Marketing and advertising will be driven by 9 dominant trends this year.
First, the number of marketing department staff dedicated to digital projects will increase. On average, SA companies employ 16 marketing professionals in their marketing departments, about 21% of whom are digital marketing specialists. (This number will vary according to the size of the company: the larger the corporate, the greater the number of marketing professionals.) According to the Scopen Agency Scope 2017/18 SA survey, more digital needs will be identified in 2018, and the number of digital specialists will therefore increase this year.
Second is the trend towards in-house versus agency marketing. In 2017, more work was taken in-house by marketers, following the general global trend of the past two years. Speed, costs and intellectual property have been the main drivers of this trend especially when it comes to branded content. It’s a trend that looks set to continue unless agencies can find faster and more affordable ways to provide creativity and content.
The third trend relates to the growth of independent agencies. Last year, new, independent advertising agency networks emerged outside of the top five holding company networks. The two most notable were picked up by the Industry Agency Search & Selection Company at the Ad Forum Summit in Paris in October: VCCP, a micro network backed by an investment fund; and Serviceplan, a German family-owned agency network. The emergence of these independents will create more challenges to traditional agency models over time.
In addition to these, there are agencies within the network of smaller holding company MDC – such as 72andSunny and Anomaly – that have created their own specialised micro networks that act independently and are free of the bureaucracy that is seen to be stifling growth and independence in the top five holding companies.
From a local perspective, Agency Scope 2017 research confirmed the 2016 findings that SA’s independent agencies are well respected within the industry and among clients in general. They have enjoyed growth over the past 12 months despite the struggling economy, and their levels of client satisfaction are higher in general than those experienced by the larger agency networks.
With consultancy firms such as Accenture buying agencies, mainly in the digital sector, we are seeing new competitors for agencies in the global marketplace – the fourth trend. This is not as pronounced in SA – yet – but we believe there is growth potential and it will be interesting to see how it plays out.
Fifth, marketing and advertising spend will evolve. Growth in digital spend by marketers has increased from 18% of the total marketing budget in 2016 to 24% in 2017. The global benchmark is 28.3%. We have all seen the effect this has had on the print media already. This trend will continue, according to Agency Scope 2017.
A growing trend – albeit not a new one – exists around content management. Advertising now has to satisfy the needs of many platforms, and production costs have had to adapt accordingly. These days, if a television commercial cannot be inexpensively cut down and used for other platforms, then it is not viable within the marketing budget.
Over the past three years, procurement departments’ involvement in marketing has been increasing. Procurement departments are now involved in 46.2% of all negotiations between marketing professionals and their agencies. Agency Scope 2017 puts the global benchmark at 60%, making this a trend that will continue.
The trend around pitching won’t change – 77% of all agency selection processes in SA are done through a pitch, which normally includes strategy and creative elements.
Finally, though clients are generally satisfied with their agencies, 19.4% indicated in the research that they would be changing their agency in the next 12 months. The global benchmark is 15.1%, which leads us to believe that the SA figure might be driven by the poor economic conditions and the need to continuously watch budgets.
McDowell is CEO of the Independent Agency Search & Selection Company