Covid flatline ticks into life for advertisers
This media agency has picked up fresh optimism among advertisers ahead of the festive season and reports that cut-price opportunities are available, particularly in outdoor advertising and radio
As the economy comes to terms with more relaxed level 1 lockdown restrictions, a leading independent media agency is reporting a new spurt of optimism among advertisers.
Mediology’s founder and CEO Ana Carrapichano says there is strong evidence of incoming briefs, more work from existing clients and invitations to pitch for new business.
Media agencies are generally an excellent barometer of economic confidence as they pick up early signs of activity. Brands, particularly those selling consumer goods, will be leaders in final-quarter advertising spending as the festive season approaches.
Carrapichano says consumer attitudes towards advertising have shifted and now favour brands that show genuine compassion and communicate relief efforts through informative advertisements. She cites a survey conducted among US consumers early in May by the US ad-industry group The 4A’s and market research firm Instapanel that found consumers want to hear positive messages from brands. Most respondents — 64% — said a brand’s advertising during the pandemic would influence their decision to use that brand in the future.
One of the key issues facing media agencies during the past two quarters has been how to persuade brands to remain media active. Notes Carrapichano: "The role of a media agency is to help solve business problems. By improving business results for clients, agencies should be seen as an investment — especially right now."
She says digital advertising has experienced another big jump in recent months and digital skills are critical. "Businesses have had to rely on their digital channels to drive their objectives over this period and will continue to do so. The retail industry in particular has had to rethink its entire digital offering."
Carrapichano says successful media agencies are those that show agility and she believes independent agencies, such as her own, are in a stronger position than multinationals.
Mediology recorded a 37% increase in revenue in the year to March, largely due to its digital division, and since the lockdown was imposed it has won new business in excess of R60m.
"We are able to make decisions without delays and there is no onerous pressure from a multinational group hanging over our heads. Multinational groups are setting growth targets of 15%-20% for 2021 and this is an ambitious target when budgets are not increasing at the same level."
She says the pandemic has heralded a new way of doing business. "There is an empathy, and I believe collaboration between all parties has increased. People are going the extra mile with service levels increasing, but I don’t see major shifts in budgets happening in the immediate future."
Carrapichano believes advertisers now feel more comfortable about investing again. "But I foresee 2021 will be a tight year, brands and business owners will continue to be frugal and act smartly with any investments made. There is no room for unnecessary luxuries."
She says some of the best value now is on radio, where rates are being cut up to 50%, and in outdoor advertising, where discounts of up to 65% are available.
Media owners, having been hit by budget cuts during the lockdown, are trying to make up for lost revenue. "This means they are more flexible and open to negotiation. Deals are available across all media channels," she says.
Outdoor in particular offers a long-term strategic opportunity — landmark sites that are not available in normal times can now be bought at lower rates. Campaigns can roll out over long periods, safeguarding the investment.
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