A dashboard created by PayFast lets you see Black Friday and Cyber Monday spending in South Africa in real-time — and wow, people are…
Running your own business is hard work, especially when that business has been named Digital Agency of the Year six years running. Gloo, founded in 2005, is not what one would typically call a startup, as it’s a service-based business rather than a product-driven one.
The company is one of the most successful advertising agencies in South Africa and was recognised as such last year when it was named overall “Ad Agency of the Year” by AdReview Awards.
In our new entrepreneur series we feature the agency’s founder Pete Case, who has a graphic design background and is well known in the creative and digital community. Case argues that digital communications is quite appealing to investors and that it’s simply a case of gauging which will turn into a sustainable business.
The ad boss also highlights some key challenges that digital faces in the broader marketing world and the importance of building a unique business.
Ventureburn: How do you pitch digital media to VCs to make it appealing? Are local investors even interested in the digital space yet?
Pete Case: We’re not a media business as such — we are positioned in digital communications. The huge growth of Africa’s mobile industry as well as the innovations it has already produced mean that this space is already very appealing to both local and international VCs. The question for most VCs is which of the many digital communications startups in Africa will perform and grow into sustainable businesses, with clear differentiators, rather than whether it is an industry in which they should invest.
VB: Do you think it is a consumer, or market challenge that is preventing digital from taking over in the marketing space?
PC: There are many challenges, in connection with the relative immaturity of the South African market. The dearth of pure play digital agencies shows just how young our market is, as does the fact that many brands are only now appointing digital specialists to lead their digital marketing efforts.
I’d like to highlight three particular challenges:
Many agencies aren’t aware of how to use, charge for, and create creative solutions for the growing number of media spaces that digital has created. It seems easier and more profitable for them to book traditional media.
It can take people from two to three years to use the full functionality of new technology that they purchase, such as a smartphone. We need to educate users to accelerate their adoption of all the features and functions at their disposal. Not from a purely technical point of view, but from a lifestyle enhancing angle.
Lastly, there is a shortage of skills in the digital marketing space. The result is that there are few agencies offering deep integrated digital knowledge/services and there is a gap in the advice clients receive from some agencies.
VB: As digital penetration permeates South Africa and Africa, how do you aim to stay ahead of the curve?
PC: We try to resist the temptation to only sell what clients want now — we look into the future all the time. One aspect of this is staying close to the consumer — which is harder than it sounds because of the lack of sound research about the digital consumer in the South African market. Also the extreme pace of change that is taking place in this area locally.
Many marketers are still using outdated research, which doesn’t unfold the full picture of how customers are engaging with digital. As a group, we have recently bought KLA for its research capability, so creating our own consumer research is a major focus for us.
Secondly, we are trying to harvest data from the interactions that we create with consumers that will give us insight into our clients target audiences. Few brands are yet willing to invest in big data, but we’re taking a long-term view on just how important it will be.
Thirdly, we are looking at digital as part of the experiential space at events and in retail environments. We are increasingly using digital in the activation space — something that few local agencies have the skills for.
VB: Do you think the next generation of creators and thinkers will be African entrepreneurs?
PC: There’s so much entrepreneurship in Africa already that there is no reason to doubt it. I expect to see a lot of African innovation flow into the fast-growing BRIC markets, where African entrepreneurs have a bit of an edge. As Africans, I think we have a better understanding of the emerging market’s consumer geography than most multinationals from Europe or the US.
VB: What quality does every entrepreneur need?
PC: You need the focus to cut through the noise and focus on your own good idea, and you need to have the tenacity to keep working on it even after you have been rejected and rebuffed. You must take a long-term view and be willing to work hard to convince people about the validity of your business plan, despite many people trying to sway you from your path.
VB: Did you always know Gloo would become a successful ad agency?
PC: No, not at all. I came to South Africa fresh from the dotcom boom in the UK and we started Gloo when the bust came along. Everyone asked us what we thought we were doing starting a digital business in the middle of the bust and we knew ourselves that we did not face an easy ride. That’s where the tenacity paid off for us — we kept flying the flag for digital through the first four to five fairly difficult years. We were a bit ahead of the curve, but found ourselves well positioned when factors such as consumer awareness, connectivity, technology and so on started to align in a way that spurred growth for digital.
VB: What are your thoughts on the online advertising model?
PC: It’s still not well understood by most brands and agencies. There’s too much focus on measuring clicks and not enough thought on other areas of value such as reach and brand awareness. Brands need to learn to look beyond simplistic metrics to get a more rounded view of digital’s value. Also to understand that digital should not be valued in isolation. Our consumers live in a connected world, where they connect with many brand touch points in a day. They see one brand when they interact with a shopfront, then a billboard, an online banner and then a TV ad. So it’s this 360 view of influence that needs measuring and focus on — not just how many people clicked on an ad on one online platform.
VB: Which South African startup excites you?
PC: It’s not an ICT or digital business, but I love what Agriprotein is doing here locally. It is challenging multinationals by leading a new sector called nutrient recycling. It’s all about creating sustainable new approaches to pesticides and animal feed, and it could change farming around the world for good, as well as help our planet in a meaningful way. To me the greatest standout work, is when I see someone creating value on both a business, as well as an environmental or consumer benefit level at the same time.
VB: How is social integration changing the ad game?
PC: Brands need to be more honest and transparent, now that the consumer has a voice. They need to involve consumers in how they do business and evolve their products, because they are no longer controlling the message on their own.
VB: What is your take on South Africa’s copycat startup culture, where most businesses are clones of other ideas?
PC: For any business that is successful, most have found something unique to differentiate themselves – even if they started out by trying to improve someone else’s idea. There are plenty of original ideas from South African entrepreneurs — AgriProtein is just one of them.
VB: Do you think society is headed to a point where we are all entrepreneurs?
PC: It’s easier than ever to have a sideline business or to launch a startup. We have better access to information and the funds required to get a business going are less and less. A global audience can now be reached effectively via online. More and more people will be entrepreneurs at some stage of their lives, whether full-time or part-time, as technology keeps making it easier to do so.