South Africa’s Advertising Communications Industry Hit Hard by Coronavirus Pandemic

The coronavirus pandemic has already had a profound negative impact on South Africa’s marketing and advertising communications industry with agencies noting significant declines in billings and work commissioned or briefed in, and rising retrenchments and forced pay cuts.

This is according to the first South African advertising communications services industry survey to track the impact of Covid-19 upon industry employees, their agency/company and the brands they work on.

A joint initiative from industry news site, MarkLives.com, and Cape Town-based full-service agency, HaveYouHeard, the voluntary survey attracted 110 participants, all of whom work in advertising, marketing, production or a brand-related role at a company.

You can view the analysis of the results here. 

“There was consensus within the industry regarding both the severity of the pandemic and the likely economic impact,” commented Claudia Schonitz, HaveYouHeard head of research and insights, on the survey results.

“The majority of agencies anticipated a negative impact on billings, particularly in events/activations and outdoor activity. Demand could rebound after the crisis but when and how this will evolve is uncertain, making it more difficult to prepare and future-proof agencies. In the short term, there was respite for digital and concept/strategy activity.

“Government and most companies have responded with resourcefulness, adaptability and transparent communication. This brings renewed confidence in our leaders and, despite our isolation, a renewed sense of community,” she said.

Detailed results include

National view:

• 70% of respondents felt that government has responded on time, 15% believed it had responded early and 14% too late.
• 67% rated government response as very good, 27% as adequate and 5% as lacking.
• 34% felt that the long-term outcome is that South Africa would experience some negative change, while 30% believed SA would experience enormous negative change; 27% believed the country could experience some positive change.

Industry view:

• 84% of respondents believed that covid-19 presents an incredibly serious pandemic, while the remaining 15% believed it is a problem but not as bad as it’s being made out to be.
• 52% of respondents believed their companies has responded early to the pandemic, 37% said they responded on time and 10% felt they had responded too late.
• 62% rated their organisations’ responses as very good, 30% as adequate and 6% as lacking.
• 61% noted a decline in agency billings, 34% a decrease in work commissioned or briefed, 29% a decline in staff morale, 18% reported retrenchments or salary cuts, and 10% reported decreased internal communication.
• 30% suggested the pandemic would impact on their business for 4–6 months and 23% predicted a year or more; 19% felt it would impact for 2–3 months and 18% suggested 7—12 months. In short, 48% of respondents believed the impact would be felt for a period longer than six months.
• 37% percent of respondent agreed that their companies’ projected income would decrease substantially over the next 3–6 months; another 30% predicted it would decrease slightly; 20% was unsure; and only 3% predicted an increase.
• 64% predicted increases in digital spend, 43% predicted increases on concept or strategy spend, 29% on streaming video, 25% on PR and 23% on mobile marketing.
• 68% predicted a decrease in spend on events, promotions or activations, while 46% predicted decreased spend on OOH; 36% predicted declines in print spend, 25% on sponsorships and 16% on influencer marketing.

Personal impact:

• 41% noted it as fairly negative and 8% as extremely negative; 24% reported no impact professionally; and 22% suggested a generally positive impact.

Respondent quotes:

• “Opportunity to be involved in different projects — the move offsite has literally broken down silos.”
• "Working from home has allowed me much more free time (due no commute), increased productivity and generally better job satisfaction."
• "I think I have found ways to work smarter and uncovered many antiquated processes that should not exists after we get back to normal working routines."
• “Through studying, working experience and general proactivity — I can adjust my goals and ensure I achieve them according to the direction the world is shifting towards, instead of against. I have children to look after as I am a single mother.”
• “I offered my clients covid-19 advice without waiting for a brief and demonstrated my value to them”
• “Has ignited my hunger for reinvention, reinvigoration and reorientation.”
• “While this is a tragedy on so many levels, being forced to work in a new way has led to innovative thinking and approach to both process and the work itself. More time to work quietly and concentrate. More impetus to work hard and get things done as not to hold others up. Less unnecessary meetings and more productive ones when they do happen. Proving to myself that [I] am able to operate as efficiently if not more so working remotely while still collaborating with my team and the agency at large.”
• “Finding silver linings in new, modern ways of working. The ability to recognise which team members thrive on remote working and seeing who rises to support our clients during these tough times.”
• “Immediate loss of income so I have had to look for new ways to bring in revenue.”
• "Several projects with brands are on hold until there is more certainty about what the future will look like."
• “It’s having an impact on my company’s income which my professional role is tied to. Currently I do not feel the negative impact as we adjust, but as the effects increase in its severity on business, so too may it negatively affect my company and potentially my position within it.”
• “The brand that I work on has frozen all jobs for the next 6-months which means my job with the agency is not secure.”
• “60% of my job has to do with events. Most events are either cancelled or postponed. This affects me directly.”
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