The relationship between above-the-line advertising and below-the-line promotion spending in the marketing of South African products and services

Abstract

The rapid increase in the expenditure on below-the-line promotions (consumer and trade promotions, direct marketing, sponsorship and public relations) relative to above-the-line advertising (television, radio, print, outdoor and cinema) in South Africa has earmarked a new era of integrated marketing communication strategies across all sectors. Ultimately, this strategic shift has brought about a need to better understand the relationship between above-the-line advertising and below-the-line promotions and to measure the impact of such changes on company sales/profits over the long-term.

In the research undertaken amongst 250 senior marketing, brand and product managers of South African brand-owned companies, the relationship between above-the-line advertising and below-the-line promotions in the marketing of South African products and services was investigated across six different economic sectors. It was evident from the findings that most brand-owned companies currently integrate above-the-line advertising and below-the-line promotion activities. The study shows that most brand-owned companies in South Africa combine press, radio and television (above-the-line) with consumer promotions (below-the-line). The most frequently used above-the-line advertising medium is television, which is also seen as the most important mode to support long-term brand building amongst consumers. In turn, print is regarded as the most important above-the-line mode to support trade franchise building. Most frequently used below-the-line modes include direct marketing and public relations. Direct mail and cooperative advertising are seen as the most important below-the-line consumer and trade franchise building modes respectively.

Although marketing communication expenditure is positively skewed towards above-the-line adverstising, most recent trends show a gradual increase in the use of below-the-line promotions. To prevent a brand's sales/profits from decreasing over the long-term due to too high below-the-line promotional expenditure, the study encourages a sound balance between above-the-line advertising and below-the-line promotions. Although the ideal ratio of above-the-line advertising to below-the-line promotions is related to the nature of the product and service being marketed, the extent of competitive activity in the market and the frequency of purchase, amongst many other salient factors, the study regards a 60/40 ratio as the most ideal for building long-term brands. On the other hand, a ratio of 35/65 is regarded as the critical point at which company sales/profits may deteriorate because of too high below-the-line promotional spending.

In conclusion it can be said that the marketing communication industry of South Africa has entered a period of integrated marketing communication practices which requires sound marketing communication budget strategies conducive to the long-term survival of South African products and services.