[2009 trends] 'We are in for a very very tough year...'

I know that a number of people are saying that we will start coming out of this downturn (recession) by the end of the first quarter. I think that this is seriously optimistic, and while I hope they are right, I'm pretty sure that this won't happen. In fact, I don't think you will see a recovery before the end of the year, and this will rather be an upswing because advertisers will spend the budgets they've held back in hope of making up sales over the Christmas period. I think we're going to be in trouble for a lot longer than initially thought!

What's going to happen in 2009? We've already seen a number of rate increases from the print media, ranging from 6 to 12%, which is interesting seeing as we're not seeing increases in client budgets. In fact, I would estimate that possibly 10 - 15% of client will increase maybe 8 - 10%, 40 -50% might increase by 4 - 8%, and the balance (35%) will probably not increase at all; some might even decrease their ATL spend so that that they can do more BTL.

This means that the industry might optimistically see media budgets increase by 5 - 6%! And believe me, this is very optimistic!

So what does this mean?

• Clients could streamline their media selection and only use one or two media types instead of three, or even down to one.
  
• Ad sizes could shrink, but this is dependent on the creative concept.
  
• The demand for bigger discounts will certainly come into play.
  
• More added value will be demanded, so that clients can really stretch their budgets.

But how can we ask for bigger discounts and more AV if we're spending less?

Cut, cut, cut

In my mind, which is the best option for clients? I'd recommend cutting down in size (if the concept allows).

Cut your TV and radio spots from 30 sec to 15 or 20 sec; just doing this will save (or add) 20 - 30%.

Cut the newspaper ad from 54/55x10 to a 45x8; you are still page dominant, no other advertiser can be on the page and your cost saving will be 35%.

Just by taking the size down slightly, the saving can be enormous and this is especially important to clients who run high frequency campaigns. So no more 60, 90 or 120 sec commercials - they are a luxury that has become unaffordable.

Let's keep talking about electronic, TV specifically, because the other problem that advertisers face is the PVR. Sure, it's only at the top end of the market, but this is a really important market to a lot of advertisers. Because consumers can fast forward your spots - or skip them completely - this makes TV an even tougher nut to crack. Consequently, commercials aimed at the top end of the market will have to start working on fast forward, which means a whole different creative approach, and/or there will have to be more product integration into shows.

What this means is that we, as an industry, will have to get more creative with what we do with this medium.

Print media are probably the most vulnerable. We've already seen a number of titles close in the last 12 months; this is just going to get worse. We're now seeing media releases talking about retrenchments; this is good and bad. The good is that it allows companies to get rid of 'dead wood', the bad is that it can be extremely disruptive and destabilising to the business as a whole.

Cutting back on staff will certainly not be enough; print is going to have to find other ways to keep overheads down (especially as paper and ink continuously go up), so maybe we will find that the number of pages in our newspapers is reduced and that they can only take a certain amount of advertising.

This already happens with a number of the larger titles in Europe and the US and what it does is forces agencies/clients to book early so that you can secure space. But the discipline that is required is not something I think the SA market is used to: we like to book last minute!

Clean up

Over the next year we're certainly going to see another 'cleaning up' of the outdoor industry. The big guys will buy out the smaller shops, those with decent sites, and there will be a lot of culling of marginal sites.

What's exciting is all the new media opportunities in the out of home space. Just as an example, there is a new medium that gives a whole new meaning to window-shopping! There are so many different forms of experiential marketing and activation marketing that this section of out of home could become its own category soon.

Everyone talks about online replacing TV and a research company actually said to me that it could see this happening in SA in the next three-to-five years. Well, I did laugh - sorry if I'm offending online people. But, honestly, this is a medium that currently attracts 1% of media spend, whereas TV attracts over 50% (as per AdDynamix) - how is online going to replace TV?

I can understand that online can and will make serious inroads into TV media spend in first world countries, but not here! Not for a very long time... But let's be fair, online has come a long way in SA and it will continue to grow, but slowly.

So 2009 is going to be a very, very tough year. Every single media owner will feel the pinch, as will every agency. Traditional media will command the largest segment of the media pie, at the expense of the smaller media types. It will be a real battle for any new media to come into this market. Advertisers will not take risks in this depressed market; they will want the tried and tested media, where they know that there is no risk of them not being able to prove that they've delivered a cost-effective audience.

I'm not looking forward to 2009 at all...