Carmakers race ahead
Retailers, cellphone networks and automakers set adspend pace
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
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.