, display and search used together produce a higher lift than the combined effects of using either separately. The research also revealed that the average lift from online matched and often exceeded that from TV for packaged goods.

The unanswered question though is how best to allocate funds amongst different media genres, and the full implication of growing consumer use in America of search and social networks.

Finally, the major concern about the decreasing impact of TV is, however, not founded. The medium is still a very effective advertising tool. Once again it depends on how you use television, and the creative idea.

Marketing is effective, but . . .

As the world of business becomes more competitive and more new products are launched, marketing has come under increasing pressure to deliver. As a result, the science of marketing has grown in importance.

However, marketing will never fulfil its role in a company unless there is complete buy-in from senior management and department heads. They all need to believe that the concept is a valid business tool, and important if the company is to achieve growth in a world where the playing field changes daily.

Too few company chiefs fail to understand that marketing only works when there is a strong link between research, production, sales, distribution, and service delivery; and when there is a constant flow of information between these divisions. Marketing is influenced by consumer, behaviour, competitive action, and government. As such, it is a variable which has to be fine-tuned to remain relevant to market conditions if the company's business plan is to stay on track.