Presentations by Advertising and Marketing industry: Progress Report: Programme for government's contribution to transformation of advertising and marketing industry

19 October 2004

1. Introduction: Government's Programme of Action - a framework for transformation

Following the Portfolio Committee hearings held in November 2002, Government Communications (GCIS), the Department of Communications (DoC) and the Department of Trade and Industry (DTI) developed a framework to guide interventions by government and the industry to accelerate transformation.
This framework was endorsed by Cabinet in April 2003 and included specific actions to be pursued by government to promote transformation in the various dimensions of empowerment and representivity, e.g. procurement, ownership, employment, training and development.

2. Structures and processes to guide and sustain the transformation process

To continue the process of engagement between government and the industry (which was initiated during preparations for the Parliamentary Hearings in November 2002), a joint Monitoring and Steering Committee was established in April 2003. The heads of the various industry bodies and relevant government departments are represented on the Committee and meet monthly to co-ordinate and track action to promote transformation. The Media Development and Diversity Agency (MDDA) and the Media, Advertising, Publishing, Printing and Packaging (MAPPP Seta) recently became members of this Committee.
The commissioning of an empowerment survey to help develop benchmarks and transformation targets, formed the main focus of these deliberations. This project is underway and the Committee will report back to the Portfolio Committee on the findings, and their implications for the industry, early in 2005.
Within government, an interdepartmental structure was established in September 2003, comprising GCIS, DoC, DTI, Public Service and Administration, Arts and Culture, Education (DoE), Labour, and National Treasury. The structure meets on a monthly basis to co-ordinate and monitor actions of the following kinds:

2.1 Adspend

• GCIS issued guidelines to all departments in February 2004 to promote a shift towards an advertisisng pattern that is more representative in its reach. The guidelines recommend improved use of the media consumed by the lower LSM groups, namely ALS radio stations, community radio and community newspapers as well as other alternative below-the-line communication vehicles, like Izimbizo.

• GCIS compiles reports twice per year to track progress towards more equitable adspend. However, as these reports are currently based only on media placement procured by GCIS on behalf of government departments they reflect only a portion of government's adspend. A comparative analysis of the reports for 2003 and 2004 shows a notable shift in the spending patterns for government campaigns with reference to radio and print. In the period January to June 2004, spend allocation for radio was 33% compared to 18% during the same period in 2003. Spend allocation for newspapers decreased from 59% in 2003 to 48% in 2004. To improve progress-tracking of equitable government adspend, National Treasury is preparing a practice note which will be issued to all accounting officers. The note will encourage all departments to participate in the GCIS bulk-buying contract for media placements.

• Efforts towards transformation include asking Heads of Communication to sign the Values Statement and incorporating the promotion of equitable adspend in their key performance areas. All departments are participating in the BEE Monitor survey.
  " In February 2004, the DoC commissioned a repeat of the Advertising Transformation Index Survey, which was presented during the Parliamentary Hearings (2002). The research tracks progress since the first survey and advertising expenditure patterns within the advertising and marketing industry. The study found that gaps between government advertising spending profile and audience profile - though narrowing - still exist.

2.2 Preferential procurement

• Government procurement of marketing and advertising has been taken up in the context of a National Treasury process towards transformation of its Preferential Procurement Policy Framework to comply with Supply-Chain Management principles and practices.
• During discussions with the industry, the interdepartmental team was alerted to the fact that government departments' handling of advertising tenders sometimes impacts negatively on small emerging Black-owned companies.
  Among the concerns raised are the following:
  • specifications and briefs for advertising campaigns are often vague and lack information on the applicable evaluation criteria
  • emerging Black-owned companies struggle to compete due to the costs involved in preparing strategies and creative concepts prior to the short-listing phase
  • 'short-lists' consist of 17 companies or more>
  • lack of communication to tenderers on the status of tenders. Agencies thus sometimes incur costs to pitch for tenders that have been withdrawn.
• The concerns raised have informed the work of a joint government/industry task team, working with National Treasury, towards best-practice guidelines for the procurement of marketing and advertising.
• An extended meeting of the Monitoring and Steering Committee during June 2004 discussed draft guidelines. Once finalised, the Guidelines will be distributed to Heads of Departments, Departmental Heads of Communication, their counterparts in parastatals and industry members. We intend to finalise the Guidelines by the end of 2004.
  

2.3 Employment

• The Department of Labour has started investigations on ways in which existing employment-equity reporting models can be adjusted to facilitate a review of representivity at managerial level, e.g. over a period of five years. The Department is also exploring if this data could be tracked per sector.

2.4 Training and development

• Exploratory discussions have been held with CREATE SA (a National Skills Fund Strategic Project of the MAPPP SETA. Mechanisms to accelerate skills development among previously disadvantaged staff already in the industry are being discussed with the MAPPP SETA.
• GCIS and other relevant departments have been invited to participate in the discussions of the MAPPP SETA Chamber.
• The MAPPP SETA is investigating the commissioning of studies to enhance understanding of the dynamics of supply and demand of equity candidates. However, due to the restructuring of SETAs instituted by the Department of Labour, further attention to this project proposal is being delayed.
• Through the DoE, the MAPPP SETA is also engaging the Further Education and Training (FET) sector to sit in the various chambers. This will nurture broader understanding of the needs of the industry, thereby influencing curriculum design and development by the FET sector.

2.5 Progress with regard to the regulatory framework

• DTI submitted the Consumer Policy Framework to Cabinet in September 2004 for approval. It will provide a broad framework for consumer protection including a framework for fair business practices in advertising to ensure that consumer welfare is protected. It proposes a streamlined and more effective institutional framework, including:
  • a national consumer commission with provincial counterparts
  • a national consumer helpline
  • a national awareness campaign and formal consumer education programmes.
• Public consultation on the framework, now underway, will close on 9 November 2004, after which draft legislation will be formulated.

3. Conclusion

A review of progress on the implementation of government's Programme of Action indicates that some advancement has been achieved in the various dimensions of empowerment and representivity, but that the core intentions of the Programme have not been fully achieved.

Priority attention will be given to the following initiatives during 2005:

• Closer alignment of parastatal procurement policies and practices in marketing and advertising with those of government.
• The adjustment of existing employment equity reporting models to allow tracking of representivity at managerial level.
• More frequent engagement with the MAPPP and Services SETAs to promote the introduction of programmes to accelerate skills development of HDI staff already in the industry.
• The submission of an annual progress report to the Portfolio Committee on Communications.
• Addressing under-spending on Blacks living in rural areas with regard to advertising. However, uneven access to the media put some constraints on how far this can be changed. Closing the gap will not be enough to ensure equitable access for all citizens to the information and opportunities communicated through advertising. Further progress is also needed in expanding audiences by extending access to all forms of media.

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