Transformation of advertising & marketing industry: Government report: Understanding government spending trends in advertising and marketing

13 November 2002

- Government Communication and Information System, Departments of Communication, and Trade and Industry

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This summary highlights trends in government expenditure on advertising and marketing as shown in research reports submitted to the Committee. It indicates measures that can help address imbalances in government spending.

Two broad areas are highlighted, namely adspend and procurement, which impacts on ownership and representivity in the industry and its suppliers.


Representivity in the employee and ownership structures of the industry

Government notes the lack of respresentivity in the employee and ownership structures of the industry shown in the Prodigy Baseline Research Report.

Procurement policy provides government with a mechanism that can promote Employment Equity. Tender regulations require a minimum level of representivity in ownership to be taken into account, but there is scope to include further aspects, as some departments do, such as employee profile; affirmative HR policies; and requirements in outsourcing components of contracts.

Other steps that could promote representivity in employment structures would involve interaction in particular amongst the Departments of Education, Labour and Arts & Culture and the Sectoral Education and Training Authorities (Setas):

  • Bringing people into, and creating a representative pool of people that can be employed in the industry.
  • Looking at ways in which the Department of Labour could obtain information from the industry through Employment Equity reports to reflect transformation at top, middle and semi-skilled ranks. This would allow the monitoring of representivity across the board, and not only at the semi-skilled level.
  • Government interaction with Setas can help ensure that industry needs are met with regard to ongoing education and skills development. This would ensure that both the industry and government make use of the money that Setas supply to equip employers with the necessary competencies to facilitate skills development of previously disadvantaged employees.
  • Taking steps to ensure that schools with pupils from the previously disadvantaged communities have the resources to teach relevant subjects for entry into the secondary education institutions that supply the industry.


Government notes the findings on government departments' adspend. The ATI Report of 4 September 2002 records media spending of R8,5 billion in 2001. Of this, R123 million is recorded as government spending.

The study only analysed adspend of R87 million by government, which excludes the estimated R30 million on recruitment advertising, below-the-line spending and an estimated R32 million outdoor.

Government spending patterns

Government communicates all its messages to all LSM groupings. This means treating all citizens equally in terms of access to government information.

The ATI Report records that 55% of government adspend went against LSM 6-10 vs. 35% of the population.

Although this is much better than the situation for private sector adspend, Government does still need to acknowledge that the LSM groups 1-5 are economically disadvantaged by their access to media and fair advertising. However, this group, representing 65% of the South African population, has impacted fundamentally on the democratisation of South Africa. They gave birth to, nurtured and educated the political and economic leadership of the country today. They have given value systems to the children of the nation and are the parents of the youth who in 2006 will become part of the secondary education system and job market. It is, therefore, imperative that this market sector not be neglected as it constitutes the citizens who gave life and impetus to our democracy.

Breakdown of government spending per media type

The R87 million government adspend analysed by the ATI Report constitutes the following spend per media type:

  • Radio at R38 million,
  • Newspapers at R33 million,
  • Outdoor at R32 million and
  • Television at R16 million.
  • Less than R1 million for magazines.

Government notes the ATI conclusion that Government has underspent against African, Coloured and Indian citizens. Government, therefore, needs to commit itself to analyse the target markets it needs to speak to and tailor its messages to specific groups along the lines of language and access to resources.

It needs to address the fact that a campaign is not a medium issue alone - it is also about segmentation of the target market, the best ways of reaching different segments, and the content of the message. For example, if government needs to communicate to the beneficiaries of social grants on the need to register, it should do so through African language stations, community radio stations, the Sowetan, and community and African language newspapers. However, government also needs to communicate to target markets that include those who while not potential beneficiaries of grants, could volunteer to assist in the registration of social grants - they would be addressed through higher LSM channels, e.g. KayaFM, MetroFM, Lotus, SAFM and YFM. Further messages in print could tell people how to register, what the registration form looks like, and where they can register.

Such an approach will ensure selection of the most appropriate medium in terms of content and target market. Similar consideration applies to parastatals whose expenditure on advertising and marketing is substantial and to all the institutions of our democratic system.

Measures towards representivity

The above measures and others can be used by government to promote representivity in the industry and equity in spending:

  • Ensure that representivity in the industry is addressed through ongoing education and skills development programmes offered through education, Arts & Culture and Seta
  • Conduct research on its below-the-line spend to get a clearer picture of the entire scope of government spend
  • Commit itself to assessing its adspend across all LSM markets, especially LSM 1-5, and to work towards communication of service delivery and information that would promote socio-economic improvement for this sector
  • Analyse target markets appropriately and tailor message to specific groups along lines of language and access to resources
  • Commit itself to ongoing dialogue with civil society and parastatals
  • Find a way to ensure more equitable adspend investment against African, Coloured and Indian citizens and the mediums they consume
  • Address overspending on niche markets aimed at affluent sectors, when the message is not targeting that market
  • Monitor adspend of particular departments to promote use of the most appropriate channels and ensure that peer assessment of Heads of Communication also addresses this issue.


In conclusion, government would like to commend the industry for its commitment to transformation and welcomes the restructuring of media planners into the Advertising Media Forum (AMF), the advertising agencies into the Association for Communication and Advertising (ACA), and the marketers into the Marketing Federation of South Africa (MFSA).

However, the two research studies reflect a very slow rate of transformation in this industry. Transformation will only continue if such studies are repeated repeated annually in order to monitor transformation, and if findings are acted on. True transformation of the industry is not possible without the endorsement and championing of transformation at strategic management and board level through all of the individual companies.

Government also needs to look into its procurement processes to entrench the awarding of contracts to companies that show a dynamic transformation rate and reflect true PDI equity.

With regard to adspend, government needs to undertake research to analyse communication spend by national, provincial and local government on recruitment, below-the-line and direct marketing to ensure a more equitable investment in terms of African, Coloured and Indian adspend.

Government needs to consistently address the fact that service delivery to the lower LSM markets will continually bring changes in their access to media channels and that this will in turn require government to constantly assess the channels it uses for communication.

- Government Communication and Information System, Department of Communication, Department of Trade and Industry