Difficult times demand innovative ideas, and media companies are responding imaginatively to the tightest market in many years.
Connie Molusi
The television industry's total revenue failed to improve in 2001 for the first time since the launch of commercial television in 1978, and growth is unlikely this year. Newspapers are battling to maintain sales figures as the print industry loses adspend share to TV - though figures are disputed - and other media sectors are fighting harder than ever for a share of the diminishing cake.
Apart from the economic downturn, the ban on tobacco advertising has contributed to the decline in above-the-line adspend, and a possible prohibition of liquor advertising would give another boost to below-the-line activity.
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Media strategist Paul Wilkins says media companies should heed the words of comedian/philosopher Groucho Marx: "When the going gets tough, the tough get creative." Many of them have done just that, and their innovation has resulted in some remarkable success stories.
Top of the list must be Big Brother, the reality TV show that shattered audience and revenue figures for M-Net, set a trend in sponsorship partnerships with advertisers and gave new meaning to the term multimedia, involving viewers at every opportunity. The same formula is being followed in Idols, the pop star hunt.
Newspapers, while making the most of the rub-off from the TV shows, have also sought closer ties with major advertisers. Partnerships linked to publishing projects have helped the country's biggest newspaper, the Sunday Times, to the best financial year in its history. It has the unusual problem of keeping sales down to the 500 000 mark, to avoid huge escalations in production costs as sales increase above that number.
Circulation figures have generally been static for the dailies, but the weekly market has featured a feisty battle among the black-interest papers, where a revitalised Sunday World - a joint venture between New African Investments Ltd (Nail) and Johnnic - and Media24's new Sunday Sun are prospering at the expense of that company's long-established City Press.
While mainstream companies work at cutting costs in the face of a crippling increase in the price of newsprint, their spokesmen stress their optimism. "We've got our costs right down and feel we can cope with the current situation, and worse, without any titles being threatened," says Independent group CE Ivan Fallon.
Independent launched its first Zulu-language daily, Isolesizwe (Eye of the Nation), in April, and is excited about its prospects.
While alleviating poverty remains a national priority, an encouraging development affecting all types of media is the rise in living standards among urban blacks. This is shown in living standards measures (LSMs), Statistics SA figures and other research.
One effect has been a switch by some advertisers from radio to TV for campaigns aimed at the lower end of the consumer market. Another is the decision by the country's biggest daily, the Sowetan, to raise its sights and target a more affluent share of the market. Johnnic CE Connie Molusi says black women now constitute the majority of readers of Elle, the sophisticated women's magazine.
A remarkable manifestation of media innovation has been the inspired strategy of the biggest Afrikaans media group, Naspers/Media24, to promote itself in English. It has accepted that in modern SA many media planners and buyers are young, black and English-speaking, so it produces its marketing material in English - brightly presented, well-written and containing a powerful message on the strength of the Afrikaner consumer market.
Community newspapers throughout the country - such as niche magazines and regional radio stations - appear to be coping well, and for those without the resources of strong parent companies, help is at hand in the form of the Media Development & Diversity Agency Bill. This is aimed at assisting community media organisations serving poor rural areas. Mainstream companies are committed to supporting the move, and are likely to be required to do so through a levy based on their gross annual revenue - yet another incentive to make innovation work.
Broadcast media companies hoping to expand through acquisitions have been frustrated by industry regulations, and little activity is likely while the Independent Communications Authority (Icasa) reviews restrictions on the number of licences companies may hold. It is expected to produce a discussion paper by midyear.
"Changing times demand new approaches from media companies, but if your brand is strong you can continue to make an impact," says Molusi.
Molusi says the print media are facing perhaps their toughest challenges in 20 years due to major increases in the cost of newsprint and a soft advertising market. Marketing budgets are increasingly going below-the-line - to events and sponsorships, which companies can tailor to their brands' needs, thus achieving greater benefits if they are well handled. This trend suits TV and radio more than print, which has to shift its focus to customer relations rather than just sell white space.
"We must offer a solution to the customer's needs by showing what we can deliver beyond the traditional advertising environments, backed by strong editorial support," says Molusi. "This can be achieved if your publication has a dedicated team from sales, marketing and editorial all working together, without compromising editorial independence for commercial imperatives."
He says the Sunday Times is a prime example of a strong brand that has excelled in working with clients on mutually beneficial projects. "We are harvesting the fruits of years of hard work and investment in terms of the paper's circulation. It has shown that despite a general decline in readership in the English press, there is still scope for growth if you have a strong brand, deep reach into the community, and brand loyalty."
The Eastern Province Herald is also producing interesting lifestyle and entertainment supplements, which offer clients a strong platform for their marketing spend and enhancement of their brands in a way that is attractive to readers.
On cost-cutting, Molusi says retrenchments are a last resort because the quality of the products must not be compromised. "This is a cyclical business and when the upturn comes, you must have the capacity to continue producing quality publications. We have done well in reducing costs, and have a lower cost base now than we had two years ago."
There have been strong measures to cut costs in producing Johnnic's magazines. Three divisions have been consolidated into one, all operating from the same premises and utilising the same infra-structure.
Printing contracts are being consolidated, thus providing "critical mass" and bargaining power.
Molusi says the consumer magazine field is a difficult one, largely because of the ever-increasing number of international titles. A new agreement with the owners of women's magazine Elle allows Johnnic to align itself with the local market and look at local pricing structures.
He sees big opportunities in cross-selling advertising between titles such as Elle, Elle Décor, Longevity, SA Home Owner and Computing SA. "Our approach as a group is to focus on the client, offering multimedia solutions through our general interest newspapers, financial titles and niche magazines, as well as an online presence through Johnnic E-Ventures. With these platforms for cross-selling, we have huge opportunities to improve our market share."
