Clock ticks for ad agencies

December 1, 2017



As the ad industry’s BEE deadline draws closer, most agencies blame the slow pace of change on a lack of talent and the cost of hiring in a weak economy
SA’s advertising industry, long under pressure to alter its racial profile, seems ill-prepared for impending ownership changes that must be implemented by early 2018.


New Broom Award: Think’s Nkgabiseng Motau (left) and Mukondi Ralushayi.



Early next year the revised marketing, advertising and communication sector BEE code will require agencies to increase black ownership to a minimum of 45% from the current 25%. Yet there appears to be a startling lack of urgency. According to bespoke new research conducted for the 2017 edition of AdFocus by Tiso Blackstar (owner of the Financial Mail) only 6% of respondent agencies said they had reached the required empowerment targets.


 Big winner: FCB Joburg, winner of the AdFocus 2017 Overall Agency of the Year and Large Agency

of the Year awards. Picture: MICHAEL EDWARDS / DPI PHOTOGRAPHY



While 20% said they had plans in place which were being implemented, 17% said plans were in place but not being actively implemented. A further 20% said they had not started the process, and the rest were not sure of their status.


The survey was launched at the 2017 AdFocus awards where 21 agencies were shortlisted across six categories.


By and large the slow pace of change has been blamed on a lack of black talent specific to the sector and the increasing cost of hiring in an economy where brand-spend is diminishing. Of most concern to the industry will be that almost 60% of agencies wanting to offer shares to black partners claimed they could not find the right shareholders.



 The MediaShop: Network Media Agency of the Year and Transformation Award.




As the deadline clock ticks, almost one quarter of the online respondents believe the 45% target is completely unachievable.


Marketers are watching with a degree of trepidation, with half of those polled saying the new ownership requirements will have a "drastic influence" on their relationship.


Many believe ad agency transformation "has not been obvious" and that in many instances "the old guard is still in charge".






Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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