International Marketing Council & Media Development and Diversity Agency Strategic Plans & Budgets 2010-2013

Meeting report

International Marketing Council of South Africa (IMC): Strategic Plan 2010-2013
Ms Anitha Soni, Chairperson, The International Marketing Council of South Africa, introduced the Strategic Plan for 2010 to 2013 of the International Marketing Council (IMC), in compliance with section 53 of the Public Finance Management Act (PFMA) and Section 5 of the National Treasury Regulations. The plan was developed in the context of the IMC's mandate, as revised in 2009, as well as the national imperatives of South Africa, including the Medium Term Strategic Framework. It was a three-year rolling plan, and built on the strategies and activities of previous cycles which overlapped into this cycle. The projects and activities were aligned to the budget allocations provided through the Medium Term Economic Framework (MTEF) process. She noted that whilst the briefing gave an outline of the projects, the details of activities to achieve each strategy was contained in the business and operational plan document.

Ms Soni said that it was vital to obtain positive media coverage for South Africa, especially in the remaining 91 days until the FIFA Soccer World Cup. She believed that this was an opportunity to influence the agenda of the media, and it was one of IMC’s key focus areas. IMC considered itself proactive. She noted that some patriotism by the media would be useful, and this should be supported by intelligence gathering and the establishment of a knowledge bank. Already, IMC gathered data from international or local agencies. Thereafter it would study trends in order to ascertain where to concentrate its efforts.  IMC was an organisation that valued co-operation and partnership inside and outside South Africa in order to promote South Africa and profile countries and markets. An example was Davos, where South Africa had taken the centre of the stage. IMC had taken a delegation there to showcase South Africa, and for the first time there was representation from the provinces, working together in partnership. IMC also sought to use key events as leverage.

Ms Sophie Masipa, Marketing Manager, IMC, gave further details of IMC’s programme of action, its realignment, and its knowledge management system. She referred to a slide on preparation and gathering intelligence. The defining moment since 1994 had been the 2010 World Cup.

Ms Soni highlighted that IMC had a domestic focus and a national vision, that were driving South Africa to be acknowledged among the top 20 national brands and in the top 30 in the competitive index. On the basis of this mandate, IMC sought to achieve the annual national brand targets and to achieve cutting edge and business sustainability. It measured objectives by strategies. She spoke of the brand strategy being supported by organisational development. IMC was not a competitive organisation. It worked in partnership with and was supportive of consulates and embassies. Ms Soni referred to partnerships with the South African Broadcasting Corporation (SABC), the Department of Arts and Culture (DAC) and others. A ‘people’s bus’ was used as a means of publicity. IMC saw itself as a brand custodian and would assist Government, business and civic society partners to take the name of South Africa out to the world. In such a situation there were a number of stakeholders. These included the international community, which influenced the image that South Africa portrayed, and the South African citizens at home and abroad who were South Africa’s ambassadors. Additional stakeholders included the media and State-owned enterprises (SOEs), and the continent of Africa. The world experienced South Africa in different forms, but IMC sought to promote South Africa under one brand and make full use of synergies.

The current strategic plan differed from that of 2009-2012, firstly in the addition of an extra objective around business sustainability; secondly, in the addition of 3 new performance measures around stakeholder satisfaction, corporate reputation, and business sustainability; and thirdly, with the additional new strategy around prudent financial management and control.

IMC’s annual budget was reduced by 21% from between 2010 and 2012, because the additional allocations received in 2010-2011 for the FIFA World Cup were for that year alone. From 2011 to 2013 the annual budget increase would be 6%, which was again in line with normal inflationary increases.

Ms Soni said that, on the basis of inputs given by the IMC key stakeholders, the core target markets for South Africa included those participating in the 2010 FIFA World Cup and those in which 2010 FIFA Roadshows were taking place, which she listed (see attached presentation). Other targets included countries of importance to key stakeholders for their markets, trade, investment, and tourism potential, and of diplomatic importance.

Ms Soni gave an explanation of performance measures. Media Tenor’s Global Reputation Score represented an in-depth analysis of media coverage in 42 countries, over 200 print and broadcast media, and their reporting on South Africa. Every report with significant relevance to South Africa was assessed.  The challenge was that a country’s perception depended on the volume of coverage it received. This could change over time, as issues and positions shifted.

The Anholt-GfK Roper Nation Brands Index measured the power and quality of each country's 'brand image' by gauging the perceptions of citizens in developed and developing countries that played important and diverse roles in shaping global foreign policy, as well as the flow of business, cultural, and tourism activities around the world. Interviews were conducted among citizens of 20 countries around the world. In each survey country, about 1 000 online interviews were conducted with people aged over eighteen.

The Global Competitiveness Report’s competitiveness ranking was based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI provided a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development.

The IMC sought to be a cutting edge organisation and was currently investigating an appropriate measure to determine its success as an organisation against other similar organisations. It was working with Anholt GfK Roper to develop a Corporate Reputation Scorecard. This would give a current assessment of the IMC’s reputation against its competition, would assess how its reputation and weaknesses compared with leading organisations globally, and would establish consistent measurement across constituencies based on key drivers of reputation. This would allow for market-based guidance for communications planning to set goals, identify and prioritise targets, formulate messages to influence positive outcomes; and benchmarks against which progress could be measured over time

Discussion
Rev K Zondi (IFP) asked about the World Economic Forum, Davos conference, the recent state visit of the President to the United Kingdom and his portrayal by the tabloid newspapers of that country, and the national football team Bafana Bafana.

Ms Margaret Dingalo, Stakeholder Relations Director, IMC, replied that the issue of media was a complicated one. It was necessary to respond strategically to negative publicity. IMC carried a message from different constituencies. IMC chose not to respond to negative issues in London. At the Davos conference, IMC had remained focused, and had held structured engagements, and by the end of that conference, South Africa was one of the most reported countries and the profile of the President was elevated.

Mr Happy Ntshingila, Board Member, IMC, assured the Committee that on 11 June 2010 Bafana Bafana would go onto the pitch and play well. Sponsors had done as much as they could for the team. As marketing director of Absa, he was aware of their efforts. IMC’s strategy was to ensure that the team received as much support as possible. He welcomed the team’s opportunity to train in Brazil so that, for a time, its members would be relieved of the pressure of the country’s expectations. The team needed the commitment of its supporters and, with such support, he was sure that the team would return from Brazil revitalised. It was important to stand behind them.

Ms W Newhoudt Druchen (ANC) noted that IMC had a new website, www.brandsouthafrica.com, and suggested that IMC be represented on www.facebook.com, as a medium of publicity, to enable people to visit and comment, and for IMC to respond. 

Mr S Kholwane (ANC) asked about IMC’s intelligence gathering and questioned the sufficiency of IMC’s budget for the 2010 campaign. He remarked that the bus that IMC had shown in one of its slides as a means of publicity was ugly. Visitors would not want to board it. 

Ms Soni acknowledged the need for more funding but stressed its emphasis on partnership with the private sector. IMC was only able to sow the seed and initiate certain projects. IMC used leverage as much as it could.

The Chairperson reminded Ms Soni that only the intelligence services were mandated to obtain “intelligence” in the accepted sense of the word. He suggested substituting the word “information” to avoid possible contention and suspicion by foreign intelligence agencies that IMC was a front for South Africa’s intelligence services.

Ms Soni accepted the Chairperson’s observation, but said that what IMC had in mind was essentially knowledge management.

Ms L Mazibuko (DA) was pleased that IMC had managed to achieve a shift in media focus. It was not a question of being fallacious; it was about telling the truth. She congratulated IMC on its corporate idea, which she felt was the right message to project to the world.  She also commended IMC’s interaction with the provinces. She asked about IMC’s ideal of homogenisation. She observed that the citizens of South Africa were the ambassadors of ‘brand South Africa’, while the media took a secondary role by reporting what the citizens said..

Ms Mazibuko said she would be interested in seeing an analysis of the budget.

A representative from IMC responded briefly how budget allocations worked.

Ms Mazibuko asked if the inward process of selling South Africa to South Africans could be considered under stakeholder alignment, and if there was any possibility of increasing stakeholder involvement from 22%. IMC’s most important asset was not the Government, but the people whom that Government governed.

A Member asked about the role of provincial organisations and if IMC’s focus was mainly on the urban areas.

Mr Ntshingila replied that if IMC succeeded in selling South Africa first, then everyone, including the sub-brands, would benefit. IMC had a programme to engage the sub-brand stakeholders.

Mr Chichi Maponya, Board Member, IMC, said that IMC had held its first provincial meeting the previous day to discuss taking the mandate to the provinces. IMC would engage with premiers. IMC was collaborating with the Department of Cooperative Governance and Traditional Affairs in a campaign to ‘fly the flag’. The bus would travel to all the provinces. One of the reasons for the bus was to make contact with the rural areas and make them feel involved. Schools would be visited and involved in the “fly-the-flag” campaign. 

Mr J de Lange (ANC) noticed that a large amount of funding was allocated to staff costs.

Mr Paul MacKenzie, Chief Operations Officer, IMC, responded that the figure of R21 million for staffing represented 13% of the total costs.

Mr De Lange asked how IMC worked with other departments and entities to maintain South Africa’s image, for example to ensure that visitors were satisfied with their accommodation.  It was important for IMC that there was a certain level of patriotism.

Ms Soni said that IMC sought to assure quality of delivery of its services, to which end media round tables and working in partnership with implementers would be used. She agreed that such forums were absolutely necessary. She said that if South Africa did not provide value for money, it would not reap the benefits of international exposure. All governmental departments involved had programmes geared to service delivery. Quality products were monitored and were awarded star grading. IMC collaborated with such departments and other implementers.

Ms Masipa spoke about an idea borrowed from SA Tourism for a dance; however, she did not know the dance’s origin.

The Chairperson commented that there was now a new core message for Africa.

Media Development and Diversity Agency (MDDA):Strategic Plan and Budget 2010-2013  Briefing
Ms Gugu Msibi, Chairperson, Media Development Agency, noted that the Media Development and Diversity Agency (MDDA) was a statutory development agency for promoting and ensuring media development and diversity. It was established as a partnership between the South African Government and major print and broadcasting companies to assist in developing community and small commercial media in South Africa, in terms of the MDDA Act 14 of 2002.

The Strategic and Business Plan for 2010-2013 outlined the path paved by the MDDA in order to pursue its mandate and empower all South Africans with access to information and means of communications, which would in turn defend, protect and deepen the democracy. The MDDA had renewed funding agreements with print media for another five years and broadcasting service licensees were aligned to the Independent Communications Authority of South Africa (ICASA) Regulations.

The MDDA had provided grant funding and subsidies to projects since 2004. These projects included media projects and the promotion of media development and diversity. MDDA leveraged resources and support through technical assistance, conducted and funded research, facilitated capacity building, and advocated for media diversity. The MDDA operated within a broad legislative framework, which she outlined (see attached presentation for details). MDDA  worked primarily with historically disadvantaged persons and communities. Its priority would continue to be to increase its focus on rural and poor communities as well as historically diminished language and cultural groups and inadequately served communities. It would therefore continue to increase work in provinces outside Gauteng and the Western Cape. The MDDA would continue to focus on ensuring that all citizens could access information in a language of their choice. It would contribute to the transformation of media access, ownership and control patterns in South Africa.

Since its formation, the MDDA had achieved some major milestones including awarding grants of R102 million to over 278 projects. Over 600 people were trained. MDDA provided more than 100 bursaries to different radio and print media. It had received unqualified audits since its establishment.

The major challenges faced by the MDDA included its limited funding that did not meet the demands for assistance from the community. There was also declining funding for print media. The regulatory framework that governed the MDDA was awkward, because regulations required tax certificates and audited financial statements from groups who were still in their formative stages. There was a generally disempowering environment in print media. There was lack of skills amongst the socio-economic groups targeted by the MDDA. The limited broadcast frequency spectrum; and the limited exposure of the small commercial and community media to advertising revenues and marketing skills were further challenges.

The purpose of MDDA’s programmes in this period was to strengthen the sector though providing resources, knowledge and skills, in pursuit of promoting media development and diversity. In this context, the MDDA would focus its work on advocacy for media development and diversity, partnerships and stakeholder management, grants and seed funding support for community and small commercial media. Capacity-building interventions for beneficiary organisations and communities would include mentorship, monitoring and evaluation. It would focus on strengthening and consolidating beneficiary projects towards sustainability; research and knowledge management, encourage media literacy, a culture of reading, communications and public awareness with regard to the sector and the MDDA in general. It would attempt to ensure quality programming and production in community broadcasting. It would also attend to fundraising and resource mobilisation. Monitoring and evaluation would play a key role in structuring future programme involvement, design and development.

From October 2008, the MDDA had a full complement of staff in the Monitoring and Evaluation division, with one member resigning in mid-2009. The team had since made strides in making sure that MDDA funded projects reported on deadline and also complied with the specifications according to signed contracts.

Mr Lumko Mtimde, Chief Executive Officer, MDDA, presented the strategic focus and rationale for 2010-2013. This was predicated on the fact that historically disadvantaged communities continued to be deprived of access to information that could assist them to participate actively in socio-economic improvement and democratic processes of the country. The current media was still insufficiently diverse, and did not fully reflect the concerns of socio-economically marginalised communities. Approximately 80% of the South African population was African, yet a huge number of indigenous language media products were written and produced in English. This was in direct contradiction to the notion of recognising all languages on an equal basis as prescribed by the Constitution. The MDDA had been in partnership with the now-named Department of Cooperative Governance and Traditional Affairs (COGTA) in an effort to promote multilingualism in local government.

Mr Mtimde said that MDDA wanted to see at least one community radio station and one community television station in every province, and was concerned that community newspapers were not at the level of community radio.  MDDA wanted to ensure sustainability of these projects, and supported them in multiyear cycles. MDDA supported a summit on media literacy and the promotion of reading. This was intended to target schoolchildren. He noted the significance of on-line reading and reading from mobile phones. However, printed material was one of MDDA’s flagship programmes. Although MDDA had acquired new benefactors, the funding had decreased.

Mr Mtimde highlighted two main risks and constraints that could limit the impact and work of the MDDA in this period. These were the sustainability of funded projects; and lack of adequate funds for the print media mandate. MDDA had tried to mitigate its risks by adopting an integrated developmental approach, leading to improved socio-economic conditions of the targeted communities, and through continuous engagement with the print media sector. It was seeking increased governmental funding. Other risks were cited as the possibly inflexible legislative and regulatory framework. Although the possibility of misuse of funds by the beneficiaries had been minimised since the appointment of an Internal Audit and Risk Manager, as well as the setting up the Monitoring and Evaluation Unit, it still must be considered as a risk.

MDDA had increased its staff complement, and Mr Mtimde tabled an organogram of required organisational capacity for 2010 to 2013. Expanding activities would require an expansion of the staff complement. This would become more clear when the financial impact of the Electronic Communications Act on the MDDA was more fully known. Regulations were set by ICASA on the contributions of the broadcasting service licensees on 10 October 2008. The MDDA had managed to get most broadcast service licensees to sign the new agreement committing to contribute 0.2% of their annual turnover of licensed activities.

Mr Mshiyeni Gungqisa, Chief Financial Officer, MDDA, summarised the budget, which was based on the human resources requirements in the organogram. The budget complied with the regulatory limit of 25% for administration.  Saving and cost-cutting measures were to be instituted in respect of consultancy expenses, unfunded positions, greater use of electronic business cards, the improved efficiency of the grant funding cycle, project management and project tracking system, and travel by economy class for the Board and Chief Executive Officer.

In summary, Ms Msibi said that MDDA hoped to ensure diversity of media in every municipal district, increased media in different indigenous languages to reflect unity in diversity, and empowerment of rural communities, with job creation, poverty alleviation, and informed societies.

Discussion
Rev Zondi appreciated the MDDA’s work. He asked about its austerity measures, the contributions of partnerships, and print media. He said that there was a need to penetrate rural areas, in which vernacular newspapers could be a means of empowerment. He mentioned complaints in his constituency of lack of resources for a school for handicapped children. He asked how large a percentage of the projected budget was from the fiscus.

Mr Kholwane asked to what extent MDDA engaged with the Government in placing advertisements in local print media. Such advertising would help local newspapers to survive. He asked about promoting indigenous languages, said that he was passionate about MDDA, and that funding needed to be reviewed.

Ms Newhoudt Druchen asked about MDDA’s total expenditure for 2009-2010.

Mr Mtimde responded that the financial year was not yet complete.

Ms Newhoudt Druchen asked to what extent MDDA was involved in electronic media, and how this would happen. She noted the youth’s preference for such media as mobile phones and information and communication technology (ICT).

Mr Mtimde responded that MDDA supported such a project in Mitchell’s Plain.

Ms Newhoudt Druchen asked to what extent MDDA encouraged all official 11 languages and sign language, noting that recently the Minister of Communications had issued a statement on community television stations, in which there should be broadcasts in all official languages and in sign language.

Ms Newhoudt Druchen asked about MDDA’s encouragement of literacy, and asked if it had considered the need to show news for children that excluded the more sensational and violent aspects of the mainstream news media.

Ms Newhoudt Druchen asked what MDDA could do to encourage young children to read.

Mr Mtimde responded that MDDA had, in the previous year, launched a media summit in the Eastern Cape. This had exposed children in the Province to how the media conducted its work. MDDA was aware of children’s own dissatisfaction with the media as it existed and operated, and their perceived exclusion from the media. MDDA had funded two projects to create content for children.

The Chairperson asked what MDDA would do with additional funding from the State.

Mr Mtimde said that MDDA had signed a memorandum of understanding with the Department of Communications, but perhaps had not quite lived up to the expectations. MDDA’s principal governmental support was from the Presidency, and constituted 52% of MDDA’s budget, which was the only source of support which increased regularly. Print media had not increased its funding. However, funding from broadcast licensees was increasing. MDDA’s 272 projects were spread throughout all provinces, but faced especial challenges in Free State, Northern Cape, and North West; , where it was seeking more projects. He added that print media had been challenged by ‘the onslaught of digital’ media and thus funding from this source had been reduced. However, MDDA recognised the continuing importance of print.

The Chairperson asked what if MDDA was really an effective lobby. He asked where MDDA’s voice was as it had produced only one statement per year. He did not sense any activism on MDDA’s part. He asked if MDDA was repositioning itself or letting itself die a natural death.

Ms Msibi replied that MDDA was involved in many discussions, but could not afford to use “all the bells and whistles” since it simply could not afford them. Almost all Board members were in the private sector. She affirmed that MDDA had a vital role and would not give up its efforts, despite its financial inability to fill its vacant posts.

Mr Mtimde denied the Chairperson’s allegations that MDDA was complacent. It maintained a press office, and had made submissions to ICASA. There had been a big debate about ownership of media in South Africa, and MDDA had sent copies of documents to Members. MDDA had received some negative coverage. He admitted that it could perhaps do more. It strove for transformation in the media in line with its mandate.

Mr Mtimde expanded on his earlier remarks, by stating that MDDA did engage with other governmental departments. It had established a good relationship with COGTA, and had a public sector strategy with a view to increasing its use of print media. MDDA welcomed the increased funding from the broadcast sector and expressed its thanks to those concerned.

Ms Msibi said that the Committee could demonstrate its commitment to MDDA by small gestures like allowing it to present first for a change. She thought that IMC could have learned from MDDA’s presentation.

The Chairperson conceded MDDA’s point.

The meeting was adjourned.