Head of the Advertising Association of Jamaica (AAJ) Arnold “JJ” Foote shared with the Jamaica Observer that the upsurge of advertising seen with traditional media in the final quarter of 2021 is only one plank of what companies are doing to recover revenue under conditions “which are not normal”.
Companies, he said, are also looking at savings and efficiencies which Foote expects will improve products and services for consumers as well, providing more convenience along the way.
He also projects that the mainstream media advertising jump, which is “natural for Christmas”, will fade into “a different approach going forward as people become more digitally focused.”
Foote states, “The digital exposure which is direct to phone and direct to computer, interferes with personal time and will eventually result in a return to traditional media but not until 2023-2024.”
With the world entering a new phase where interaction is conducted digitally and remotely, marketing communication is being seen as a new tool to reach the consumer, a new adjunct to business continuity, increasing communication levels on behalf of clients, at levels never before seen.
Steven Gooden, chairman of advertising company The Limners and Bards, said in that company's last annual report which looks at the 2020 period, “Some thought that COVID-19 would sound the death knell for all creative entities including advertising and production houses like ours…at the height of the pandemic, when we were at home under mandatory lockdown measures, it was the work of the creatives that breathed life into an increasingly mundane existence and gave us hope.”
Even though many company's slashed their marketing and advertising budget in the first few months after the advent of COVID, a turnaround was seen in 2021, as competition for the limited dollar in a recovering economy ensued.
Advertising and marketing have become a means for companies which are physically distanced from the client to remind them of the products and services available and to keep product brands top of mind.
Listed company Radio Jamaica Limited, which sells displays and classified advertising spaces in its newspaper publications, internet sites, and also sells airtime for advertising on the radio, television and cable to customers, in its 2021 annual report indicated that while revenue fell in some segments it climbed in others.
Print circulation and advertising revenues fell 21 per cent and 27 per cent from 2019 results, but a revenue increase of $162 million in the audio-visual segment was generated mostly from “COVID-19-related income from the programmes and production, advertising spend for the general elections and new entrants to the advertising market,” the company noted.
The group reported a five-year high of $171 million in profit for the March 2021 financial year and for the second quarter ended September 30, 2021, stated profits of $27 million, a reversal of the $67.97-million loss for the similar July-September period in 2020.
Radio Jamaica reported $137.46 million in year-to-date profits for the six months, a turnaround from the $66.47-million in 2020. Six-month revenues stood at $2.86 billion, which was 24 per cent more than the $2.3 billion for the similar period in 2020.
Limners and Bards
Management outlined in its management discussion for The Limners and Bards (The LAB), which offers integrated marketing solutions for brands, “Reflecting on the previous fiscal year, the production segment was significantly affected due to COVID-19 official travel bans and restrictions that disrupted local and regional economic activities.”
However, it was noted, “This potential threat to our traditional operations, however, was mitigated with the creation of imaginative sets and virtual participation by clients in the creative process.
“To bridge the gap in the potential financial fallout in our production arm, due to the resultant safety and restriction measures in response to the pandemic's impact, there was an exponential growth in our agency and media offerings”
For the nine months ended September 2021, The LAB recorded revenue of $942 million, up 37.3 per cent from the $686.2 million recorded in the corresponding period last year.
The revenue growth was driven by growth in media placement (up $142.4 million or 39.4 per cent) and production (up $115.9 million or 62.2 per cent). There was reduction in agency (down $2.4 million or 1.8 per cent) during the period.
Gross profit increased by 25.2 per cent or $57.4 million over the previous nine-month period. Gross profit margin of 30.2 per cent decreased from 33.1 per cent recorded in the previous period, attributed to costs of production and media placement.
Foote told the Business Observer that from the perspective of his company, a full scale recovery was not the case. He reflected, “In 2019, the industry was strong and vibrant. When COVID came most people were projecting an end by December 2020. When that did not happen, businesses had to make decisions. As they approached 2021 they had to refocus their efforts to get back to business as usual even though it was not business as usual.”
He added, “The curfews affected every industry from gaming to retail to alcohol. As far as our agency goes, from a personal perspective, we are pretty much exactly where we anticipated we would be. There is a focus on business recovery. It is every part of the business which is being looked at by companies, not only advertising spend.”
He said that revenue data from the industry were not available, as all companies are private, and companies are committed to keeping the details of marketing budgets confidential. The LAB is the only public company among pure advertisers and is listed on the Jamaica Stock Exchange.