Lwazi Mhlongo, media planner at The MediaShop, asks if consumer pressure is in danger of being elevated to level 6, or higher.
It’s the year 2022 in the eighth month, and the country has emerged out of Lockdown as a result of the global Covid pandemic. Petrol prices have skyrocketed to unprecedented highs, loadshedding intensified and interest rates are sitting at 5.5% – the highest since 2016. You’d be forgiven to think this is a teaser script from a financial crisis movie, but this is the reality engulfing South Africa right now. What does this mean for consumers and brands?
One of the effects of loadshedding is its impact on brand return on investment (ROI). It goes without saying that power cuts disrupt regular life as we know it. Therefore, how media is consumed is also greatly affected. Think about your favourite programme that you watch every night at 8 pm – if you want to watch it live, chances are you’ll miss it if loadshedding is scheduled at the same time for the bulk of that week. So that means you will miss adverts scheduled for that period. The implication on campaign performance and brand exposure cannot be underestimated, consequently so will ROI.
The relentless power outages also continue to impact business greatly in South Africa, especially our small businesses – a crucial sector to the economy. The SME space is the hardest hit forcing a number of operations to shut down as they can’t afford back up power. This of course cascades down to job losses and a further dent on the GDP.
Over and above that, inflation (7.4% in June 2022) naturally hits hard on consumer’s pockets, forcing them to be even more frugal. What this means is that there is great scaling back to ensure survival (its survival mode now). Consumers will therefore decide to rather bake than buy bread, eat at home rather than visit their favourite restaurants. We are already seeing subscription numbers dwindling to some of the major video content platforms.
This is a critical time for media agencies and media owners to start looking at an optimised media approach to ensure continuity in media consumption and preserve ROI. Media touchpoints and how they are utilised will be the key driver. The ultimate objective is to sweat various touchpoints to ensure audience is not lost when it goes dark.
Brands also need to come to the party to cushion the pressure on consumers. This support can be in the form of a price freeze, discount offers, and escalating benefits customers qualify for. We have already seen FNB offering eBucks fuel rewards to their customers. The other consideration is to explore the option of lobbying the government for a price subsidy. We have seen the possibilities with the fuel levy relief and the R350 grant as well.
It’s all hands-on deck now towards easing the burden on consumers. Media agencies need to think out the box more so than ever to ensure continuity in media consumption in light of the current challenges. Brands need to play a more proactive role in coming to the party for consumers to ensure survival. Collaborative and strategic efforts will work in offsetting far more damaging repercussions than already experienced.
THE MEDIASHOP
www.mediashop.co.za
