A framework for the sustainability of advertising agencies in an emerging economy: the case of South Africa

Abstract

Digital evolution has disrupted advertising globally, and the outdated business models used by South African advertising agencies are pushing their customers towards their competitors in the digital space. The objective of the study was to provide a framework of Critical Success Factors (CSF) for marketing decision-makers operating in the digital era by investigating the extent and implications of this digital disruption. Triangulation through a mixed-methods approach with the sequential exploratory design was employed. In the qualitative phase, the impact of digital disruption on South African advertising agencies (AA) was explored through interviews. The findings were used to develop a questionnaire for the quantitative phase, in which exploratory factor analysis was employed. As a result, six factors significant for the operations of advertising agencies in the digital age were identified. These are (i) characteristics of modern marketing; (ii) agency sustainability in the digital age; (iii) characteristics of effective advertising in the digital age; (iv) critical skills for advertising agencies to succeed in the digital age; (v) digital capabilities for agencies’ success in the digital age; (vi) agency structure and process considerations for the digital age. The resulting CSF Framework provides the marketing decision-makers with a broader perspective on their strongly digitalised business environment and permits a smoother transition of AA towards a new sustainable business model.

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