TABLE: Advertising agencies and corporate clients
SERVICES - ADVERTISING AGENCIES
Boom time in the ad industry


The challenge is to find creative ways of getting the message to consumers


The R15bn advertising industry had its best year in 2005, and the growth trend is set to continue. Many of the top ad agencies reported income growth of more than 30%, driven by a bullish economy and a need to heighten brand awareness in a market becoming more globally influenced and more cluttered. More messages are competing for consumer attention and the general thinking is that only 5% penetrate the mind. That has to be a concern for purveyors of traditional advertising models.

Though business growth was phenomenal, the big question this year and beyond, is how the advertising discipline is set to change.

A younger generation of ad makers is questioning the validity of traditional platforms like television, print and radio, and are exploring other avenues: cellphones, the Internet and the clever placement of commercial messages in unusual places. Savvy marketers these days insist that a percentage of their annual adspend - anywhere from 10%-15% - is put aside for more avant garde and nontraditional ideas.

Some of the agencies on the cutting edge say that figure should increase by the same amount again. There is even thinking among the smaller shops that ad campaigns can be just as successful by eschewing traditional media options.

The upshot has been a change in mindset as far as traditional advertising is concerned. The idea is now central to the campaign and the media options are locked in around it. Previously a brief would be delivered asking specifically for work in different media types. Agencies and clients now agree that this type of instruction is not only outdated but inhibiting in terms of creative advertising.

The other trend to watch out for is how agencies are paid for their work. The industry body, the Association for Communication & Advertising, has published tough guidelines for state organisations that want to hire an ad agency.

The main thrust is that creative work presented should be paid for. It's likely that this notion will be carried through to the private sector, as ad agencies finally defend and put a price on their intellectual capital.

Risk and the reluctance of marketers to embrace it still weighs heavily on SA agencies' minds.

Clients who guard budgets often prefer the safer option: an ad that pleases the board, but has little resonance with the consumer or fails to make a meaningful impact. It's the reason so much of the country's advertising is either bad or goes unnoticed.

It all goes back to the issue of clutter. With so much commercial noise, advertising has to do something out of the ordinary. Some ad executives fear that unless the mindset changes, SA is headed in the same direction as the US, where every ad is tested to exhaustion and the result is a badly cobbled-together compromise. Ten years ago many SA consumers could list memorable ads. These days it's more difficult. It's a good marketer in 2006 that can throw caution to the wind and accept a little risk.

Marketers should also be aware of the growth of small so-called hot shops. The most noteworthy is an outfit called Ireland Davenport, which scooped the prestigious BMW and Castle Lite beer accounts last year. These agencies are returning to high-end creativity and are outsourcing other disciplines such as strategy, production, buying and planning to specialists. They will pose a major threat to some of the bigger, established agencies.


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