"If one subtracts traditional discounts and the agency commission, self-promotion slots and advertising provided free for various reasons, the pool could be as little as R6 billion," he states.
"The second free-to-air television station, e.tv, was granted a licence in 1998 in the belief that there was room for it, but there wasn’t. E.tv "bought" market share by offering great value with dramatically reduced rates from early 2001, forcing the SABC and later M-Net to follow suit."
He continues by saying that from being a seller's market in the mid-1990s, there has been a strong shift in favour of the buyers. Though TV stations are 24-hour operations, most of their revenue comes from sales in prime time, between 5pm and 9pm.
"Right now, you can buy whatever you want," says Wilkins. "While print media can cut pages or increase advertising ratios in attempts to reduce costs, TV and radio cannot shrink their offering. Radio is suffering because of the of switch to TV as living standards improve."
Wilkins refers to the "shifting sands" of the LSM (Living Standards Measure). Half of LSM3 households (lower income earners) are now watching TV, so advertisers who previously used radio for downmarket campaigns are now turning to TV, and finding that costs per thousand viewers/listeners are much the same. Radio nevertheless has a 11% share of adspend, compared with only 4% in most western countries.
He says creative ideas are essential in today’s difficult market, and points to the phenomenal success of M-Net’s Big Brother as an example of what can be achieved through innovative TV programming in which sponsorships and associated projects can provide lucrative sources of income.
Innovation is also evident in growth of outdoor advertising’s share of the market, with the switch to big sites, initiated by former Ad Displays MD Barry Sayer, who now heads Clear Channel Independent.
"They work," says Wilkins. "You can cover the whole of Johannesburg with six big sites, which are very much easier to control than 50 or 60 smaller ones," He notes that in the UK, outdoor has a bigger share of the market than radio.
Wilkins advises media owners to remember that buyers can change their plans if they are offered a good deal. "If there is one thing that is flexible, it is the price," he says. "If the price is right, the buying plan can change, depending on the target market."
