Agency Scope SA 2023-24 field work to begin

For the fifth time in South Africa, Agency Scope researchers are ready for the fieldwork required over the next four months to gather the data that will culminate in the collation, analysis and publication of a body of work that brings to light what marketers really think.

The face-to-face interviews - approximately 60 minutes in length per professional interviewee - results in a non-biased, academic-style view of the facts for the Agency Scope report

For the fifth time in South Africa, Agency Scope researchers are ready for the fieldwork required over the next four months to gather the data that will culminate in the collation, analysis and publication of a body of work that brings to light what marketers really think.

Fieldwork will be completed by the end of August and analysed in September, for presentation of reports at the end of October.

Johanna McDowell, Scopen partner and CEO of the Independent Agency Search & Selection Company (IAS), notes that this time, the team is aiming to do far more interviews with CMOs, CTOs and companies in a more robust, broader sample to ensure Agency Scope relevance as the marketing and communications industries change.

Quality of the research

“The quality of the research team is unmatched in this sector,” she says.

Four experienced women with long-term business experience make up the team.

“The value of professional researchers who are not involved in our industries is that their face-to-face interviews - approximately 60 minutes in length per professional interviewee - results in a non-biased, academic-style view of the facts,” states McDowell.

The team is geared to ask the questions that delivers the kind of information that sets Agency Scopeapart, McDowell adds.

“Sample sizes have grown over the last four waves of the study and we’re looking to increase both the number of companies and interviews per company. It’s important to keep innovating,” she says.

“Last year was the first time we interviewed media owners and we’ll be doing so again this year.”

Methodology

As with the previous study, the Agency Scpe’s research target base includes leading marketing professionals and decision-makers in the communications industry from the largest companies by adspend.

The base covers those professionals in companies, creative agencies, media agencies and media owners.

Says Cesar Vacchiano, president and CEO of Scopen International: “Both in South Africa and globally, our interviews with industry leaders are guided by industry trends and what marketers think about how these are impacting their industry.

“As part of the 3,000-plus marketing professionals and around 8,000 marketer-agency relationships analysed and tracked by Scopen, South Africa brings increasingly important information to our global feedback.”

Vacchiano and McDowell believe this year’s Agency Scope study will be one that puts figures to the changes the industry has seen since 2022 as well as the overall impact of changes in the way marketing professionals across the board are working with their agencies.

Media auditing and assurance: Would you buy a car off its spec sheet?

It’s not a question of reliable information as much the client not having a complete understanding of the sector and what a really good deal looks like.

Media agency pitches without media auditing and assurance are hollow, time-wasting, and could cost big money in the long run when marketers are faced with the number of decisions a large spend involves.

This is the word from CEO of the Independent Agency Search & Selection Company (IAS) and SCOPEN partner, Johanna McDowell, who adds that for the best media agency selection to take place in a level playing field, the audit is essential.

“Consider a media agency selection process where there are four media agencies pitching. How does the client evaluate the best deal, when it’s not just about price, but about rebates, early-booking advantages, tools the agencies are using, the whole spectrum of the media ecosystem? For many clients, it’s a mystery – and one they must take at face value unless they have quality assessments on the offers in their entirety.”

Reliable information

Noting that media agencies are highly professional, McDowell asserts it’s not a question of reliable information as much the client not having a complete understanding of the sector and what a really good deal looks like.

“We realised many years ago that the most valuable information a marketer can get is gleaned from a media audit,” she says. “There is so much ‘unknown’ within the media industry – not just with regard to media buyers, but also with media owners – that there had to be a way of demystifying the components of the process.”

Take, for example, a bank is pitching out its media work after the average four-year relationship with their agency. Their media spend is generally a hefty one and the bank – like all clients – wants to be assured it is getting the best possible deal. Questions include, “What are my rates going to be? What sort of deals am I going to get? How will we maximise our money, over and above the media strategy?”

Money often wins the pitch

Media agencies approach media owners – likely all the same media owners – to negotiate the kind of deal most beneficial to their client, McDowell suggests. “Each will be quizzing the same TV, radio and outdoor media owners but very often what wins a pitch when it comes to media is – like it or not – the money.”

So, how does the client check that they’re getting the best possible rates, and not just an agency undercutting others? “Auditing and assurance is not just about the cheapest rate, but optimal value all round. There’s far more to the discussion than the fee structure.”

Now add digital to the mix

An added – and burgeoning – layer clients need to navigate is digital media, which is vastly more complicated, owing to the sheer amount of technical application that the media agencies provide not just in buying the media, but managing the campaigns.

“Professional media auditing and assurance process does all this. In a pitch situation, we evaluate the rates and special opportunities media owners have proposed, and advise clients on the intrinsic value of those breaks as part of the package,” says McDowell. “This includes considering the costs of the technical aspects and tools required for the various platforms such and television and digital; whether each is actually required; and where there may be could cost savings in the process.”

She further highlights the difficulty for clients to do this, and the near impossibility of undertaking it as part of a pitch process without any media auditing. To present all this cost- and time-saving data, the IAS, in partnership with the Eley Consulting Group, includes a specific framework so both parties are provided with complete transparency throughout the pitch.

Lag on ROI

Eley consultant Richard Edwards says: “Not only does this enable us to give clients the assurance that their money is being well spent, it also means we can suggest a more profitable direction for the agency to take if their return on investment is lagging.”

A media agency pitch without media auditing involved is like buying a vehicle based on the brand’s spec sheet. Says Edwards, “It must be clear that this process is about having the unbiased assurance that optimal performance – in offline or online media – is being reached. It makes no sense that a marketer would not want that.”

He adds that including a media assurance step in a pitch process is not a costly exercise at all and well worth the expense whether the media spend is large or small.

For global brands and businesses, media auditing and assurance is unquestioned as part of any normal pitch process. “We’ve conducted it in South Africa with extremely effective results, where it professionalised and demystified the whole process,” McDowell adds.

Here, Edwards notes that improvement is always a good thing, especially where it results in time and cost savings. “Our audits may not always mean cheaper media in cash terms, but will certainly ensure an agency is delivering as rich a schedule as possible.”

Watch Johanna McDowell, CEO of IAS, on this subject here

Part 2: Chile Agency Scope Study shows data is increasingly important

Scopen's fourth edition of its Agency Scope study in Chile has shown an important change in terms of the remuneration model, with a significant decrease in the number of advertisers who declare they remunerate their creative agencies by Project (7% in 2023 vs. 22% in 2019). A figure that makes sense considering that most relationships are continuous over time.

The most used remuneration model continues to be an Annual Fee (80% in 2023 vs. 87% in 2019) set at the beginning of the year.

Followed by remuneration by Commission on media investment (online/offline) (9% in 2023 vs. 15% in 2019). In general, in this edition, we find fewer mixed models than in 2019.

In the case of media agencies, the percentage of remuneration through an Annual Fee is lower (64%), however payment by Commission rises (38%).

Remuneration by Project is 5.5%.

The ‘ideal’ agencies: Data increases its importance

The main characteristics that interviewees mention when defining their 'ideal' creative agency are, firstly, Creativity / Innovative Ideas (39%), followed by Digital Capacity (29%) and Knowledge of the market, customer, brand (28%).

Amongst media agencies, in the top five positions, Data / Research / Tools / Measurement / Modeling, the Team of Professionals and Knowledge (media, market, client, brand) stand out - dropping considerably compared to the previous edition - Strategic Planning and Proactivity / Initiative.

Less pitches in selection processes, but still above the global average

Marketing managers in Chile mostly use Pitches (78% - seven percentual points above the global average), as their main method when selecting both creative and media agencies.

Followed by International Decision (14%) and Selection by credentials (12%).

At an international level, China is the leading country in the selection of creative agencies by Pitches, with 95% of the processes carried out through this system.

On average, marketers in Chile, summon a total of five agencies, which seems like a high figure, as it is considered ideal to include only three.

Among the vital criteria during the selection process, we see differences, whether we are talking about a long list, a short list or the ones to finally win the account, but, generally, in the case of creative agencies, Creativity and Strategic Planning would lead the ranking.

In the case of media agencies, Digital Capacity, Negotiation and Purchase are the three that are most mentioned.

When it comes to the selection of creative agencies, the Creativity of the ideas presented has increased 15 points in the last four years as a decisive factor, already reaching 68% of cases.

Even so, the winner of a pitch is usually chosen for its Strategic Capacity (81%).

In all the indicators, marketers seem much more committed to creativity and innovation, even acknowledging that, until now, they had been quite conservative.

More than half of the marketers interviewed (65%) affirm that their company's procurement department is involved in the selection processes, doubling 2019´s figure (33%).

Some advertisers still recognise that their procurement departments only get involved at the end, during the negotiation phase, which is a problem as they are unaware of the briefing and the agencies performance throughout the entire process.

Satisfaction levels improve in comparison to the previous edition

Marketers in Chile are satisfied with their agencies, but recommendation rates are the lowest in the region.

Therefore agencies have the challenge of further demonstrating their value and their contribution to the growth of their clients' businesses.

In the opinion of Chilean marketers, the creative agencies they work with contribute 35% to the growth of their businesses (in 2019 it was 23%).

In the case of media agencies, they speak of a contribution to the growth of their businesses of 38%, a much higher percentage than what clients declared in 2019 (24%).

Regarding the quality of the service provided, both the level of recommendation (The NPS -percentage of prescribers minus that of detractors- goes from -22 to -10) and the level of satisfaction increased from 64% in 2019 to 71% in this edition.

For media agencies, clients´ referral rate to other colleagues and friends is 7.2 (on a scale of 0-10), the same they declared in 2019.

The NPS of all agencies is -6.8, being one of the markets analysed where there is a lower NPS (although improved in comparison to 2019, when its value was -17.4). 68.5% of marketers in Chile state that they are satisfied with the service they receive from their media agencies, thus recovering several percentage points that they had lost in 2019 (62%) compared to previous editions. Only 6% declared dissatisfaction.

Companies, campaigns, festivals and professionals that stand out in the industry

Coca-Cola, WOM and Apple occupy the top three positions as the most admired companies for their marketing and communication in the last two years (they were also the most admired in the previous edition of the study, in a different order).

Regarding the festivals and awards in the sector that are most valued by marketers in Chile, Effie Awards (58%), Cannes Lions (21.8%) and Festival ACHAP (7.3%) are those that appear in the three first positions.

You may be interested in reading CHILE: 3RD LARGEST MARKETING-COMMUNICATION-ADVERTISING BUDGET

Chile: 3rd largest marketing-communication-advertising budget allocated to digital

Scopen has concluded the fourth edition of its Agency Scope study in Chile and found that digital investments continue to grow, with marketers in Chile currently dedicating an average of 2.6% of their turnover (sales) to their communication / marketing / advertising budget, in line with the global average.

This figure is closer to the investment in mature markets than it is to investment in emerging markets (where it is closer to 5%). When marketing managers explain the distribution of their budget among the different disciplines, they talk about ATL (37%), BTL (14.5%) and digital (48.5%).

Digital has tripled its figure in the last nine years (2014=14.9%, 2023=48.5%), growing, especially, in the last three years, during which agencies have strengthened their teams and capabilities.

Among the countries in which this research is carried out, Chile is the third market with the largest marketing-communication-advertising budget allocated to digital.

This ranking is led by China where 50% of the budget is allocated to actions with a digital component. Of the different digital specialties, slightly more than half of the budget is invested in paid media (28%) and social media (26%). Chile still invests less in social media than other markets and the investment in e-commerce and marketplaces is still very much in its infancy.

Key findngs

An average of six agency partners to solve the marketing-communication-advertising needs

Each marketing manager in Chile works, on average, with just over six agency partners that solve their Marketing-Communication-Advertising needs: advertising agencies (2.5), BTL agencies (1.2), media agencies (1.0), digital agencies (0.9), PR agencies (0.6) and marketing consultants divisions (0.2).

Greater desire to work with integrated agencies in the future

53% of marketers interviewed work with specialised agencies in different disciplines (advertising, BTL and digital), while 38.2% work with integrated agencies (which solves multiple needs under just one roof).

The remaining 7.9% state that they work with both types of agencies.In Chile, the relationship model they want in the future does not coincide with the current reality, since advertisers’ desire to work with an integrated agency is larger (55%).

At an international level, we observe a group of countries with a greater desire to work with an integrated agency in the future (Argentina, Brazil, Chile, Mexico, Portugal and South Africa) and another, in which the desire to work with specialised agencies is higher. (Colombia, Spain, UK, China and India).

The latter are complex markets, in which specialisation is justified, mainly, by the need to have a greater number of different specialists: digital, data, or technology companies.

Long relationships between advertisers and agencies

The average length of an advertiser's relationship with their creative agencies is 5.3 years, a figure above the world average (4.4 years). Among the rest of countries analysed, we find Portugal to be the market where relationships are longest (6.4 years on average) and China to be the country in which the advertiser-creative agency relationships are shortest (3.1 years).

In the case of media agencies, the average duration of the relationship is slightly higher - 5.4 years.Chilean advertisers build longer relationships than in other markets, and data indicates that long-term relationships produce better results.

Worldwide, Chile is the country with the highest number of continuous relationships over time (90%), a figure similar to that registered in 2019 (88%).

Only 10% of those interviewed state that they work by project (12% in 2019), a figure that has fallen because of the pandemic. In contrast, China is the market where there is a greater number of advertisers who work with their agencies by project - 51% (47% in the previous edition).

Advertisers solve fewer needs internally

When asking marketing managers about the communication, marketing and advertising needs that they solve internally, they state that they do so to a lesser extent than they did in the past. Mostly, they trust their agencies to solve their needs and only 13% say they solve some of their needs 'only internally'.

The five disciplines that marketing managers consider key are, in this order:

1. Strategic planning

2. Creativity

3. Digital strategy

4. Media planning

5. Research

These would be the ones that currently have the greatest impact on their business and in which they seek the support of external collaborators.

In Chile, the option of having a lead agency is not perceived as necessary. Taking into account that, here, a typical advertiser works with almost six agents (well below the world average - 13.9 agents), the help of a lead agency to coordinate all agents they collaborate with is not as necessary as it is in other markets.

However, it is important to highlight that media agencies are improving their positions as lead agencies (six media agencies appear in the top 18), demonstrating that they also have sufficient capacity to accompany their clients´ Marketing-Communication-Advertising teams, as relationship leaders.

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Tech tock: Timing and customer experience are what count in a hi-tech world

The most impactful takeaway from the AdForum Worldwide Summit which took place in New York in April is how technology in marketing and advertising is changing everything — for the good. It’s no longer just about producing content and being digitally savvy; agencies have, or should have, been doing that for years.

Now it’s about understanding precisely what technology can do to improve the brand experience, the relationship of the consumer with the brand, the way in which a company is taking that brand to market and the development of e-commerce.

Today’s consumers have access to brands with a point, a click and payment, and rarely need to leave their keyboards. In dealing with large e-commerce operations, it’s clear that besides one or two items that require to be tried on, there is little need to visit a brick-and-mortar store.

What this translates to from a marketing perspective is how brands are going to distinguish themselves through technology, create an exceptional customer experience (CX) and make certain they are selected from a huge pool of choices.

This has made the role of an agency today far more complicated than it ever has been. Agencies have to be able to do so much more for the marketer. The “big idea” is no longer the pinnacle of a campaign; now there are many more layers of both tech and creativity that agencies have to understand for a campaign to be effective.

One big question now is: how are consumers relating to brands and the information they’re receiving about the brand? And where are they getting that information from? Consumers aren’t conscious that television and out-of-home advertising is above the line, and that streaming is considered digital. It doesn’t matter to them — what’s important is that they are receiving the information in a way that meets their needs.

The diverse choice technology is able to create is exceptional, but the complexity it brings for agencies is huge. Twenty years ago we had TV, outdoor advertising and radio and brand trackers. Today the number of messages a consumer is getting every day about a brand is virtually uncountable, but at the same time consumers can be, and are being, tracked.

The psychology of this will be interesting for generations to come, but the real challenge for agencies and marketers now is that chief marketing officers (CMOs) have so much more to do than merely winning the next marketing campaign. They’re expected to understand the entire business, continue to grow its success and work closely with the chief technology officer to ensure ongoing learning and understanding of new marketing technology.

Do they have all this knowledge? And if they don’t, will they determine the two or three areas they will focus on that brings real value for their brands’ success?

Reports indicate the average CMO is now staying in a position for three to five years, and there’s a limit to what can be achieved in that time.

This is probably a key takeaway for me from AdForum. It made me even more conscious of the need for agencies to take the lead and provide information and direction to help clients to grow their business in a global economy under pressure.

We keep hearing that the future is changing faster than ever. Besides being another stressor, what does that mean? Essentially, it means that as technology changes, it’s difficult to even solidify a formula for best practice.

As CX alone can put some brands way ahead of others, who will win? In terms of business, the CMOs and agencies that have an in-depth knowledge of what technology can do and  take the risk of enabling their brand to be better served to the consumer are on track to win.

In a tech-driven world, however, there’s no predictable formula. Back in the day, if “everybody was doing it”, we knew it worked. Now, fortune favours the brave: the CMO who can combine the best technology, advised by a knowledgeable agency, and keep CX top of mind will cross the finish line with aplomb.

Or read online here

IAS Agency Credentials Award 2023 beefs up agency opportunities to shine

As the call goes out for entries to the 2023 Assegai Awards - incorporating the IAS Agency Credentials Award - agencies can look forward to new opportunities to showcase their credentials and talent to a panel of marketers leading up to the main event.

Having relaunched the award in 2020 in conjunction with the Direct Marketing Association of South Africa (DMASA) which hosts the Assegai Awards, the aim of the IAS Agency Credentials Award is to recognise innovation in agencies’ credentials stack – written credentials document as well as the agency culture reel.

Johanna McDowell, CEO of the Independent Agency Search & Selection Company (IAS) and Scopen partner, says that for the first time since the Award’s inception, a forum is to take place in June designed to assist agencies with how to enter the IAS Credentials Award, with Ethan September of the Direct Marketing Association of South Africa in attendance.

“Bearing in mind that the judges of the IAS Agency Credentials Award are predominantly marketers, agencies will get robust and useable feedback from a number of key marketing leaders. Standout credentials are likely to leave an indelible imprint on the minds of these marketers for possible future work opportunities,” says McDowell.

“Understanding what leading marketers look for and how they evaluate credentials is the platform from which agencies can build their offerings and reputations as the rapidly-changing market looks for solutions.”

Virtual glimpse into judge’s mindsets

Another innovation this year is a virtual judging session with the IAS and the marketers who will be adjudicating the IAS Credentials Award. It’s an opportunity to ensure all judges are aligned in their preferences, providing discussion around the winner that indicates industry consensus rather than individual preferences. “Basically, a ‘from-the-horse’s-mouth session,” notes McDowell, “designed to ensure maximum agency impact on today’s marketers.”

From the start in 2016, a credentials award was a natural fit within the categories of the DMASA Assegai Awards, and the IAS Credentials Award brought a vital feature to the Assegai’s bid to benchmark the South African direct marketing industry and highlight best-in-class examples, while encouraging all industry players to work towards achieving distinction in their credentials.

“The ultimate goal of awards is to keep raising the bar for the whole industry,” says McDowell. “With both the Assegai Awards and the IAS Agency Credentials Award sounding the call for entries before 31 August 2023, I believe that taking the opportunity for agencies to get their credentials perfectly aligned with what marketers want should make this year’s awards easier on the agencies and tougher on the judges.”

Before you pop the question, do you really want to put a ring on it?

The chemistry session goes well. You like what you see. But have you asked the questions that will ensure the pitching agency really is The One? Think of it as a pre-nup, writes Johanna McDowell, CEO of the Independent Agency Search & Selection Company (IAS) and SCOPEN partner, and one that could save a marketer time, money and heartache.

In a recent article from marketing ecosystems experts AAR Group, the long term partners of IAS, drive lead consultant Vicky Gillan highlighted the importance of agencies having robust client retention strategies.

A key issue raised by Gillan is that client retention has “always lagged behind the shiny ‘sexiness’ of new business. At least, that’s certainly always been the perception”, she says, noting that previous AAR client/ agency research showed 76% of clients and 61% of agency leaders agree that “agencies appear to value new business more than existing relationships”.

There’s the first question marketers should be posing to the agency: When the honeymoon is over and we’re all putting in the hard yards, how easily will your head be turned by the next ‘huge business win’? For this to be a solid relationship, marketers need to know the agency’s track record of client retention.

How does the agency keep a spring in its step and keep the client not just happy, but delighted? As Gillan notes, it’s easy to do when the connection is “shiny” and new. So, how long can a marketer expect the same enthusiasm for their business?

The solution is to ask about service level agreements and the agency’s policy on client retention. Also, what sort of longevity does it boast with its current clients – and would a bigger, shiner client put your business on the back burner?

Facing potential uncertainty together

As we look at what the future may bring – budget cuts, rampant inflation, a plethora of new platforms with which to engage – marketers need quality advice, robust strategy and more innovative ideas than ever. A winning client / agency partnership is one that can put a different focus on the business, noting that organic growth with current clients beats onboarding a new client every time.

The costs of acquiring a new client far outweigh the costs of keeping a current client happy. While the same amount of time and effort is involved, it is of a different sort. Nothing compares with having a history together to ensure both parties have a deep understanding of how each works.

This was proven during the pandemic, when marketers and agencies worked far more closely together, even virtually. Together they overcame uncertainty and challenges, creating great trust.

Now the pandemic is over and everyone is looking for growth, there’s a danger that if an agency is spending all its time pitching for new business, they may well be neglecting current clients.

So, what’s new?

Agencies often forget to tell long-term clients what their skills are – and these are bound to be changing all the time. They also highlight new offerings on their website, but current clients are rarely going to take a look, unprompted.

Think of it as date night – where an agency reminds clients of all it brings to the table, and marketers are able to ask about new services, because marketing to existing clients is as important as marketing to potential clients.

Viewing this important business relationship in the same way they would a long-term partnership or marriage is vital: You’re going to fall in love, get married, go on a wonderful honeymoon together… but how are you going to sustain, maintain, and grow the relationship in order to keep each other happy?

It’s not unreasonable for marketer who has put a ring on it to say, “Surprise and delight me. When I know I have a meeting with my agency that week, I want to be really excited. How will your agency ensure that the excitement continues to be there?

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL DAY Wrap Up

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL DAY 5

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL DAY 4

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL DAY 3

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL DAY 2

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 NEW YORK CITY 17-21 APRIL Day 1

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

ADFORUM GLOBAL SUMMIT 2023 New York City 17-21 April Preview

AdForum is a unique and hyper-focused event for agency CEOs to present their strategy and vision to the world's leading search and management consultancies. IAS is proud to be representing SA and Africa at this summit.

How marketers are adapting to specialisation

Getting the selection of agencies right will be paramount to success

As the number of specialised services required by marketers and brands keep rising along with new platforms that deliver target audiences, the days of the single-stop agency may well be over. If they are indeed over, what will the new-era marketing department look like?  

In recent years we’ve seen a growth in marketers’ need to engage with a plethora of new platforms, which is likely to bring with it a necessary increase in the size of marketing departments, particularly those in-house operations in large organisations in the banking and fast-moving consumer goods sectors, where a vast array of requirements must be met. 

To manage all this will require the support of specialist skills of a variety of agencies. Right now, the “silver bullet” agency that houses the sheer number of skills and expertise doesn’t exist. The pressure on marketers is increasing, not only because they must manage a plethora of different agencies, but they have to do so while managing the various needs of their own business clients.  

This trend has put the spotlight firmly on agency selection, as the appointment of the most appropriate specialist partners becomes increasingly important. It’s no longer a case of “we need a digital agency”, but rather “we need an agency with these particular skills”, across the areas of performance, lead generation, content development and other expertise marketers need to provide to the business. 

Then, as the list of required skills grows, a marketer who doesn’t have a complete understanding of both needs and potential solutions available will be unable to properly manage an agency. The layers of complexity are becoming more apparent and putting pressure on marketers, particularly in terms of time.  

For quality results, specific needs will have to be defined and agencies with the precise skills must be sought. Marketers will require guidance on how to work with the business and agencies to get the briefs right. It’s going to mean a whole lot of upskilling — and additional people. 

Over the past few years it has seemed as though marketing departments have been shrinking as a result of budgets, the economy or a shortage of skills. Now the pressure is on to repopulate these departments with the expertise that fulfil the needs of the business and the level of specialisation required. 

This applies not only to marketing departments in large companies but also to smaller companies, which often only have two or three people in their marketing departments and who must now be more trend-savvy and spend more time on defining all aspects of projects.  

It’s not going to be easy. Marketers will need assistance with identifying suitable partners in each sector, all of which will be able to work in a collaborative way so that the marketer isn’t required to spend masses of time on every project.  

Getting the selection of agencies right will be paramount to success — and the growth of marketing departments looks set to be driven by ever-increasing choices and ever-fragmenting communication channels. 

You can read this online here

Global trends show brands value collaborative agencies

Scopen President and CEO César Vacchiano has highlighted global trends in marketing and advertising from the Agency Scope studies. Vacchiano was recently in Johannesburg to present an IAS Masterclass.

Working with partners

Among the top trends noted by Vacchiano is that clients are working with an increased number of partners, as post-Covid marketing teams are smaller and the communications industry more complex with more options and platforms.

“Clients need expert assistance across more areas, and it is difficult to find one agency with expertise in every area,” he says. “Effective collaboration is becoming a challenge. In South Africa, many clients select a lead agency to help coordinate the process.

Another trend is the increasing importance of data. “Markets have had to deal with the after-effects of Covid, along with political changes and wars, making it difficult for CMOs to anticipate changes,” says Vacchiano. “We’re living in a permacrisis, an extended period of instability and insecurity. It’s a huge challenge, and CMOs want to understand trends, and rely on data around their competitors and the market.”

Here, McDowell notes that in a data-dense era, marketers are also looking for data focused on consumers and the consumer journey. “Understanding the consumer and being able to engage with them has become critical, but while many marketers have access to this data, not all know how to use it effectively yet.

“Martech is becoming increasingly important with the huge amount of data available, adding to the need for new learning.”

The importance of experience

Another vital element in the mix now is the importance of clients having senior and well prepared teams within their agencies. Says Vacchiano: “Clients realised that through Covid, they were often dealing with junior agency staff members, likely due to marketers putting pressure on agency fees.

“Now, clients want more involvement from an agency’s leadership team. It’s also clear that the independent agencies appear to deliver on access to leadership better than the large network agencies, which may be important for larger agencies to note.”

Saving the biggest – and most rapidly changing arena – for last, Vacchiano and McDowell agree that the pandemic accelerated the growth and implementation of digital, and the importance of investing in this sector.

“Agency Scope studies show that agencies globally did a better job than marketers at investing in digital capabilities and the hiring digital talent or the acquisition of digital agencies,” Vacchiano asserts.

McDowell adds that agencies as a whole are in a better position when it comes to digital skills and Martech than they were three years ago. '

“Marketers are lagging and relying on agencies to provide the expertise in this area,” she says. “In South Africa, it’s clear that those agencies who are able to collaborate with other digital agencies or set up in-house facilities are becoming far more attractive to the client.”

These top five trends have shaken up marketing and agency relationships overseas, and the same is already being seen and felt in South Africa, says McDowell. “We look forward to our researchers’ data coming in as Agency Scope SA 2023-2024 makes headway from May.”

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Why South African agencies and marketers should embrace media assurance auditing

Budgets are tight, and rumours of a recession circulating. Which, of course, means marketing, media and advertising budgets will come under pressure.

To reassure clients their money is being well spent, their campaigns are effective and their return on investment is positive, media assurance auditing will play an increasingly important role.

A recent partnership between South Africa’s Independent Agency Search and Selection Company and Eley Consulting in the UK offers campaign effectiveness analysis by facilitating independent scrutiny of media expenditure. The system is designed to review all areas of a brand’s expenditure across all platforms. Ultimately, it helps markets and media agencies to assess best practice, good governance and compliance. 

Eley consultant Richard Edwards says it is difficult to generalise about agency capabilities in a market or region. “As far as their specific knowledge of media audits is concerned, it is fair to say that South African agencies are not as accustomed to being audited as agencies in other regions – particularly Europe, where media auditing is most prevalent,” he says.

“However, it could also be argued that this is a positive thing – agency/auditor relations have become fairly combative in many markets, with big clients focusing heavily on price and pitching their business on a regular basis, aided (some would say egged on) by the big audit firms,” he adds.

Edwards believes South African agencies are less suspicious of auditors and more open to developing a constructive relationship with them.

“At Eley+ we would argue that this suits our style of auditing – we are keen to engage with agencies in three-way partnerships along with their clients and, wherever possible, add genuine value through the entire media cycle, from strategy to buying, rather than simply tick boxes,” he explains.

“This may well be one reason why the larger audit firms have never made real inroads into the South African market – they simply don’t have the patience to engage with a market in which client/agency relationships are often close and long-standing, and auditors need to take time to understand their clients business and work out how they can offer constructive services that benefit all parties.”

Pace of change

Edwards admits media audits have struggled to keep up with the pace of change. “Media auditing is still heavily wedded to an analogue and TV-centric media world and auditors have struggled to develop products that genuinely help clients optimise their digital media investments,” he says.

“Media auditor’s service offerings are dominated by pitches these days – clients pitch their business, elicit media guarantees from their agency and then measure these over (typically) a three year period. This means that media price and quality is generally managed on a year-on-year tracking basis – you compare the current year to a baseline and produce a savings number that is almost exclusively designed to deliver the requirements of big procurement departments (and drive their bonuses). This is a problem for auditors because, while it is relatively easy to measure TV price YoY, it is much more difficult to do so in a fragmented, programmatic digital world. Hence, a lot of dodgy media maths!”

Still, as a boutique consultancy, Eley+ recommends more complex products to clients, particularly in the digital space. “We believe that this approach, which usually appeals more to media and marketing teams than procurement specialists, ultimately drives greater return on media investment,” Edwards says.

In terms of frequency, those running audits for the first time should consider  undertaking them on a half-yearly basis for the first year, moving to annual audits after that. “We would argue that audit timing is the most important factor – our audits work best when they are timed to feed into the next year’s planning process – hence, a client might ask us to look at an 18-month period up until the half year (June) with a report delivered in early September that is designed as one of the kick off meetings for the next year’s planning process.”

The pitfalls

Edwards underscores the major pitfalls of not having an audit framework in place. “If you don’t measure it then you can’t control it. Simple. And no one should be marking their own homework – agencies will always give themselves top marks when producing PCRs for their clients,” he explains. “It is also fair to say that agency teams are concerned with the future – new ideas, the future planning process etc… auditors are much better placed to carefully and methodically analyse previous campaigns in order to generate learnings that can be fed into the planning process.”

The biggest risk in the digital space is the reduction in the share of media spend focussed purely on working media, Edwards says. “There are so many different agencies, tech platforms etc.. between client and media owner these days, all of whom are taking their cut, that you can get to a ridiculous situation where less than half (50%) of total budget is actually spent on working media (eyeballs). For reference, circa 90% of media budget is spent on eyeballs when you put your money into linear TV (in any market).”

On the brand side of the equation, businesses  often use auditors to help them find a media agency – usually via a formal pitch. “Once they have chosen an agency they will then typically bring the auditor in to assess the efficacy of the agency’s work. The auditor will typically be heavily involved in ensuring that the client’s contract with their agency is comprehensive and fit for purpose,” says Edwards, adding that the total media audit market is growing, which suggests that brands are generally more likely to use auditors these days than they ever have been. Again, this differs by region/market.

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#Masterclass Notes

What are marketers looking for in this time of accelerated change? With experience on the agency side earlier in her career and across Africa first at an agency and then as a marketing professional, Sithabile Maphumulo, Renault South Africa vice president of communications, was the ideal person to comment and share insights on this topic at the first masterclass of 2023.

How does the market look in 2023?

The vehicle market has been quite robust in recent times, primarily because owning a vehicle in SA is a necessity due to the lack of public transport; in other markets, owning a vehicle could be seen as a luxury. Growth is expected to continue as the automotive industry becomes more and more innovative, such as building an insurance product cost into the ownership of a new car.

Brand purpose has become more and more important, and this is also expected to increase further.

How can agencies help clients be even more effective in 2023?

Understanding the needs of marketing in terms of driving sales harder is one way that an agency can help clients be more effective. At the same time, agencies need to develop knowledge of the competitors; understand the long-term strategy of the business at hand while setting milestones to assess the effectiveness of the strategy and communications that accompany it; and understand how to lift brand sentiment and creat work that will help the brand achieve that.

Trust is a critical success factor in a client-agency relationship and that includes the ability to push boundaries and step out of comfort zones. Clients look for agencies which won’t be “yes people” but will rather lead clients into new areas or possibilities that will be relevant for their brands and help them to grow.

How can agencies work better/collaborate with each other across a client’s marketing ecosystem?

This was an interesting discussion. Collaboration among agencies could be likened to working in a case-study group during an executive education programme. How does a group let each expert in their respective field shine, similarly with agencies in a typical marketing ecosystem?

First, and most importantly, client responsibility is to provide a clear brief with clear deliverables for each agency in the system. Muddling up those work streams can cause endless problems and frictions among the agencies, which results in poor delivery for the client.

To brief all of the agencies together at the outset of the project or campaign is another critical success factor; don’t only bring in the BTL or social media agency at the last minute once the big idea has been cracked. We all know that a big idea can come from anywhere and that it’s certainly not the domain of the ATL or lead agency only.

Perhaps, when the agencies come back with their various solutions, it’s best for the client to listen to each of their agencies one by one, instead of all together. That seems like best practice in this situation. Trust, again, is an important part of this collaborative process.

Tips during pitching — “inside a review”

When clients are reviewing agencies in a competitive pitch situation, there are some important aspects that clients consider and which will tip the balance for an agency to be selected:

• Shared values

• Governance

• Demonstration of abilities, rather than ‘hard sell’

• Chemistry, and

• The quality of the team who will work directly on the client’s business, as well as the agency’s overall reputation.

Taking the pain out of an account handover

The pitch is over, a new agency has been appointed and the incumbent agency has to hand over – this is when the going can get tough. 

When a client chooses a new agency, it’s usually a trying time for the previous one. The new firm is looking to get started as quickly as possible, and the client has likely got a string of briefs to give the winning agency. In short, it’s the easiest time for things to go wrong, unless all participants follow best practice from day one.

The process requires a lot of thought, time and effort to get right, and one misstep can result in an outgoing agency being contacted for months after the handover with requests about previous work. To save all parties time and angst, a single point of contact is crucial to ensure previous work is available and to be able to answer everything the incoming team may ask.

All four parties should ideally meet at the client’s office – suggesting otherwise is not only unprofessional but also bad practice. The two agencies will be more comfortable outside of each other’s space.

These meetings are best conducted in person, and not online. Teams, WhatsApp, e-mail, WeTransfer – regardless of how popular – do not provide the security required by most companies exchanging data or the assurance that all the data arrives in order.

Data privacy and compliance requirements must be met too. Using a variety of online platforms cannot guarantee that, especially as every item must be copied twice. That’s why we recommend saving all the handover documents onto a hard drive for the client and then duplicating it for the new agency.

At the in-person meeting, the outgoing agency’s printed list describing everything that can be found on the hard drive can be checked. This means the client or the new agency, or both, will be able to ask questions immediately if something sounds amiss. Naming conventions, date and time indications and anything else that makes finding work from a few years ago easy should be used.

If this sounds pedantic, it is – and for good reason. If there are outstanding items, the outgoing agency will note and then copy the required documents and re-save them to both hard drives. But this rarely happens, and if the preparation has been done properly before the meeting, what sounds like an ordeal should actually be painless.

An independent party is able to facilitate a painless process, reduce any potential animosity or unpleasantness and, worst of all, delays.

So, with hard drives in hand, the responsibility becomes that of the client and the new agency to make time to check that they can pick up the work and run with it as quickly as possible. The history contained on the hard drives will show how the account was run and what work the client had in the past, often including years relating to specific brands.

With access to this in one place and a touchpoint to contact with queries, the new agency is able to start work with speed and the original agency need not spend unnecessary time on a previous client.

Though a handover means a client lost for one party and one gained for another, it does not have to be an unpleasant, time-consuming experience.

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Agency Scope SA: Divulging what marketers really think

With the fieldwork for Agency Scope South Africa 2023/2024 set to make tracks in May, the biennial study, which ultimately divulges what marketers really think, takes some interesting twists and turns as the scope of the communications sectors adapts to the pandemic, technology and global developments.

Scopen president and CEO César Vacchiano notes that an increased number of respondents will be interviewed this time around, with sights set on 220 client companies, compared to the 158 in 2021.

In-depth info on sustainability and diversity, equality and inclusion (DEI)

“There will also be more interviews with marketers including – importantly – companies from the new economy,” he says. “Look out for the dot coms, startups and digital platforms.”

Participants now also include chief technology officers (CTOs), chief innovation officers (CIOs), heads of digital companies, and those working in the all-important customer experience sector.

“Due to their importance globally, we’ll be getting in-depth info on sustainability and diversity, equality and inclusion (DEI) to add the South African market viewpoint to our worldwide knowledge bank,” Vacchiano says.

Digging deep into digital

Data will include digital platforms and digital tools and how marketers work with them.

“So, this focuses on how they collaborate with Google, Meta, marketplaces, Twitter, TikTok and other new communication options,” he says.

He adds that that data from marketing tools, marketing automation and personalisation such as SalesForce, Adobe Selligent Marketing Cloud and Microsoft will also form part of the research, analysis and knowledge shared in Agency Scope 2023/2024.

“All those tools require investment,” Vacchiano asserts, “so working with the right partners that have the appropriate profiles who understand these tools for implementation by brands is important.

“We’ve noted that some who purchase these tools to better compete often don't know what to do with them, and how to use them for their marketing objectives. So, agencies that can assist with the tools, digital strategies and use of platforms are the ones more sought after now.”
Groups or independents? 

Large holding group versus the independent agency

Johanna McDowell, CEO of the Independent Agency Search & Selection Company (IAS) and Scopen partner says research for the next Agency Scope will also delve into the value of working with a large holding group versus the independent agency.

“The responses we’re looking for include what clients find most valuable for their needs, and what the strengths, weaknesses, and benefits are with a marketer’s choice of independent or group agencies,” McDowell notes.

Vacchiano promises a deeper research and therefore analysis on the various digital verticals related to Martech, including CRM, mobile and apps, e-commerce platforms, the Metaverse, and Web3.

“We want to explore which of these are important for clients and, of course, which they are they investing in - if any,” he says.

“The value for our subscribers will centre around what type of companies the C-suites and business leaders in our industries are working with and how they work with them. Equally important will be how they evaluate these new disciplines.”

About that captivating talent...

McDowell says another area growing rapidly in importance is how respondents value a good professional team.

“Does the talent employed by a specific agency make a difference? Which agencies have highly recognised leadership and does this influence the agency selection process?

“Sometimes individuals captivate a client due to their strategic vision, their ideas and innovation, or – these days – their understanding of digital and MarTech. These individuals can help transform brands and businesses and we’d like to hear their value from the horse’s mouth.”

With the Agency Scope researchers raring to go, Vacchiano says his hope is that this information gives participants some early insight into what they’ll be required to respond to.

“Respondents’ lived experience has changed over the past few years, and Agency Scope relies on this valuable insight to add the South African perspective to our depth of knowledge.”

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