Journal of Strategic Marketing Newsletter – August 2020

24 August 2020

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Journal of Strategic Marketing Newsletter – August 2020

A NOTE ON MARKETING THE FUTURE

It has been an extraordinary time. And no, not just because of the global coronavirus pandemic. In the past few months, we witnessed two astronauts take off from NASA’s Kennedy Space Centre for the International Space Station in the SpaceX Crew Dragon. It was the first crewed flight by SpaceX, the company founded by South African born Elon Musk. And we watched it all.

For a Star Trek fan, it was riveting stuff. Not just the space travel aspect of these missions, but that we could communicate with astronauts in space in real time. Who can forget Captain Chris Hadfield singing David Bowie’s Space Oddity in the ISS. Or Star Trek’s original Captain Kirk, played by William Shatner, tweeting Hadfield in space.

@Cmdr_Hadfield Are you tweeting from space? MBB,” Shatner wrote, signing off with his abbreviation of ‘My Best, Bill’.

And Hadfield responded, calling Shatner ‘captain’, bless him: @WilliamShatner Yes, Standard Orbit, Captain. And we’re detecting signs of life on the surface.”

Astronaut Doug Hurley, too, tweeted from space, sending magnificent photos of Earth, including images of Cape Town, Durban and Johannesburg which had South Africans entranced and sharing like crazy. When our world was reduced to four walls during lockdown, astronauts showed us a very big picture.

Social media kept us connected to that wider world, reaching even to space. It’s not surprising marketers and brands had to start thinking about how to utilise that reach, especially on emerging youth platforms such as TikTok and Twitter. Even Instagram changed, morphing from a (mostly) superficial look at pretty stuff into something that chronicled users’ lives much more realistically.

What seemed like magic even 20 years ago is the norm now. Artificial intelligence in popular culture was a construct we saw in sci-films and TV shows. But now it’s a reality. And it will play an increasingly important role in the marketing sphere.

In this issue, we’ve taken a look at the application of AI in marketing. Dr Myles Wakeham, Carl Wakeham and Maria Hamman outline where we are now, and where AI will be in the near future. IBM Watson’s ‘Lucy’ can write in-depth marketing plans, sourcing and analysing all the data needed to so so. It’s a vital overview marketers need to note.

In their story on beauty marketing in the age of influencers, Zama Nkosi-Mabuye and Cuma Pantshwa interview the gorgeous Kim Zulu, a virtual human and influencer. Zulu says the global pandemic has “hastened our pathway to more technology driven solutions, we see it across all consumption of media”. She came to ‘life’ in April. Her creator, Jason Campbell, told TimesLIVE, “lockdown has forced us to actually realise that there is a whole environment online and we want Kim to be at the centre of that environment or even kick-start that idea of transacting online”.

Back on earth, lockdown also saw us communicating excessively on social media, and witness the surge in TikTok and Twitch, as well as Instagram, as spaces where brands could communicate with humans who were locked down and desperate for entertainment. We’ve checked in with agencies working in this space on how the conversations have changed, and where they’re going.

Finally, a well-grounded story on the importance of employee experience. Also spurred by Covid-19, EX the new battleground for increased productivity and competitive advantage.

There’s certainly a lot to think about in terms of ‘marketing the future’.

Glenda Nevill

Editor

Hello Lucy. Please solve my marketing problems

IBM’s Watson’s Lucy can be used to determine market segments, develop products, conduct competitive or market analyses, handle media planning, provide the numeric marketing data needs in writing a marketing plan, and assist with salient information in developing a marketing strategy. DR MYLES WAKEHAM, CARL WAKEHAM and MARIA HAMMAN give some idea of the power of AI in marketing.

Artificial intelligence (AI) refers to the creation of human-like intelligence that can process, learn, reason, plan, and discern natural language.

AI comes in three forms, namely, narrow AI, with which we are involved with on a daily basis and which is designed to perform specific tasks within an area (technology with intelligence in a particular domain) and general AI which is not area-specific and can learn and perform tasks anywhere and finally strong AI, which is an artificial super intelligence. Thus far, we have only managed to master narrow AI.

Beauty marketing in the age of influencers

As beauty marketing moves from medium to medium thanks to technology, some remnants of a time gone by seem to linger even though the innovators of the space show that audiences demand some authenticity. ZAMA NKOSI-MABUYE and CUMA PANTSHWA of Asante Blush look at how beauty and the conversations around it continue to evolve.

The beauty industry is one of the few that continues to grow and keeps its share of the pie when it comes to how women spend their money. Even though the face of the industry is slowing shifting, there are some ways the beauty industry and the marketers that shape the narrative refuse to evolve at the same pace as their consumers.

It wasn’t that long ago that glossy magazines and TV were the playground of big beauty brands. Stunningly shot double page spreads used to reign supreme, then advertorials had their moment in the sun. Now that influencers are the ones driving trends and consumer interest, it would make sense to think the narrative for beauty brands would be different, but is it really?

From quarantine culture to mainstream, social is open for business

There’s no doubt social media kept millions entertained (and sane) during lockdowns around the globe. And while Facebook and Twitter maintained their popularity (perhaps among an older demographic), the growth of Instagram, TikTok and Twitch has been phenomenal. How did brands take advantage of the captive audiences? GLENDA NEVILL asks South African digital marketing agencies working with influencers to share their stories.

Social is open for business. Quarantine culture is a powerful thing. And brands need to rethink existing consumer journeys and paths to purchase to align with changes in daily routine. Things are getting real out there, and marketers need to be aware of just how much consumers have changed, and continue to do so.

Why Covid-19 has brought employee experience to the fore

Marketers will be closely looking at employee experience in the coming months and years. The Covid-19 pandemic has highlighted how essential it is to have a positive workforce.

In her piece on the changes Covid-19 has wrought on the marketing sector in the July 2020 Journal of Strategic Marketing, IMM Graduate School head of academics, Angela Bruwer, referenced the importance of employer branding/employee experience.

“Marketers should and will be looking at this more and more during this time,” she wrote. “It is essential to have a positive workforce who are positively impacting on the country at this time. As organisations across various industries try and regain their commercial foothold, they will want to count on the contribution of every employee. The immediate past and the present moment calls for unparalleled feelings and acts of community by organisations towards their employees: a new bond has been forged and it could be to the advantage of both parties.”

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IMM Graduate School rises to the Covid-19 online challenge

The unprecedented COVID-19 pandemic defined the first semester of 2020 for most people across the world, including our IMM Graduate School students and staff. True to our values of thoughtfulness, commitment and student centricity, our team implemented digitally led strategies resulting in a seamless transition to online learning and full, high quality education experience for our students. All our qualifications were completed successfully and on time. IMM Graduate School completed another successful student intake for the second semester of 2020, despite the current environment and uncertainty. During times of disruption, investment in a high quality education and relevant skills becomes ever more important. Our intake reflected this trend with many new students trusting IMM Graduate School to provide an education that will prepare them for the future. ~ Dalein van Zyl, CEO of the IMM Graduate School.

MPhil students start next phase of research papers

Most of the 13 students who presented their MPhil Research Proposals at a virtual panel event were successful and have been given permission to proceed with the fieldwork once recommended changes have been made to their proposals and ethical clearance has been granted. These students will most likely attend the 2022 IMM Graduate School graduation events to receive their MPhil in Marketing certificates. The panel interacted online with students from all over South Africa and from neighbouring countries with the study supervisors as participants. Proposals were submitted on a range of marketing-related focus areas, including:

The use of algorithms in strategic decision making about marketing on social media
Evaluating the impact of COVID-19 on the loyalty of diners in the sit-down restaurant industry
The influence of user-experience on customer retention in the business-to-business SME sector
Gauging the impact and influence of social marketing on the Zimbabwean Telecommunications Industry

The influence of the brand of the country of origin in purchasing of engineering products.

Marketers increasingly ‘conscious’ of pitfalls

The Conscious Advertising Network is being inundated with queries from marketers on how to navigate the minefield that is marketing right now. From Black Lives Matter to #StopHateForProfit, digital marketers are terrified of putting a foot wrong and being hammered with a social media backlash. Co-chairman of the Conscious Advertising Network, Jacob Dubbins, told The Drum: “Advertising needs to step up to its responsibility for its supply chain and the fact that it funds the internet; the good stuff and the bad stuff.” Dubbins said the network of over 70 agencies had been swamped with queries. “At the convergence of the pandemic, the Black Lives Matter movement and the Facebook boycott, we’ve been contacted from all over the world by campaigners, brands and also big networks who once weren’t necessarily too keen to engage.”

Nike’s latest campaign hits and misses

Staying on the topic of Diversity, and Nike’s latest campaign has been lauded around the world… but it’s own employees are not as impressed. The You Can’t Stop Us campaign features high profile athletes, including South Africa’s Caster Semenya, Kenya’s Eliud Kipchoge, Serena Williams and often-controversial former NFL quarterback, Colin Kaepernick among many others. It was created by Wieden+Kennedy’s. The creative team searched through 4 000 pieces of footage to find perfect shots that would underscore the commonalities between athletes. But The Financial Times reported that a group of black Nike employees believe the company should acknowledge its own equality issues before promoting an ideal on TV.

Survey confirms massive uptake of online shopping, but fear of unreliable payment solutions

A digital customer experience report by Rogerwilco, ovatoyou and Julia Ahlfeldt has, not surprisingly, confirmed massive uptake of online shopping since the start of the coronavirus pandemic. The big online category winners were grocery shopping, health and fitness, and education. The bad news is the CX study found unreliable payment solutions were a major pain point for consumers. And it revealed that only 50% of programmatic advertising reaches its target audience. “This suggests that local brands are wasting over R1-billion on failed acquisition – money that could have been spent on building a better understanding of existing customers and creating experiences that foster loyalty,” said Charlie Stewart, CEO of Rogerwilco.

Building digitally enabled business models

The first virtual CEO Dialogue series, co-hosted by the Shared Value Africa Initiative and Strathmore University Business School, focused on the future of work in Africa and the impact of the digital economy on the continent’s growth. Panellists discussed the underlying fears of new technologies replacing humans and pointed out that it is the responsibility of all our leaders from the private and public sector to create an inclusive future of work – one capable of generating opportunities for all, especially young entrepreneurs. The primary message was that we could achieve so much more if we collaborated and worked together and that companies should focus on building digitally enabled business models, which are purpose driven, inclusive and sustainable.

Why Covid-19 has brought employee experience to the fore

24 August 2020

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Marketers will be closely looking at employee experience in the coming months and years. The Covid-19 pandemic has highlighted how essential it is to have a positive workforce.

Writing in Human Resources Today, Jade Taryn Graham, says a strong employer brand is only as good as the talent within a company. This, she adds, is why a strong employer brand is “critical in the pursuit of attracting and retaining the talent you need to take your organisation forward, while competing in ever competitive and increasingly challenging markets”.

As Graham points out, this is especially important now in light of the challenges Covid-19 presents, as “despite the downturn of some business operations, there continues to be, in many essential business sectors a continuation of the highly competitive need to acquire top talent”.

The employee brand, she says, “brings to life your employee value proposition”. And employees inevitably have questions to ask, typically such as “How did the employer treat its employees through this really difficult time”? or “Would the behaviour of this organisation in response to the pandemic, align with the values that I have myself and be ones that I would want to become a part of?”

Global research and advisory company, Gartner, has just released its latest research on employee experience (EX), surveying 150 HR executives and over 3 000 employees in 26 countries.

“Managing talent today presents fundamentally different challenges for organisations than in the past. Employees aren’t contributing the same level of discretionary effort, have higher expectations for their work experience and are more vocal about workplace dissatisfaction,” the researchers said in the introduction to the Modern Employee Experience: Increasing the Returns on Employee Experience Investments report.

Gartner defines employee experience as “how employees internalise and interpret the interactions they have with and within their organisation and the contexts that influence those interactions”.

It reported that its customer experience research found that “two-thirds of the drivers of customer satisfaction are due to ‘feel factors’, or how customers feel during and about their experience”.

This means HR leaders should take this same approach to employee experience, “focusing on influencing and improving employees’ feelings about their overall experience through the use of psychological, motivational and social principles. Improving the way the experience feels can lead to a boost in employee engagement and support a positive company culture”.

And this, it says, positively affects a company’s bottom line. “Our analysis also shows when organisations have a high level of employee experience satisfaction overall, they’re also more likely to realise better business outcomes. Organisations whose employees are largely satisfied with their experience are 48% more likely to meet organisational customer satisfaction goals, 89% more likely to meet organisational innovation goals and 56% more likely to meet organisational reputation goals”. The white paper can be downloaded here.

In the piece below, employee experience strategist, DENNIS SMITH, writes that EX is the new battleground for increased productivity and competitive advantage.

Want better customer experience? Start with your employees

This devastating COVID-19 global pandemic has forced companies across industries to make tough decisions. Some have had to shut down their operations, while others have pivoted to a new business strategy and reconfigured their workforce.

As companies move towards the ‘new normal’ caused by the pandemic, many leaders are taking alternate routes and changing their business models. Leading companies have recognised that the employee experience (EX) is the new battleground for increased productivity and competitive advantage. Remaining competitive with a highly productive workforce now means creating an EX that excites and engages.

The parallels between a superior customer experience (CX) and employee experience are striking. An optimised CX generates loyalty and additional sales, while a stellar EX attracts talent, boosts workforce engagement, productivity and retention. This, in turn directly improves a business’s financial performance.

EX is not just about feeling good at work. Numerous published studies (Deloitte, PWC, Accenture, IBM) have shown links between employee experience and retention, discretionary effort, and work performance.

According to an IBM and Globoforce WorkTrends Survey, increasing the Employee Experience Index (EXI) score by a margin of 0.25 (on a five-point Likert agreement rating scale) corresponds to 0.86 percentage-point improvement in ROA and a 1.81 percentage point improvement in ROS.

For example, imagine if a company with sales revenue of R600 million with ROS at 15% in 2018 and an average EXI score of 3.50, could increase its EXI score by 0.25 (from 3.50 to 3.75), its ROS could increase from 15% to 16.81%. Assuming the same sales in 2019, the associated increase in operating income would be R11 million.

Linking employee experience to organisational business outcomes

Employees increasingly expect their workplace experiences to match those they have as customers and are often disconcerted when they don’t. What creates a positive, motivating experience at work? Mainly, it’s the meaning and growth people find in the work itself, and to improve that, the entire organisation has to be involved.

Employee experience should be approached with data in hand, just as big business decisions are. Ask yourself, are your actions making an impact? If not, change your actions, and see what happens to the metrics.

Employee and customer experiences are certainly linked and organisations need a blended focus on both; to do so, organisations need to rethink how effective their existing silos are.

There is a need to measure the ‘new normal’ as Covid-19 has changed all the perceptions of what employees see as important and the results of this measurement will form the basis for future strategic planning, strategic intent and organisational alignment.

It is common knowledge that to have an industry-leading CX, there needs to be an established infrastructure supporting it. Similarly, to attract and retain the best company culture, organisations must make intentional efforts to encourage EX. Those brands that do prioritise EX on par with CX are setting up a culture bred for success.

As EX ascends to its rightful place next to CX as a driver of business impact, the question of how to measure and analyse it becomes even more critical.

The answer is not as simple as just cross-applying the metrics one would use for CX. Employees spend nearly half their waking hours at work and especially, in the current environment, they’re looking for purpose and meaning at the office, not just ping pong tables or free food.

Internal feedback loops

Just as external feedback loops are used for CX, internal feedback loops are employed to gather the feedback from the internal team. This data is used to maintain a consistent level of performance across the organisation, providing insights while fostering a sense of collaboration and cohesion. It is essential to start afresh and identify how employees see the strategies under the new normal.

EX metrics your company should be measuring

Workplaces have different generations of employees in different life-stages. The needs of young, single employees differ from those of new parents, for example, who in turn have different needs to people whose children have left home. Employees’ needs may also differ from department to department and from geography to geography. This has been well understood for ages. What is new is that demographics aren’t enough.

Established behaviour science research offers guidance on how to measure organisational EX, which is defined through behaviour, and is evidenced by the alignment of the elements inherent in all organisations [Pryor et al., (2007)] i.e. purpose, principles/values, process, people and performance.

Based on the sound theory and established best practice the Stratview EX System measures the degree to which people in the organisation (the actual implementers of strategy) make sense of the organisational environment, providing an integrated approach to EX measurement. This allows leaders to take quick and substantial results to manage organisational effectiveness.

Identifying and taking advantage of major strengths can dramatically reduce costs and generate new income streams, in the shortest possible time.

BIO: Dennis Smith, a senior consultant at Stratview Management Systems, is an accomplished, award winning management development professional with an extensive background in marketing, strategy development and implementation, as well as managing cross-functional business operations, locally and internationally. His current research focuses on how organisations manage disruption in order to remain relevant in the eyes of their consumers. Smith is a Chartered Marketer, holds an MSc degree from the Da Vinci Institute and has served as adjunct faculty at various business schools for a number of years. He serves on the CPD panel for the Marketing Association of South Africa (MASA).

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From quarantine culture to mainstream, social is open for business

24 August 2020

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That’s the word from Swift, a WPP “creative agency for a digital world”. In its latest Global Social Conversation Report, Swift says as countries emerge from various levels of lockdown “the world of social has been reframed”. In fact, it has been reinvented, ensuring a new role for brands and culture.

Chief strategist at Nfluential, Anne Dolinschek, agrees, saying there was a big shift in people’s behaviours during the pandemic too. “Instagram became more real…to some extent, it moved away from the polished images and showing the best parts of lives. We started seeing people sharing their experiences being at home 24/7, the good and the bad. The platform saw a spike in engagement because we’re all in the same boat and content became a lot more relatable,” she explains.

Dolinschek says TikTok saw a surge in sign-ups and engagement too, even in South Africa. Suddenly it wasn’t just Gen Zs, but Millennials started using the app too. “It is a great entertainment platform and I assume that’s why so many turned to the platform during the pandemic,” she says. “In South Africa, it’s mostly a younger audience who are on the app, however. Some great South African brands also started creating fantastic content on TikTok to engage with their audiences.”

Founder of HaveYouHeard, Jason Stewart, says relevance of each social media platform for your target market and message is important. “Instagram is very much the prominent platform for influencer marketing (and has been for the past few years). However, TikTok has exploded globally, and is now an important channel in South Africa, albeit for a younger audience. And, then there’s Twitch, a relatively unknown powerhouse and a platform HaveYouHeard and its agencies often use, predominantly for eSports,” he says.

Twitch and TikTok

Where TikTok and Twitch are concerned, users are embracing the future of entertainment, which, says Stewart, is almost certainly going to be more interactive and social with audiences able to engage with the content, the creator and the audience – all at the same time.

“…Because of the negative impact of the Covid-19 pandemic (causing much fear and uncertainty and leaving too many people with too much time on their hands), TikTok and Twitch both provided the perfect form of escapism into worlds far from the burden of reality. It was also a time when consumers were forced to create new habits and find new ways of being entertained, shopping and even influenced,” says Stewart.

And he rolls out the numbers, courtesy of WARC’s Global Ad Trends report (May 2020).

“Before Covid-19, social media was expected to grow by 9.8%. In our Covid-19 world, its growth has almost topped this – 20%. Online video growth was expected to increase by only 5% on the previous year, but has exploded to 20.2%. TikTok had 315 million downloads in the first quarter of 2020, the most of any app in history. As for Twitch, well, there were 1 790 million hours of video gaming watched on Twitch in April of 2020, up from 1 000 million hours at the start of the year. The growth experienced in the first three months of 2020 was equivalent to that of the previous six years,” he says.

Nano and micro influencers

All this spurred the use of influencers although not in the way most would expect. “During the pandemic, brands were pushed to move away from superficial campaigns. People want to be able to relate. This has led to brands using more nano and micro influencers instead of the macro ones purely because the former tend to be authentic and have incredibly loyal audiences who are highly engaged,” says Dolinschek.

“These influencers are great to drive campaigns with call to actions a lot more effectively. In order to add reach to these campaigns, macro influencers are often used to organically boost the content by sharing it with their much bigger audiences,” she says. “Another tactic that’s gaining momentum quite quickly is including performance media in campaigns. It’s used to target bigger audiences with authentic content created by influencers. Engagement and reach are not enough to report on anymore; many other measurements are available in influencer marketing these days to demonstrate ROI to brands.”

Pieter Groenewald, CEO of influencer agency The Salt, agrees there has been an uptake in the utilisation of nano influencers. “… They are perfectly paired with brands and in most instances, represent existing brand fans, who we then utilise to amplify brand conversations both on and offline in a very authentic manner”. The Salt continued to operate during lockdown. “The type of campaigns was dependent on the type of lockdown restrictions. Initially, there were a lot around food and FMCG related products, which was open for trade, and recipes and home cooking was very topical at the time.

“Then when e-commerce opened up, our influencers were used to activate a lot of campaigns around e-commerce e.g. driving online sales and opening of new customer accounts.”

He points to a campaign by a client in the financial sector as being particularly effective. #TheOlympian (a Sanlam campaign featuring gymnast Caitlin Rooskranz), he says, “was a great opportunity for influencers to start the conversation in an authentic way within their tribes around the special initiative. From an influencer perspective it had everything in it, user generated content, macro influencers tied to nano influencers, timing strategy and amazing brand follow through on the conversations”.

Celebrating TikTok

Stewart believes the type of content you create is what makes video so important. “The richer, the better; hence the success of video and the type of content created on TikTok and Twitch. What is important is that the expectation is for the platform to provide interactive entertainment where the user can take part,” he says.

So, what do we celebrate about TikTok? Stewart has a list:

TikTok is a space that celebrates quirky fun instead of what many perceived as the superficial aesthetics of Instagram’s #BestLife.
Influencers and their audience on TikTok seem more willing to engage with brands in fun, novel ways – anything, as long as it is entertaining.
While TikTok is very young, its content is slowly permeating into adult audiences as pop culture influence rises up from the youth to older siblings and parents. (Over 70% of TikTokkers are under the age of 25, compared to only 30% of Facebook users. The average age of active Twitch users is 21 years old, so it’s a pretty young – and also mostly male – audience.)
YouTube beauty videos are starting to be regarded as ‘too long’ and Instagram ‘too boring’, which has seen many of these beauty influencers transitioning onto TikTok. TikTok provided a way for these beauty influencers to showcase their looks in a fun way in 15 seconds. Some used this to push viewers to go to fuller and deeper video back on YouTube.

And who is using TikTok in South Africa? “A local streaming platform in South Africa is using influencers on TikTok to promote new shows being released. Similarly, music labels and independent musicians are approaching TikTokkers to use their music within their videos to bring attention to their songs,” he says.

“In fact, TikTok has shown immense power and influence in pop music. Most artists now release their chart-topping songs along with a dance challenge on TikTok. The first example was a dance challenge by Drake for his song ‘In My feelings’. Other examples:

Doja Cat – Say So (Three weeks as No.1 on the Billboard charts)
Kanye West with Nicki Minaj and Ty Dollar $ – New Body (Nicki Minaj’s verse went viral)
Megan the Stallion with Beyonce – Savage remix

South Africa’s top TikTok influencers include:

Wian Magician
Daniel Vermaak
Chane Grobler
Jessica Ballinger
Troy Shepherds
KingBerto
Witney Ramabulana
Damian
Connor Weyer
Kelly Kikx

Case study

For Dolinschek, a campaign she enjoyed seeing come to life and which attained great results was an awareness drive that aimed to push customers to specific deals for a local mobile network provider. “The premise was that because people need to connect more than ever during this time, they wanted to create awareness of their great deals that saved people money. The response was incredible and proved that the brand tapped into a specific need South Africans were faced with.

The strategy was to use existing brand customers as nano influencers to spread the word and drive audiences to the deals. They did this by telling their own stories of wanting to be connected and how they’re saving money through these deals. It worked exceptionally well because it was authentic conversations by real customers. Because nano influencers don’t have massive reach, although have highly engaged audiences, micro influencers were used to tap into bigger audiences.

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Beauty marketing in the age of influencers

24 August 2020

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“Beauty brands in South Africa are still doing very generic social media campaigns, using influencers with no real differentiating qualities. Brands want a little video tutorial ‘this is my morning skincare routine’ and a flat lay post of products. It’s contrived and I don’t know how effective it is because they all blend into one after a while,” says Mathahle Stofile, independent beauty editor and founder of The Matte Project (@thematteoproject).

Democratising beauty

As technology moved us into a world where everyone who had a smartphone and an internet connection had a voice, the conversations about beauty expanded. For the first time in history, the conversations weren’t just happening between beauty editors, marketers and models.

Voices that had not been considered before were all of a sudden bringing up realities that millions could relate to.

“I always though black girls can’t wear red lipstick.”

“I was made to feel ugly as a little girl and spent a chunk of my childhood avoiding the sun.”

“My 4C curls don’t look like the girls on Tumblr, somebody help.”

The response was a resounding, “Girl, me too.”

In one of the Asante Blush sessions we host with various women of ranging backgrounds and age groups, democratising beauty was one of the main themes that emerged. With many options presented to them, the women say they take great care in deciding how to physically represent themselves.

There is a push to be beautiful in your own way, natural or not. This growing trend aims towards celebrating all kinds and levels of beauty. It’s about beauty no longer being exclusive.

The desire for authenticity and a realistic view on beauty is something that is becoming increasingly demanded by consumers. Women know what is real and what is manufactured. Now that we have tools in our own hands that allow us to filter, edit and colour correct our own feeds, there is a tacit agreement that we all know where reality stops and filters start. The illusion has been shattered and thankfully so because girls can now know that even their faves don’t look like their filtered versions.

Influencers are not apolitical

While the shift in power being given to influencers, there are some concerns about that model as well. There is a tendency of brands going with well-known influencers while not delving deeper into whether or not the person is the correct fit. Even though micro influencers are growing in demand, brands can do more to find voices that match their stance.

That a brand manager doesn’t know a certain influencer cannot be the measure of whether someone fits the brand or not. There are amazing influencers who are going unnoticed when they have the potential to really elevate certain brands.

The issues that have always plagued the beauty industry, like colourism and conventional beauty being hyped as the highest ranking, have not disappeared despite the shifts in how beauty is marketed.

“The South African influencer tends to be very generic. It’s the same type of look, same hair, same complexion, same Gucci belt, same Dior perfume, same eyebrows. The content is not targeted or niche in any way – except the hair influencers.

“Sinovuyo Mondliwa is a great example of an influencer who sticks to one subject, produces helpful and practical content and always puts her reader’s interest first. Because of this, she has real influence, people go out and buy what she says is working for her,” Stofile adds.

When tech & IRL collide

The line between real life and digital life keeps fading. That is extending to influencers too.

As a business, Asante Blush started engaging with South Africa’s first virtual human, Kim Zulu. She’s making her mark as an influencer and because she is an anomaly in a sea of influencers, she and other virtual humans will also affect beauty marketing.

Kim Zulu believes that tech is bringing brands ever closer to their consumers.

“The global pandemic has hastened our pathway to more technology driven solutions, we see it across all consumption of media. Brands dealing directly with influencers enables them to get to the consumer faster in a wider variety of platforms. South Africa has some amazing tastemakers who engage their audiences consistently and authentically. They are an inspiration, giving me the confidence to express myself. Impact is always important as I believe that most want to make a difference in society,” she says.

The bottom line can never be excluded from beauty marketing or any kind of marketing. As budgets go to influencers instead of publications, the status quo is shifted.

Many local influencers are making a good living off their platforms, which is a positive shift towards financially empowering female entrepreneurs. The thing that remains to be seen is how sustainable this will be. It’s also important for marketers to be smart about their influencer selections. You want to go with people who will lead to campaigns converting into sales. You also want to create content that is authentic and interesting. Consumers will not be accepting generic feeds that look the same for much longer.

As beauty marketing decisions continue to be made in boardrooms across the country, there is an exciting conversion that is happening in South Africa that will give big brands a. run for their money.

Young entrepreneurs like Vuyi Zondi, who is the founder of Corium Beauty, and Mbali Sebapu, who founded cosmetics brand Hermosa Flor, are making their presence felt.

Whether big brands view these local brands as competition or not doesn’t change the fact that these brands are getting Rands that used to go to the powerhouses. Everyone, no matter how big and reputable, has to level up and has to connect with their consumers. That evens out the playing field in some ways and encourages excellence in how brands move forward.

BIO: Zama Nkosi-Mabuye and Cuma Pantshwa are the founders of Asante Blush, a women-led marketing agency with a strong focus and specialisation on female consumers.

Pantshwa started her career path in the field of television producing after completing her Journalism and Drama degree at Rhodes University. Her career was kick-started in one of South Africa’s iconic production companies, Urban Brew Productions in 2001 where she co-produced some of South Africa’s biggest television shows such as Yo.TV, Shift, Road to Riches and South Africa’s first live interactive show, Wildroom.

Nkosi-Mabuye is a creative director who has had a career in the publishing, ideation and marketing industry. Her love and dedication to storytelling, building genuine connections between brands and their consumers, as well as women-centric issues have been the common thread in all the roles that she has worked in.

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Hello Lucy. Please solve my marketing problems

24 August 2020

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Artificial intelligence (AI) refers to the creation of human-like intelligence that can process, learn, reason, plan, and discern natural language.

AI uses, among other technologies, natural language processing, speech recognition, robotics, machine learning (ML) and computer vision. An example of AI that you may already be engaging with is SIRI, presently available on Apple iPhones, who reacts to your voice on command. SIRI has the ability to ‘learn’ from you as you request information in the future.

According to Carolyn Frantz (Microsoft’s Corporate Secretary), AI will have a major influence on business and will equally have a dramatic impact on jobs. Frantz asserts that in the future, AI will make as much as 75 million jobs disappear in the USA but will be replaced by 133 million more challenging and less repetitive roles.

Besides its impact on HR, AI will also influence operations and production, inbound and outbound logistics, supply chain management (SCM), finance and as importantly, marketing.

One of the ways that AI is influencing marketing is with AI marketing assistants such as IBM Watson’s Lucy, a cognitive problem solver (in contrast with emotional), which acquires knowledge through a determined learning process.

Lucy can be used to determine market segments, develop products, conduct competitive or market analyses, media planning, providing the numeric marketing data needs in writing a marketing plan, assist with salient information in developing a marketing strategy, creating structured marketing content through a process called Natural Language Generation and so on.

According to IBM, Lucy is a powerful tool marketers “…can use for conducting online research, segmentation and planning and it is so powerful that it can do more in a minute than an entire team of marketers can achieve in months”.

Needless to say, the advantage of a marketing assistant like Lucy is that it can digest and analyse literally all the data a company possesses and once it has absorbed all of this data, marketing personnel, according to Watson, can ask the following questions, when attempting to solve marketing problems:

What are the personality characteristics and attributes of the organisation’s target audience based on a set of predetermined variables?
Which segments, towns or regions should be targeted first in order to maximise sales?
What content mix should be created for the target audience to maximise the attainment of the marketing and promotional mix objectives?
What is the current competitor activity and how can the organisation use such data to make better marketing decisions specifically within environments like retail channels?

The above are questions that companies need to answer in order to formulate marketing strategies that achieve the marketing goals as set by the enterprise. Lucy and similar AI marketing assistants can, therefore:

Create viable segments of a company’s target audience so that it can develop highly personalised content that is designed to appeal to such an audience (target market)
Assist in the planning of marketing strategies by interrogating the needs and wants of the target market and how best to maximise sales and profits because of such market intelligence through programmatic targeting as an example
Implement and control the different strategies so that the firm’s objectives may be realised based on data feedback loops put into place
Create promotion content that is customer-specific so that the organisation’s strategy and promotional mix can be directed specifically at satiating customer and organisational needs and wants.

According to MIT’s Brian Bergstein’s article, which was published in the MIT Technology Review in February 2020, AI as it currently stands:

Cannot question decisions so it is basically led by data which could be incorrect
Cannot explain the decisions it has made to qualify or quantify the decision
Cannot understand causation (why things happen following on from an occurrence)
Cannot measure psychographic typologies
Cannot reason qualitatively, e.g. how people feel about a brand; and as importantly
Cannot understand the concept of, for example, customer loyalty outside of quantitatively ‘crunching’ numbers

So, from the above points, AI must not be seen as a cure-all for an organisation’s marketing woes but rather a tool to assist the firm in achieving better results in the marketplace.

Application of AI in marketing

AI, and systems like Lucy (there are numerous others), will undoubtedly have a huge impact on content marketing as they become more affordable and more popular. They will help companies better understand their audience, and the data garnered by means of AI will allow marketers to position brands more effectively in the minds of current and future customers and put together more effective strategies so that organisational objectives may be attained.

AI will also help them understand what outcomes they can expect by pinpointing accurate customer expectation so that customer-specific targeting can be better planned based upon more reliable forecasting and market intelligence. According to the publication Smart Insights: The Financial Brand (March, 2018), the applications of AI in marketing can be found in Figure 1 below:

Figure 1: Application of AI in marketing

At present Cookies and other engagement tools follow customers as they interact with websites, products, and applications by providing various data sets that will form a personal ‘ecosystem’ that is programmatically targeted by tools and systems. Here relevance is the key to successful engagement by the consumer with variable pricing bases upon the propensity of interest and purchase.

AI can have an explosive impact on marketing throughout the organisation’s relationship with its customers… from demand generation through to the instilling of customer loyalty. It can therefore be used to cement strong and mutually rewarding relationships with customers and help to maximise the lifetime value of the customer.

The IMM Graduate School’s Dr Myles Wakeham is a motivated and well-connected academic and businessman who was instrumental in introducing and adopting CIPS at CPUT as a series of qualifications. He has consulted to a variety of institutions and organisations, such as the South African National Treasury, National, provincial and local government. He is also involved in international research, and with an academic consortium has researched the impact of IT on university education.

Carl Wakeham is a semi-retired ex marketing executive specialising business and brand strategy based on the Wild Coast. He is an ex director and shareholder of a marketing company based in Johannesburg. His special interests are brand development and positioning and has had the opportunity to work throughout Africa with businesses within the Naspers Group and many others He has had the opportunity to gain experience in the Far East and selected countries in Europe where he has lived. He has a BA/MBA and studied other business related fields whilst living in the Philippines and Ireland. He provides a consultancy service to various clients based on project work specifically in the communications /digital fields. He is actively involved in a digital media company where he is a shareholder.

BIO: The IMM Graduate School’s Maria Hamman has over 17 years of combined market research and CX consulting experience. She has worked on both market research projects and customer experience improvement projects with a broad knowledge of research due to working with multiple research methodologies both qualitative and quantitative.

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Journal of Strategic Marketing Newsletter – June 2020

29 June 2020

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Categories: Newsletters

Journal of Strategic Marketing Newsletter – June 2020

A NOTE ON MARKETING THE FUTURE

Five months into the coronavirus pandemic, with the attendant fallout in business and society, and we’re no closer to establishing a ‘new normal’, the term de jure across the globe we use to try and describe where we’re heading post-COVID-19. Whenever that will be…

Nevertheless, certain realities and trends are emerging, giving marketers some indication of where the discipline is heading and what they should be taking into account. That’s the road we’re taking in this edition of the Journal of Strategic Marketing.

A recent Nielsen survey points to a growth spurt in the ecommerce sector. Thirty-seven percent of South Africans indicated they are shopping more online, particularly for groceries. Previously, it was fashion, travel and entertainment that were the online front-runners. Only one to two percent of South Africans regularly bought food and groceries online. Managing director of Nielsen Africa, Bryan Sun, in his piece for this edition, says the African consumer has shown “incredible behaviour changes” over the past few months “with major increases in the use of social networking, online reading, listening to music and video streaming”.

Nielsen South Africa retailer lead Gareth Paterson said the rapid evolution in online made it clear that adoption in the current situation was paving the way for a sustained development of online shopping, in terms of infrastructure and consumer acceptance. Still, he warned retailers that communication with consumers was key, especially around issues such as being out of stock. The move from offline to online has to be seamless to keep the new consumers engaged.

Which is where supply chains come in, of course. IMM Graduate School lecturer in supply chain management, Marzia Storpioli, believes the ‘just in time’ model has been exposed during coronavirus as not being sustainable. She addresses this and more in her piece on reinventing supply chains.

The attitude of consumers too is changing. IMM Graduate School academic head, Angela Bruwer, writes in her look into where marketing is going as the pandemic continues, that consumers want to know the brands they’re supporting are ethical, that they’re authentic and that they’re not ripping them off. Actions, she warns, speak louder than words. The more compassionate and aware consumer also wants to know that packaging is sustainable and that brands are doing their bit in terms of corporate social investment, another biggie for marketers to note.

At the heart of managing businesses right now is creativity, as Brett Morris, CEO of Nahana Communications, points out. He emphasises that creativity is not just about producing a creative product, that it is a “process of critical thinking and problem solving”. The pandemic has forced all businesses to think creatively, about everything from how to manage staff working from home to how to restrategise around advertising, and he hopes that in future, they won’t take its power for granted. Hear hear.

With a bit of live sport back on SuperSport and news that Absa is no longer to sponsor the Premier Soccer League, sports marketing and sponsorship is top of mind. As it has been throughout the initial lockdown period. We’ve taken a global and a South African look at the sports arena, with WPP’s Misha Sher analysing the impact and opportunities globally, while BMi Sports Info’s David Sidenberg delves into the local situation. He believes the silver lining is “incredible learnings around sports fans and their media consumption habits” and the opportunities this knowledge will present.

So, there’s no real clarity on this ‘new normal’ but there are certainly new insights and patterns to explore as we continue to ride out whatever this crazy new world is throwing at us. And a wild ride it is too.

Glenda Nevill

Editor

Creativity is a process of critical thinking and problem solving

Creativity’s power in marketing and branding has been proven and documented over and over again for almost a century. When times are good, we’re more likely to take creativity for granted but now that we are in the midst of a global pandemic, we need to be more resourceful, writes BRETT MORRIS.

I’ve written many articles on creativity over the years. That’s probably because I’ve dedicated half my life to championing the cause of creativity as one of the most powerful tools any business has at its disposal. I’ve also been lucky enough to experience the power of creativity first-hand, working with brands and businesses that believe in the exponential advantage it offers.

Though I am more than happy to spend a good portion of my time and energy continually championing this cause, it has always amazed me that there is a need to do so. Creativity’s power in marketing and branding has been proven and documented over and over again for near almost a century.

Actions have spoken more loudly than words during the pandemic

Academic head of the IMM Graduate School, ANGELA BRUWER, discusses the impact, the fallout and the future of marketing in the wake of the devastating COVID-19 pandemic.

I don’t have a crystal ball. I don’t think any of us have got a crystal ball at this point. But I think we’re adapting because, with the many changes wrought by the coronavirus pandemic, we all have to become more agile, to think on our feet, to respond swiftly and authentically to the challenges the entire marketing sector is confronting right now.

At the IMM Graduate School, we’ve had to do just that. We’ve been the throes of exams and marking. To get to this point, in lockdown, we had to redo our whole learning platform, get the exams onto the system in time and for the first time, mark them online.

It’s been harrowing but is, perhaps, part of the ‘new normal’.

Sport’s blank page: COVID-19 crisis gives marketers and sponsors time to reflect, review and restructure

In a wide ranging interview with sports journalist, LUKE ALFRED, the CEO of BMi Sport and founding member and CEO of SS Network, David Sidenberg, talks about the impact of coronavirus on sport, rights holders, broadcasters and sponsorship. The silver lining, he says, is that sport has a blank page that could be filled with the ‘incredible learnings’ about sports fans and their media consumption habits.

The coronavirus pandemic has raised a variety of threats (and questions) in the sports industry. These relate to live sport, the broadcast of live sport and the relationship between rights holders and broadcasters. But they also relate to sponsorship, legal issues, public health issues and the role of government going forward.

How sponsors can navigate COVID-19

It’s safe to say that the sports marketing industry is living through unprecedented times. Never before has sport come to a complete halt across the world (with a few minor exceptions like Belarus), depriving billions of people of a much-loved emotional outlet and daily passion point.

Brands, which were predicted to spend £37.5 billion on sports sponsorship in 2020, are facing some tough choices. What do they do now that nearly every event has been postponed or suspended? How can they continue to engage passionate sports audiences?

A prime imperative: Reinventing supply chains

Current disruptions have brought to light the fragility of our supply chains, says MARZIA STORPIOLI. And the volatility is set to continue for quite some time. What to do?

There’s not doubt volatility, turbulence and uncertainty will continue, and probably increase in the decades ahead, and the ‘business as usual mentality’ will need to be replaced with business seeking stability in the face of disruption.

Current disruptions have brought to light the fragility of our supply chains. For the past 20 years, the focus has been on cutting costs along each link in the chain. Unfortunately, this has also expunged any flexibility or resilience (the ability to withstand shocks to the system) in supply chains.

The question now is, how do we retain cost efficiency but reintroduce flexibility and elasticity into supply chains?

COVID-19 creates deep shifts in consumer behaviour across Africa

BRYAN SUN, managing director of Nielsen Africa, gives insights into the new African consumer.

The COVID-19 pandemic has given rise to a new kind of African consumer who is already displaying fundamental shifts in consumption and purchase behaviour driven by factors such as heightened health awareness, a focus on quality and safety, a renewed desire to stay at home and a tight wallet squeeze.

A recent Nielsen industry webinar, Navigating the New Normal, discussed the realities and effects of this rapidly evolving outlook. Nielsen Africa outlined the consumer evolution since the onset of the pandemic and the fact that crisis-buying patterns have accelerated the adoption of permanent behaviour change.

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Reebok and CrossFit no longer a couplet

Reebok has ended its association with CrossFit after the latter’s founder, Greg Glassman, tweeted a response to the Institute for Health Metrics and Evaluation’s comment that racism was a public health issue. Glassman replied, “It’s FLOYD-19” in reference to the coronavirus pandemic and the killing of George Floyd by police in Minneapolis. Reebok was unimpressed. “Recently, we have been in discussions regarding a new agreement, however, in light of recent events, we have made the decision to end our partnership with CrossFit HQ,” it said in a statement to The Morning Chalk Up.

Coca-Cola puts acquisitions on hold to invest in its business

Coca-Cola will be concentrating on ecommerce and innovation as part of its post-coronavirus response. The company’s chief financial officer, John Murphy, told the recent RBC Capital Markets global consumer and retail conference that emerging stronger and staying true to the company’s overall purpose were guiding some of its decisions. He said investing in the business was the number one priority, while the mergers and acquisitions side was now a “lower priority”. Coca-Cola, before the pandemic, was looking into diversifying its portfolio. Murphy said it was vital Coca-Cola’s brand “become as good in the online shelf as we are in the offline shelf”.

Time to look beyond the ‘cult of the CMO’

A new study from the World Federation of Advertisers (WFA) has revealed the role of chief marketing officer is still necessary, but that it ought to come with major changes. It said there was a need to “look beyond the cult of the CMO as the person with ultimate wisdom in all the complex areas that now affect the role”. Team capabilities, and the softer skills needed to effectively lead a team, are increasingly critical for CMOs, the report says. The CMO’s responsibilities range across nine distinct areas from marketing strategy (79%) through to data ethics (34%), business growth (58%) through to sustainability (37%).

Many of these areas are expected to become increasingly important during the next five years, with 80% of respondents citing sustainability, 77% the need to manage digital martech and platforms, and 74% the role of data ethics.

Travel Tractions saves 18 youth jobs by launching affordable marketing agency

A small South African business, Travel Tractions, has turned the stress of the struggling travel industry into an opportunity by launching an online marketing business, saving the jobs of up to 18 young people under the age of 30. Founder Matt Davison launched The Marketing Mill in response to COVID-19, ensuring that his staff of 18 keep their jobs during a very difficult time. The agency will market the affordability of South African work and the high level of quality that is produced.

IMM Graduate School now accredited skills development provider to CGISA

The IMM Graduate School is now an accredited skills development provider for the Chartered Governance Institute of Southern Africa (CGISA). As the only provider of online instruction and learning support for CGISA programmes, the IMM Graduate School offers students 13 weeks of tutorial sessions, once a week for two hours, with tutors who are experts in their field and who have a wealth of industry experience to share. They also help students keep pace with the learning content, which can often be a problem when facing work, home, and study responsibilities. During these online sessions, students will be able to collaborate with other students; bounce their understanding of concepts off each other, see varied perspectives on the module content, and learn from each other. To register and find out more, click here.

COVID-19 creates deep shifts in consumer behaviour across Africa

29 June 2020

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Categories: COVID-19 / Coronavirus / Lockdown, Newsletters

BRYAN SUN, managing director of Nielsen Africa, gives insights into the new African consumer.

As the prospect of looming lockdowns first hit, consumers realised they needed to stock up which saw a spike in store visits, stockpiling of shelf staples and growing basket sizes. However, as restricted living became more commonplace, there was a change in behaviour with consumers seeking out products without putting their health at risk.

We have therefore seen growth in online shopping, declining store visits and a rise in out of stocks. Supply chain challenges have also driven consumers to be less price sensitive on high demand packaged goods or those that guarantee hygiene standards.

The expectation is that once quarantines lift and consumers return to ‘business as usual’ they will continue to operate with a renewed consciousness about health, which will remain for a long time. There will also be shifts in the way consumers perceive products with the increased importance of safety and efficacy claims, and a willingness to spend more on hygiene needs and healthy foods.

Global perspective

Nielsen’s recent COVID-19 syndicated online survey, conducted in over 70 countries across the globe, produced interesting comparative data and insights for Sub-Saharan Africa (Kenya, Nigeria and South Africa) as compared to the rest of the world.

75% of SSA consumers are now more concerned about their families versus the global average of 48%. In addition,
83% said they were following information multiple times a day – significantly higher than the global average of 75%.
51% of SSA consumers said they were cooking more at home versus 39% globally, and significantly more said they worked more at home versus the global average.
46% SSA consumers said they are visiting malls less often versus the global average of 32%.

Despite perceptions that Africa lags behind in terms of online behaviour, it has in fact seen incredible behaviour changes with major increases in the use of social networking, online reading, listening to music and video streaming.

Future mindsets

As countries move from restricted living to precautionary living, Nielsen has also created an in-depth view of current and future SSA consumer mindset and purchase patterns based on learnings from other markets:

Heightened health awareness will drive consumers to be less price sensitive on high demand packaged goods or those that guarantee hygiene standards as food safety becomes paramount to consumers.
The renewed desire to stay at home and the preparation of home meals might require brand extensions and a need to address declining store visits, growth in online and proximity shopping.
As consumers are impacted by less income and smaller purchasing wallets, value for money offerings and more aggressive promotions – over that of just in-store promotions – are needed.
eCommerce growth has reached double digits in many countries with Italy at 82%, China 50%, and Korea 30% where older shoppers are trying eCommerce for the first time. Technology catalysts are driving behavioural change and will penetrate the market despite previous scepticism around this platform.

Looking to the future, the path to recovery means retailers must urgently look at factors such as pricing mechanisms and brand relationships in order to maintain and strengthen consumer trust in their brand.

Successful retail regeneration across the continent, following the impact of COVID-19 on the African consumer and retail landscape, will rely on an agile and innovative response that sets the groundwork for a future unlike any we have ever known.

BIO: Bryan Sun is managing director of Nielsen Africa. Nielsen Holdings is a global measurement and data analytics company that provides the most complete and trusted view available of consumers and markets worldwide. Our approach marries proprietary Nielsen data with other data sources to help clients around the world understand what’s happening now, what’s happening next, and how to best act on this knowledge.

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A prime imperative: Reinventing supply chains

29 June 2020

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Categories: COVID-19 / Coronavirus / Lockdown, Newsletters

Current disruptions have brought to light the fragility of our supply chains, says MARZIA STORPIOLI. And the volatility is set to continue for quite some time. What to do?

The question now is, how do we retain cost efficiency but reintroduce flexibility and elasticity into supply chains?

Supply chain suppleness – revisited

Just In Time (JIT) has been seen as the model of supply chain superiority, but this is no longer the case. The disruption of supply chains by the coronavirus pandemic showed that this method of inventory control, which brings material into the production process, warehouse or customer just in time to be used, has its limitations.

Some elements of JIT are good and should be translated into the reshaping of the new models for supply chains, but many of the ‘credos’ of JIT will need to be redesigned and new thinking brought into supply chain management.

One of its weaknesses (and other similar methodologies) was that the environmental impact of JIT changes to supply chains was not considered or measured. This is no longer feasible. Consumers are no longer willing to accept ‘due to internal considerations….’ as an excuse for out-of-stock situations.

What will the supply chain of the future look like?

Firstly, the supplier base must be widened to include more suppliers for key/critical items. There should be reduced focus on cost reduction and a move to find a balance between acceptable costs and acceptable inventory levels. This should be done –with customer in mind, rather than the company’s bottom line only.

There should be greater visibility and sharing of information between and among supply chain members e.g. greater trust less ‘protectionism’.

We need to rethink strategies on essential goods and services. For example: chemicals used in sanitiser products – should they be imported because the supplier is cheaper, or should we manufacture the lion’s share in South Africa to reduce reliance on globalised sources?

More joint ventures are required to leverage off each other’s strengths. In other words, we need less outsourcing and more capacity sharing.

A move to on-shoring production of critical items (items critical to national security, health, economic prosperity) is needed.

For example, Sasol has always been able to produce chemicals – world class – why shouldn’t they be incentivised to develop their production to encompass chemicals currently being imported from China (due to some economic cooperation agreement between South Africa and China)?

The South African textile industry has a track record of producing high quality material. Why are we destroying that capacity by importing textile products from China?

Again, South Africa is capable of producing medical quality personal protection equipment. We shouldn’t need to import PPE from abroad.

A trend is developing where businesses collaborate with their competitors, leveraging each other’s unique strengths, buffering their weaknesses and moving closer to becoming ‘demand chains’. This means focusing on customers (outward looking) rather than focusing on internal business efficiencies (inward looking).

There must be a change in relationships with suppliers. It is no longer rational to keep adversarial relationships going, and more important to work on collaborative relationships – the ‘we are in this together’ mindset, as opposed to the traditional ‘beat suppliers down to the lowest price without a thought for their sustainability’.

And that’s just to start with…

BIO: Marzia Storpioli is Lecturer: Supply Chain Management and Programme manager: BCom International Supply Chain Management at the IMM Graduate School.

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How sponsors can navigate COVID-19

29 June 2020

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Categories: COVID-19 / Coronavirus / Lockdown, Newsletters

There’s no doubt the 2020 sports calendar has been upset by the turbulence caused by the coronavirus pandemic. MISHA SHER has advice for brands on how to handle it.

Questions have been raised about the merits of ‘hibernation’ style strategies – freezing all activity in order to protect budgets and wait out the storm. Such strategies offer a false sense of security and threaten to undermine brands’ hard-earned relationships with sports fans. Instead, a new playbook is required that offers brands alternative strategies for how to continue leveraging those relationships and sustain growth.

In what is undoubtedly a very challenging situation, it’s crucial that brands look at ways in which they can provide value to fans. Sponsorship is at its most powerful when it enhances the fan experience – and it’s more important than ever for brands to do that now.

Fully explore the potential of gaming

The biggest winner in the current situation has been the gaming industry. Even before the crisis, it was growing faster than any sport and now with everyone spending more time at home, it’s no surprise that live gaming is booming. A recent report by Captify shows that with mass live sports cancellations, consumers are looking for their sports fix elsewhere. Consumer interest for sports games saw a 1054% search uplift since 1 January 2020 with the top indexing audience being sports fans.

Clearly, there is an audience that craves sport and sees gaming as an alternative.

Brands already associated with competitions that are suspended are showing agility and hosting esports versions. And the numbers have not disappointed. Santander, the title sponsor of La Liga, headlined a FIFA 20 tournament comprising players from each club team. The Santander Challenge, livestreamed on Twitch, drew 1 million viewers and gave fans a more intimate and personal experience with their favourite players than they are used to. Nascar, NFL, NBA, F1 and others have started their own versions, in many cases featuring their current league sponsors. Admittedly, these virtual tournaments may not deliver the same scale of audience exposure brands are used to, but they allow sponsors to continue engaging with fans, staying top of mind and demonstrating a commitment to the sports that have helped them grow their businesses.

For others, there are opportunities to explore the possibilities created by in-game advertising offered programmatically by platforms such as Anzu.

Unlock the potential of sports talent and use it for good

In a crisis that has underlined the critical importance of interpersonal relationships to all of us, talent and influencer marketing is demonstrating its potential as a powerful media channel. There is an opportunity to leverage talent unlike ever before. Brands should be looking at ways in which they can authentically engage sports talent to provide fans with the access and entertainment that they crave.

A great example of this is Red Bull, which actively leverages extreme sports events to connect with their consumers. To continue engaging with their audience, Red Bull launched a new 10-part What Does It Take podcast series hosted by Matthias Dandois. The BMX star and eight-time Flatland World Champion interviews fellow Red Bull athletes and extreme sports stars from around the world, exploring not only what it takes to get to the top, but also how to stay there. Red Bull then uses a mix of its own and its talents’ social channels to distribute this content to fans.

As an Olympic Partner (TOP), Visa is taking a slightly different approach. The sponsor has quickly created a content series with its athletes called Do Your Part Like An Olympian showing them performing feats of sporting prowess, juxtaposed with easy COVID-19 safety measures like handwashing. It is engaging and informative, and contributes to vital communication efforts to encourage people to take the right steps to tackle the coronavirus crisis. Visa was one of the first major brands to confirm that it would stick with its Olympic partnership and stand by its athletes. Visa is now being seen as a socially responsible brand, utilising its sponsorship assets for the greater good. It will undoubtedly generate consumer goodwill.

Drive engagement by tapping fans’ creativity

If there is one thing we know about sports fans, it is that they want to be participants in the sports experience, not just spectators. For brands, it’s therefore key to engage people in a way that genuinely creates utility, rather than in an attempt to sell more product. GoPro have done just that by launching their #HomePro challenge. Knowing that people are likely to be suffering from cabin fever, the brand created a competition encouraging people to share whatever weird and wonderful activities they’re getting up to at home for a chance to win their latest performance camera. The beauty of the competition is accessibility. You don’t need to own a GoPro – footage can be recorded and shared from any device. The campaign effectively taps into emotions that people are likely to be feeling and offers them a creative outlet within the confines of critical social distancing measures.

Dick’s Sporting Goods have done something similar, launching the #LongLiveSport campaign across its social channels encouraging everyone to share how they’re playing their sport at home. The campaign is true to the brand and celebrates the creativity of sports fans and athletes.

Other brands can and should be asking themselves how they can harness the creative potential of their audiences in a way that helps build brand affinity.

Think ahead

Amid all the uncertainty, it is more important than ever to spend some time thinking about the future. Right now, sport seems like one of the most inconsequential things to worry about. But things will eventually return to normal – albeit perhaps a new normal – when the crisis has passed. Sport will return in a major way. When it does, the world will see a celebration of humanity and connection.

There is a chance that, at least initially, sport will resume in empty stadiums and arenas. If so, sponsors will have an opportunity to play a major part in the way people access and experience sports events. We’ve seen Heineken shrewdly demonstrate how to leverage such an opportunity when it paid for the rugby world cup final to be shown on South Africa’s state broadcaster so that people could watch on terrestrial TV rather than shielding it behind a paywall. It happened in what now feels like a different time, but nevertheless demonstrated how major event sponsors can transform the sports experience for millions of fans. Now is the time for brand sponsors to start thinking about the role they want to play when sport eventually resumes.

This is an unprecedented time, but brands must see this as a chance to play a bigger role in consumers’ lives, rather than a time to scale back. How they react to this crisis could dictate their relationship with consumers for years to come.

This story is published with the permission of WPP.

BIO: Misha Sher is Vice President of Sport And Entertainment at Mediacom. Mediacom Sport & Entertainment is part of The WPP Sports Practice, the global entry point to all of WPPs specialist sports marketing capabilities. Find out more about how The Practice brings together the best talent from across WPP to help brands, rights owners and events hosts.

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Sport’s blank page: COVID-19 crisis gives marketers and sponsors time to reflect, review and restructure

29 June 2020

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Categories: COVID-19 / Coronavirus / Lockdown, Newsletters

But first…

Q: How will the news of ABSA pulling out of the Premier League sponsorship impact on the PSL and sport sponsorship?

A: While much has been made of ABSA’s announcement that they will not be exercising their contractual right to further extend the PSL partnership, for those in the know, this should however come as no surprise. In fact news of ABSA’s eminent departure pre-dates COVID-19 and was first publicly voiced towards the end of last year.

Similarly, any reports of the ‘death’ of the PSL – as once famously stated by Mark Twain – are greatly exaggerated.

In many ways, sport mirrors the broader economic climate and sponsorship by association is no exception. It’s of course true that traditional sport, like all business, is under more pressure than ever before. But whether we are speaking of the PSL specifically, or sport and the sponsorship market in general, it’s simply too early to pronounce on the long term impacts.

Yes, there will definitely be some casualties, a few market corrections and hopefully even some new brainchilds, but there is no doubt both the PSL and sport in general will bounce back. The underlying value is too great to simply be discarded.

For me, the more pressing question is, despite the challenges, how can we take advantage of this moment? I cannot remember a time in all my years in this industry where we have ever been able to push the pause button like now. So before we get going again and the opportunity is lost, now is our chance. We have a unique opportunity to review, rethink and where required, restructure everything – a period, if you like, of almost forced collaboration, where so much can be improved upon – so let’s not waste it.

Q: The sports industry in South Africa seems remarkably free of rancour so far during lockdown, i.e. no spats between rights holders and federations, no pushback from sponsors who aren’t seeing their product on television etc. Fair comment?

A: Yes, I believe this is currently a fairly accurate assessment. Ironically, our federations are for once in a more fortunate situation than many of their international counterparts because loss of match day revenue here is minimal. For most major sports bodies, leagues, teams, etc. they generally have four sources of revenue: Broadcast, Sponsorship, Match Day (ticketing and hospitality) and Merchandising and Licensing.

While broadcast and sponsorship are not surprisingly the biggest sources of revenue worldwide, the latter two can contribute up to say 30-40% in major markets. By comparison in South Africa, broadcast and sponsorship revenues (particularly for the big three) are often responsible for more than 85% of income.

Additionally, because there’s no play, there’s no travel, no accommodation, no opening up of stadiums, lights, security etc. and that can translate into short-term savings. Some federations (like SA Rugby) have reduced player salaries. Also, unlike Europe, for example, where Canal+, BeIN Sport and now others refused almost immediately to pay their final broadcast rights fee instalments to the associated leagues (LFP, etc.), our broadcaster(s) (SuperSport) has not yet blinked.

Most sponsors I have spoken with are looking for solutions and compromise – wait things out if you like, until there is more certainty – noting that by nature sponsorship is a long term partnership – so rash decisions to save a quick buck (no matter how necessary these budgets may soon become) could have significant strategic and public relations repercussions downstream.

Q: The lockdown happens when the sports industry in South Africa is already challenged?

A: Even prior to the COVID-19 crisis, we were asked by many of our clients to consider the impact on sponsorship media return on investment ROI arising from the lack of coverage this season/year by the SABC. Concerns had been further heightened by speculation that the ICASA Sports Broadcasting draft regulations will be pushed through in September – despite the significant challenges exposed during the hearings in early 2019.

The financial difficulties faced by the SABC are not new – but the impact this is beginning to have on sport and the sponsorship industry reached an unprecedented level when the 2019/2020 PSL season launched under a self-imposed blackout by the national broadcaster. Other major events of national importance including the 2019 ICC Cricket World Cup, Fifa Women’s World Cup, INF Netball World Cup, and IRB Rugby World Cup, which all featured South African teams received little or no coverage by the National Broadcaster.

And now – all bets – and arguably all live sport – are off for the time being

Q: Do you see the landscape plunging into complete crisis?

A: This really depends on whether or not SuperSport blinks – i.e. begins holding back on broadcast rights fees – and whether or not rights holders are prepared to find solutions for their sponsors and/or arrange for compromise payment structures. If, for example, SuperSport freezes all future payments to, say, the PSL until play resumes (an unlikely scenario), or, worse, pulls a Sky/BT sport and demand a refund, the house of cards could fall quickly.

Broadcasters have come up with different responses to the crisis of no live sport. For example: Sky allows customers to pause subscriptions during the pandemic; Canal+ makes premium channel free to view in response to Coronavirus; DStv has opened news channels for free, even to non-subscribers, and, in general, broadcasters are desperately trying to find ‘new’ archive content to fill the void left by the lack of live sport.

But broadcasters are faced with a two-sided coin: if they freeze subscriptions, the revenues required to buy or retain content dries up, but if they don’t, they risk retaining their premium subscribers who are receiving little extra benefit for the price. What’s really required is creative solutions and partnership with all stakeholders, especially with the fans in mind.

Q: Is there any upside to no live sport?

A: Despite the pessimism, there are upsides to the current moment. For example: The situation will create a buyer’s market for sponsorship rights. There will be huge value in the market for brands brave enough to commit budget rather than wait until a return to normality. Secondly, there is an opportunity for brands to support the sporting organisations/properties that will be most affected financially by prolonged disruption to the calendar. Thirdly, this is a unique opportunity for esport to shine – and reveal how powerful a platform this is to not only reach audiences previously difficult to find…but also how it can complement sport and sponsorship marketing efforts.

Finally, the period may allow time to connect with the most valuable asset for any rights-holder: the fan. It is time to build up a new view based on so-called ownership of data, engagement, and understanding the fan’s needs. As we near the end of the first phase relationship between sport and social media, largely based on huge over-claims of reach and relevance, we now need to take a closer look for evidence of deep fan engagement.

Q: How do you see the second half of the year sponsorship-wise?

A: There is evidence that suggests in times of trouble with reduced marketing spend from competitors, the opportunity to cut through the clutter is enhanced. These times require bold leadership and informed risk taking. To do nothing and wait for life to return to normal risks losing your opportunity to turn fan pain into engagement, appreciation and loyalty.

It’s equally important not to compromise long-term relationships or reputation by reacting negatively. In short, it’s a case of being practical and level-headed about managing the situation, but equally about being incredibly open towards finding the best fix to fill the void for all stakeholders involved. On the plus side – the crisis may lead to a better understanding of the interdependence of interests within the sports industry. We’re going to find out not just how resilient that ecosystem is, but how collaborative it needs to be for everyone to get through this.

If there is a silver lining, I believe we will come out of this period with incredible learnings around sports fans and their media consumption habits.

So maybe all of this, right now, is sport’s blank page.

BIO: David Sidenberg is one of the sponsorship industry’s most influential thought leaders and alongside his company BMI Sport Info, are credited for the lead role they have played in quantifying the impact sports marketing budgets contribute to their clients bottom line results.

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