Spenders sit it out

The large business media houses, both print and television, are being shown the red card by a number of their big advertisers - their "R1m clients" - in the buildup to and during the soccer bonanza.

It's the "clutter" factor, say sales and advertising executives. "When we talk to companies about advertising in May, June and July, the general feeling is 'we're not doing that much'," says an advertising executive of a leading financial publication.

The reasons cited by companies range from "there will be too much noise from the main sponsors and we will get diluted" to "business will come to a standstill, so advertising will be pointless".

With First National Bank a major sponsor, the other big banks - Nedbank, Absa and Standard - have pulled back on product advertising. So have some big mining houses, financial services companies such as Alexander Forbes and parastatals, which ad agencies say are large spenders.

"We're seeing it across the board. Companies don't want to get lost in the domination of the official World Cup sponsor advertising," says another sales and advertising executive.

But this trend seems to have affected mainly business media houses, which have been trying to recover from the knocks of the recession. Though there was an advertising revenue upswing in the first quarter, forward bookings for the rest of the year are down.

"Bookings for at least the next three months are looking very bad. In the past we've seen advance booking, but this year companies and advertising agencies are leaving it to the last minute," says the last-mentioned executive.

This makes it difficult for media owners to predict their ad revenue for the year. "There are signs of activity returning in August, but it's all guesswork," says a business television sales executive.

There is definitely a shift. For television, winter months are traditionally peak viewing time generating good advertising revenue. "What we're seeing, however, is clients saying they will come back in August, which is not a high advertising month for us," says the television executive. "But there's no guarantee they will return, as they might overspend on other marketing activities and events during the World Cup, leaving little money for the rest of the year."

Most companies are spending on advertising around World Cup "touch points", such as the airport and fan parks.

This seems to be a local trend. The opposite happened in Germany, which hosted the World Cup in 2006. There, major international brands and businesses battled it out for dominance of presence, with big advertising firms spending a record £1bn.

Source: Financial Mail