Category Archives: Marketing Budgets

Why You Need to Keep On Advertising

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business couple at computer In a recession, or when things are tough (as they most definitely now are), business owners and marketers tend to put a lid on their advertising spend as a means of capping their expenses. And yet, whilst understandable, it’s often a mistake to do so.

The reason that advertising is often the first expense to face the chop is that it’s the easiest thing to cut. It’s far easier to send out an instruction to your ad agency and media agency to cut, by way of an example,  TV advertising or radio advertising from a media schedule than it is to, for example, retrench staff.

History has shown that advertisers who stop advertising in recessionary periods have some catching up to do when the economy turns for the better. This stands to reason, as the advertiser who continues to advertise in a downturn will be better positioned to capitalise in an upturn as his or her advertising would have remained uppermind over time.  The advertiser who has stopped advertising will have lost ground in the minds of his or her target market. (A matter of out of sight, out of mind..)

One of the most prevalent reasons given by marketers looking to cut, or stop, advertising is: there’s no money out there, so what’s the point? Fact is, that whilst some South Africans have no money (OK, many South Africans have no money), many do..something that was brought home recently when my wife and I tried to find a week’s timeshare on the coast.  After days of searching, it became clear that there was none to be had.

How could this be, if people don’t have money? The cynic would say that they don’t have money because they spent on things like timeshare, but this rings hollow.

South Africans are spending WEEKS on holiday. And as a family who was fortunate enough to have eventually found somewhere to stay and as a result, went away for ten days, we can vouch for how much an extended holiday would cost. Eating out every day and keeping the kids entertained costs plenty. And yet, restaurants are pumping and queues at the movies or fun parks never seem to end.

Another thing that struck us is how many people have second homes on the coast: homes that cost millions. And boats, that sit idly moored to those homes..

People short of money? Certainly not all of them…

It is clear that there are many people in this country (admittedly in the upper LSMs) who have money to burn. And these are people who continue to eat, continue to drink, continue to entertain, continue to drive, continue to bank, continue to invest and continue to holiday.

Quite simply, they need to be advertised to – regardless of the state of the economy.

The bottom line is that if you’re not advertising to them, you’re not in the picture. Simple as that.

But what about the middle class? Or the lower income-earners in our country? Here a different picture emerges because they’re more under pressure, financially-speaking. That said, they still need to eat and drink, still need to buy household goods, still need to put food on the table. So they also need to be advertised to.

What marketers need to do when things are tough is box clever.

If your product is not moving, you need to think of ways to GET it moving. Discount the price, offer a “buy one, get two” offer, start a loyalty program…think out the box and get creative.

The worst thing is to put a stop to your advertising efforts. But if you have absolutely no choice other than to cut back, do it strategically. Cut back on media that you consider to be “nice-to-haves” – this might be in the form of TV advertising, radio advertising, cinema advertising, outdoor advertising, newspaper or magazine advertising – and continue with advertising that brings you response. (Digital advertising more than likely).

With people googling practically everything these days, make sure that your website is professionally optimised for search engines. You need to come up on the first page of Google when people search for the type of product or service you offer. This is imperative. It’s said that the best place to hide a dead body is on the second page of Google. Why? Because no one ever searches there. Quite simply, if you’re not on the first page of Google, you’re dead in the water.

Google Adwords are also good. If you’re running Adword campaigns, continue running them. And if they’re not delivering the type of response you expect, find someone professional to manage them.

Google Display? Also good. Keep it going.

Blogs? They work well. Blog more than you have in the past.

If your business is struggling, cut your advertising spend if you must – but at the very least – maintain a presence online. You’ll regret it if you don’t because , despite what you may believe, there ARE  people with money out there. And amongst them will be people looking for what you offer.

My name is Gerard Kavonic of This country’s smallest ad agency, Kavonic Hone and I can be reached on [email protected] and 083 444 9888. You can see what I’m about on www.kavonichone.co.za

I’d be happy to advise you.

Online Advertising vs TV Advertising vs Newspaper Advertising vs Outdoor Advertising vs Radio Advertising vs ???

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Online marketing is the way to go for the marketer with a small ad budget

With tough economic times having been with us for quite a few years, and with things likely remaining tough for the foreseeable future, advertisers need to ensure that their advertising works as hard as it can.

As an advertising person running his own agency, and having been in the advertising industry 29 years, I am often  asked called into brainstorming marketing sessions and asked for my thoughts as to an “advertising way forward”.

Whilst experience dictates that the building blocks must be present before going to market (read, logo, corporate  identity and website in the case of start-up businesses), “gut feel” is often not enough to go on these days.

The media landscape is forever changing, and it’s changing faster than anyone could have imagined. So much so  that even experienced advertising-types are battling to keep up. Whereas in the past one could look at a brief and think “TV advertising” or “Radio Advertising”, today, things are not as clear-cut.

Fortunately, there are now analytical tools, data, forecasts and research available that can remove much of the guesswork and help marketers arrive at better decisions. That said, the following excerpt from a Pricewaterhouse Coopers article throws up some interesting facts that may (or may not) reinforce your existing beliefs, or raise an eyebrow or two.

“Revenue generated through advertising will increase by R18 billion between 2013 and 2018, with the fastest-growing segment – online advertising – showing double-digit growth as a result of the substantial increase in Internet access over the period.

Online advertising’s anticipated compound annual growth rate (CAGR) of 22.7% will be driven by search and mobile advertising, with Google propelling the South African search market. This will grow digital to a 10% share of adspend by 2018.

Mobile advertising will be driven by an increase in smartphone penetration and the increasing number of South Africans who are becoming mobile internet subscribers is forecast to rise from 15 million in 2013 to 35.2 million in 2018.

Display advertising will grow at a CAGR of 18.8%, driven principally by the second most visited site, Facebook, while video advertising will grow substantially from a low base of R2 million in 2013 to R9 million in 2018, as broadband speeds gradually improve and internet access widens.

The second-fastest growing advertising segment is video gaming, albeit from a low base of R29 million which is expected to grow at a CAGR of 15.4% to reach R60 million in 2018. This growth will be inextricably linked to the number of video gamers who play online, as video game advertising’s main asset is its ability to target users based on their playing behaviour while online.

Radio advertising, the third-fastest growing segment, will enjoy a healthy CAGR of 8.2% thanks to radio still being widely consumed throughout South Africa.

TV advertising remains comfortably the largest South African advertising sector. It will grow at a CAGR of 6.8% over the forecast period, reaching a projected R18.4 billion in 2018. This growth will be driven by more competition and larger broadcasting audiences, as television continues to have the largest reach of any media format. A growing middle class with greater disposable income will lead to a rise in pay-TV households.

Magazine and newspaper total advertising revenues will show growth of 4.0% and 6.0% respectively, and in both cases, the advertising spend from printed editions will consume the overwhelming majority of total advertising revenues. Who said print was dead?

Printed newspaper advertising growth can be attributed to locally distributed, free newspapers which build strong connections between consumers and brands, while print magazine advertising will be driven by niche magazines covering topics like home improvement. Digital advertising in both instances is still in its infancy, but will see a double-digit CAGR over the forecast period.

OOH (Out of Home media) maintains its ground, with growth over five years forecast at 5.9%

A compound annual growth rate of 7% across all segments is a fortunate position to be in.

Despite dramatic growth of the Internet, traditional advertising media will prevail. The likes of television and radio revenues are still guaranteeing the kind of captive mass audiences that online cannot yet offer.

The tipping point from traditional media to digital media remains a long way off in South Africa, atleast in terms of revenue. Advertisers would do well to focus on the digital consumer, who may well have greater disposable income, but for the time-being, traditional media will constitute the majority of revenues”

Having read this, it’s clear that whilst online (digital) marketing is important in the media mix, it’s certainly not the only game in town: something I’ve believed for a long time. Conventional media, such as TV advertising, radio advertising, outdoor advertising and newspaper and magazine advertising are still big, and will be big for some time still.

In meetings with clients, I tend to find that the younger the client, the more adverse he or she is to advertising in “mainstream” media, whereas the older (and probably more conservative) the client, the more adverse he or she is to advertising online or participating in social media.
This is of course understandable. If you’re not on facebook or don’t “do” twitter, you’ll likely not want to advertise on them. And if you don’t watch TV, you’ll assume that not many others watch either. As a result, you’ll shun TV advertising.

This is of course problematic. As responsible marketers or advertisers, with responsibility for our brands, it requires of us, less subjectivity and more objectivity. By analysing data, by seeking out articles like the one above and by being guided by people who study media consumption for a living (rather than being swayed by our own personal perceptions and beliefs), we can do justice to our available marketing budgets and spend our advertising monies wisely.

What’s important is that we fish where the fish are. Not where we’d like them to be. We need to establish which media is consumed by our target markets, and when. Once we have a clear picture on this, we can then plan our advertising campaigns. Whilst gut-feel will always be important, gut-feel backed by research and armed with knowledge and foresight will serve you better.

By requesting the involvement of an experienced media strategist or media planner, you’ll be better positioned to see whether TV advertising might be more suitable than radio advertising. Whether outdoor advertising might be more cost-effective than newspaper or magazine advertising. Whether you should shun all of the aforementioned in favour of a digital marketing campaign. Or whether a multi-media campaign encompassing all media might be the optimal approach.

It’s all about arming yourself with knowledge, with a view to minimising risk and maximising the effectiveness of your next advertising campaign. I’d be happy to point you in the right direction if you like.

What Can An Advertiser Do on a Small Advertising Budget?

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As a small advertising agency, many of my recent enquiries are coming from small or medium sized-companies with small advertising budgets. Probably not surprising, due to tough trading conditions, in which budgets are under pressure, and my positioning in the market as This country’s smallest advertising agency (in which I’m often – erroneously – perceived as This country’s cheapest ad agency). And it’s not that I mind receiving these enquiries.

Rather, it makes me question whether a limited marketing budget of, say R30 000 per month, is actually sufficient in this day and age.

Prior to the advent of social media and the effectiveness of online marketing, a budget of this size would have been problematic – for the simple reason that conventional advertising media would have required a significantly more substantial investment to make them work.

One has only to look at the costs of TV advertising, radio advertising, print advertising or outdoor advertising these days. They’re not for the faint-hearted.

Unless a marketer has a budget of at least R1 million to spend on TV advertising, it’s probably not a medium worth considering (unless the marketer has a cheap TV commercial in mind – one that could be produced in studio – and intends only a short burst of airing the commercial).

Radio advertising? Expensive if one intends advertising on morning or afternoon drive time, but less so if not. One could probably get away with an advertising spend of R100 000-R150 000 dependent on station choice and duration of a radio campaign.

Advertising in newspapers or magazines? Also expensive, unless you have a small black and white ad in mind, or you’re looking to advertise in a Caxton paper or a trade journal.

Outdoor advertising can also be costly, especially if you’d like to advertise on a freeway or at an airport. Building wraps are also extremely costly. Whereas street pole posters and other forms of outdoor advertising are less so.

Limited advertising budgets are often difficult to work with, but for my money, I would in nearly all cases recommend an online marketing approach, in which one’s target market(s) are driven to a website through:

Google Adwords
Blogging
Remarketing
Social Media

That said, the effectiveness and success of an online marketing campaign is often dependent on the website itself. Today, one’s website needs to talk to one’s target audience. It needs to, at a glance, tell people what you’re about. First impressions count. Your website needs to stand out, be liked, be easily navigable, be built correctly and be professionally optimised for search engines.

(With “professionally” being the key word here: too many so-called online marketers today think they know about optimisation but ending up doing an average job. Far rather, get someone who understands optimisation and specialises in the field).

Once your website has been professionally optimised for search engines and has had the aforementioned boxes ticked, a Google Adwords campaign should be looked at. (Unless you know what you’re doing, get a professional in to set it up and manage it for you).

Regular blogging is also important. As is remarketing. As is social media (if done correctly). But these will be dealt with in upcoming blog posts.

The most important thing with online marketing is get someone who knows what they’re doing in to do it for you. Unless you’re really clue-d up in this area, it’s best to seek outside help. Done correctly, an online marketing campaign can do wonders for the bottom-line and a business with a limited advertising budget should look at one as a first port-of-call.

I work with some of the best online marketers in the industry. I could put you onto them if need be.

Nando’s Directional Sign – Street Pole Posters Successful Pointers

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Nando’s advertising is well-respected and well-known. Normally for stirring controversy. But between its TV ads, which invariably succeed in getting the brand on the front pages of newspapers, and its radio commercials and newspaper ads are street pole posters which drive traffic to its outlets.

In a discussion I had recently with someone who works on the Nandos advertising account, the street pole posters seem to be working well. Not at all clever or controversial (unusual for this often off-the-wall marketer), they are achieving their objective which is to point motorists to the nearest outlet and to get them to purchase.

From a marketing point of view, they also point to how a brand that is witty and irreverent can have TV, radio and print as its flagship mediums raising laughs and street pole posters doing the business of driving traffic to its stores.

At the end of the day, Nandos is in the business of making money and clearly not in it for the controversy it stirs in the marketplace, or the smiles and sniggers it puts on people’s faces. There is only one place it can make money and that is by getting people into its stores, of which there are now hundreds around South Africa in practically every shopping centre and on every second street corner.

Because they are seen by motorists everywhere, street pole posters are a perfect fit for this marketing-led company. More so because it’s an advertising medium that lends itself to creativity, it’s also one that’s cost-effective. Marketers wanting to get their brand “out there” and who don’t have marketing budgets that make television advertising, radio advertising or magazine possible find that advertising on street pole posters fits the bill in more ways than one.

(Depending on the geographical location, one could advertise on a street pole poster for around R1 200 per month. So a series of three or four posters, run consecutively, would set you back less than R5 000 excluding VAT which is a pittance in advertising terms. (Note that this a rental cost only. You would still need to budget to have the posters conceptualised and designed). Nando’s have street pole posters all over the place however so the costs can start to run away with you if you’re advertising on a national basis.

Just out of interest: a visit to the company’s new website www.nandos.co.za shows an impressive number of countries in which it is now represented, giving proof to the effectiveness of its marketing campaigns. Readers may be surprised to learn that Nandos now has outlets in Australia, Bahrain, Bangladesh, Botswana, Canada, Cyprus, Fiji, India, Ireland, Kuwait, Lebanon, Lesotho, Malawi, Malaysia, Namibia, New Zealand, Nigeria, Oman, Pakistan, Qatar, Swaziland, UAE, UK, USA and Zimbabwe… making it a truly global brand.

As an advertising agency, I’m often asked to produce “nandos-type advertising”. Clearly, it’s the sort of advertising that resonates with a lot of people. So hats off to its marketing department and ad agency Black River FC who has really set the benchmark for this genre of advertising.

Clearly, humorous and topical advertising has its place – and I’m all for it (where appropriate of course). In the meantime, here’s an idea for a street pole poster campaign that Nandos (or indeed one of its competitors) may like to consider.

“You’re warm. You’re warmer. You’re hot. Now you’re hot, hot, hot” with the first poster furthest from a Nandos outlet and the last poster closest to it.

Just an idea, but maybe one worth considering the closer one gets to winter?

Where Best To Find Them 2013 Advertising Rates

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Unless you’re an established marketer and have a full  service advertising agency working on your advertising account, obtaining advertising rates (and making sense of them) can be a time-consuming, frustrating, daunting and often difficult process.

As someone who runs a small advertising agency in Johannesburg, I sense this on a daily basis as I’m often fielding calls or receiving emails from businesses requesting rates to advertise on television, radio, billboards, newspapers and magazines.

Unfortunately, many of these requests for rates are not easy to see to, for the simple reason that there are so many variables at play. With combination rates on offer and discounted advertising packages for first time advertisers, it’s no simple matter providing the information required in a way that would be understood by someone new to, or unfamiliar with, marketing.

Generalist requests for “the cost to advertise on television” or “the cost to advertise on radio for a six month period” are akin to asking “the price of a car”. What type of car? A new car? A second hand car? What model? Clearly the price of a 2013 Mercedes Benz would be different to that of a 2007 Toyota Corolla.

And so it is with advertising. There are just so many variables at play and so many considerations to take into account.

Take TV or radio advertising, where a fifteen second commercial on Soweto TV would cost far less to flight at six in the morning than a thirty second commercial would cost to flight on MNet during evening prime time, and a radio spot aired during morning or afternoon drive time on Highveld will be more expensive than one aired mid-morning or mid-afternoon on Kaya FM.

In newspaper or magazine advertising, a quarter page black and white advertisement hidden on page 23 in a Caxton newspaper will be much cheaper to flight than a full page full colour ad with a product sachet affixed to it in a glossy magazine like FHM.

And in outdoor advertising, where a small billboard in the back of beyond would cost a fraction of the price of a large billboard occupying pride of place on Johannesburg’s M1 motorway.

I’m stating the obvious of course but the point is that advertising rates vary enormously and that potential advertisers should be cognisant of this. What’s also important is to be as clear as possible in one’s request for information. A request for “Rates to advertise during etv’s 19h00 news bulletin on a Tuesday or Thursday evening” would be much easier to provide than “rates to advertise on TV”.

But who should you approach for advertising rates? Whilst there is nothing wrong with approaching a media owner directly (be it SABC, MNet, DSTV, etv, Soweto TV, Primedia, You or Huisgenoot magazines, Clear Channel, Highveld, 702, 5FM, Jacaranda, Metro FM or Kaya FM as examples) you will likely only be sent a rate card or a number of rate cards for you to make sense of. And unless you’re a seasoned marketer, you may find it difficult deciding which advertising package, radio station or TV time slot will be best to take advantage of so as to deliver the most bang for your buck.

Also, the media owner wants your advertising business so any notion of objectivity goes out the window. My advice to anyone interested in advertising a product or service would be to ask your marketing consultant (if you have one) to put you in touch with an experienced media buying and planning agency.

Because these agencies are independent and work with pretty much every media owner in the country, they’re objective and besides providing you with rates to advertise, can advise as to which advertising mediums will work best for you within the parameters of your marketing budget.

And because they earn their commissions irrespective of the advertising media booked, they will do their best for your brand regardless of whether TV advertising, radio advertising, outdoor advertising, cinema advertising, print advertising, online advertising – or any other form of advertising is put to you on a media schedule.

Best of all is that so long as they get to place your advertising, their services and expertise typically come to you at no cost.

Advertising Costs And Budgets

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I don’t know what it is, but as a Johannesburg advertising agency, it seems that every second enquiry  I  receive these days is from companies with advertising budgets exceeding no more than R40 000 or   R50 000 per month. Maybe this is due to my positioning of this country’s smallest ad agency where  I’m perceived to focus on smallish marketing budgets: I don’t actually – a number of my clients have much larger marketing budgets to work with.

Whilst a marketing budget of R40 000 or R50 000 per month is not to be sneezed at, it certainly makes us advertising-types don our thinking caps as these are fairly restrictive marketing budgets given the cost of advertising in South Africa these days.

Typically, the questions I’m asked are: Will an advertising budget of R40 000 per month allow me to advertise on TV? (The answer is no – not effectively). Will an advertising budget of R40 000 per month allow me to advertise nationally? (The answer is no). Will an advertising budget of R40 000 per month be sufficient to advertise on radio? (The answer is, maybe, possibly). And will an advertising budget of R40 000 per month allow me to advertise on billboards around Johannesburg? (The answer is, not in a way that would make sense).

Today, advertising budgets are unquestionably under strain. Gone are the days when as an ad agency, you had the latitude to be experimental. Now, the marketing budget needs to perform the best it can within the parameters set. And this puts enormous pressure on advertising and communications agencies as well as marketers of brands.

We now need to critically analyse all media types and negotiate harder with media owners. We now need to be more imaginative – and think out-the-box where we can. But clients need to be realistic too.

If the SABC charges R140 000 excluding VAT for one thirty second flighting of a TV commercial on a program like Generations, then a R40 000 monthly advertising budget is simply not going to allow for advertising on Generations – as much as the client’s daughter might think it the best program ever and insist that her dad has his ad aired during it.

Advertising is costly and being so, advertising agencies have a responsibility to advise their clients correctly. Personally, I hate to see clients wasting money. Just yesterday, I met with a prospective new client who wanted to “test the waters” by running a small ad-once-off – in a newspaper or magazine. I’ve talked them out of it because I honestly do not think it’s the right thing to do.

My advice to clients is: either commit yourself to marketing over the medium or long-term, and invest the necessary funds required, or don’t advertise. “Testing the waters” by placing a small ad here or there in the hope that it will get the phone to ring will in all likelihood not work.

And to clients who cannot afford to spend more than R40 000 or R50 000 per month on advertising, I say: First, invest in a decent website and get it professionally optimised by search engines. The emphasis being on “professionally” because search engine optimisation is an art in itself and should be given to someone who specialises in the field, not to someone who “thinks” he can do SEO. Once the website is built correctly (I recommend WordPress) populated with the right content, and the right amount of content, and made live, a Goggle Adwords campaign should be set up – and managed on a monthly basis. The next step is to blog – and blog regularly.

Of course, social media is also important. But it’s of little use just setting up Facebook, Twitter and LinkedIn profiles. You need to assign someone to manage them and get them to work for you. There are some very good people out there who would be happy to take on this role.

Then there’s YouTube: get a professional to shoot a video and upload it for you.

Once your website is live and optimised for search engines, your Google Adwords campaigns are being managed, your social media strategy is in place, you’re blogging frequently and you can be found on Youtube, give thought as to what to do with your remaining marketing budget. Depending on the nature of the business, the nature of the product, and who it is aimed at, as a client you may want to look at advertising on street pole posters or on radio or on cinema. You may want to advertise strategically in trade publications or advertise by way of advertorials. A decent advertising agency should advise you in this regard.

But on a limited budget, your priority must be to have a good and professional online presence.
This is the most cost-effective way to advertise and your website has to work for you and deliver results.