Car­mak­ers race ahead

Re­tail­ers, cell­phone net­works and au­tomak­ers set ad­spend pace

Finweek English Edition - - Advertising & marketing - BY TONY KOEN­DER­MAN tonyk@fin­

RE­TAIL­ING AND CELL­PHONES were where ad­ver­tis­ing’s big spenders could be found last year. How­ever, it was the au­to­mo­bile in­dus­try that showed the big­gest growth. In a year when over­all ad­spend grew by just over 17%, ac­cord­ing to Nielsen Me­dia Re­search, our big­gest spen­der over­all – Unilever – ac­tu­ally re­duced its ex­pen­di­ture but still held on to top spot in the ta­ble.

But Vo­da­com and Cell C, fac­ing an en­vi­ron­ment where mo­bile num­ber porta­bil­ity was in­tro­duced, al­low­ing users to switch their net­works while re­tain­ing the num­bers, both upped the ante con­sid­er­ably. Cell C, in par­tic­u­lar, in­creased its ad­ver­tis­ing in­vest­ment sig­nif­i­cantly, lift­ing it from 13th to sixth place. How­ever, the third net­work – MTN – in­creased ad­spend by only 14%, per­haps re­flect­ing the pe­riod of un­cer­tainty it has been through as a re­sult of ad agency changes. It re­placed its creative agency, TBWA Hunt Las­caris, with The Jupiter Draw­ing Room; and soon af­ter that its me­dia agency, OMD, re­signed. That gap has not yet been filled.

The Nielsen Com­pany mea­sures ad­spend by count­ing col­umn cen­time­tres or sec­onds of air­time and then valu­ing th­ese ac­cord­ing to the rate card. That gives a good in­di­ca­tion of the ex­po­sure value of each com­pany’s ad­ver­tis­ing but isn’t an ac­cu­rate re­flec­tion of the ex­pen­di­ture of those com­pa­nies.

First, it doesn’t show the ef­fect of dis­counts – and very lit­tle of ad­ver­tis­ing th­ese days is sold at pub­lished rates. Sec­ond, it mea­sures me­dia ad­ver­tis­ing but not non-me­dia ex­po­sure, such as spon­sor­ship, di­rect mar­ket­ing, pro­mo­tions or pub­lic re­la­tions. Third, it doesn’t ac­count for pro­duc­tion costs, which typ­i­cally would be any­thing be­tween 10% and 20% of the me­dia pur­chase.

The lead­ing re­tail­ers also in­creased their out­lay by big per­cent­ages, re­spond­ing to SA’s con­sump­tion-led eco­nomic boom. Sho­prite Check­ers and Pick ’n Pay both in­creased by more than av­er­age, but oth­ers were less ag­gres­sive. JD Group, Spar and New Clicks were be­low the ad­spend av­er­age growth, while Ed­con showed a mar­ginal de­cline.

How­ever, ve­hi­cle man­u­fac­tur­ers went wild. Though they’re lower down the ta­ble in to­tal out­lay, they put on a mas­sive spurt as ve­hi­cle sales soared. Ford’s spend (the big­gest among au­tomak­ers at R224m) rose 45%, Volk­swa­gen’s grew 40% and

Ve­hi­cle man­u­fac­tur­ers

went wild.

Hyundai’s 98%. The big­gest au­to­mo­bile ad­ver­tis­ers were Ford (12th over­all), Toy­ota (29th; R127m), Gen­eral Mo­tors (31st; R116m), Hyundai (34th; R91m), VW (37th; R88m) and Daim­lerChrysler (41st; R84m).

In­ter­est­ingly, na­tional Gov­ern­ment – which two years ago was the sec­ond big­gest ad­ver­tiser – in­creased its spend by only 8% and fell to 16th. Gov­ern­ment ad­ver­tis­ing is, of course, very de­pen­dent on cycli­cal events, such as elec­tions and po­lit­i­cal or health de­ci­sions to run cam­paigns con­nected to HIV/Aids or in­come tax pay­ment.


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