Jawbone: Riding the Waves Towards a New, Digital Future

The cut off your nose to spite your face scenario plays out in marketing departments all too often.  

Times are tough and marketing is quickly chopped. The one part of business strategy that is outwardly focussed on bringing in and maintaining business – driving revenue and building strength – is always the first to be cut.  

According to Harvard Business Review, this process is ‘today’s equivalent of bleeding – an old-fashioned but once widespread treatment that actually reduces the patient’s ability to fight disease’.  

Unfortunately, marketing is usually slashed because it is effortless – easier than redundancies or downscaling premises.  

During the Covid-19 pandemic, many of the large agencies around the world have reported major stress on marketing and advertising budgets, with big-brand budgets under pressure, and knowledge around the future guesswork at best.   

But research strongly suggests companies that maintain, or increase, marketing activity during recessionary periods are the those that bounce back strongly.   

In South Africa, the industry has suffered a major downturn in spending. Industry resource MarkLives.com conducted a survey finding 84% of respondents in agreeance that the pandemic is an incredibly serious problem. Almost half of those surveyed believed the pandemic’s impact would last longer than six months, 68% predicted a decrease in spend on events, promotions or activations, while 46% predicted decreased spend on out-of-home (OOH) advertising; 36% predicted declines in print spend and 25% saw decreases on sponsorships. Importantly, almost 70% of the industry reported that their company income would decrease substantially or slightly as a result.  

ROGUE WAVE 

Sven Reinertsen CEO of Jawbone lives by the coast in KZN, and his business has felt the crashing power of the pandemic, like a wave of negativity washing over a very successful business. As one of South Africa’s leading brand activation and experiential marketing companies, Jawbone’s clients were impacted in a major way. As expected, marketing budgets were torn up and the gathering of people was outlawed – the race was on to re-strategize to stay afloat.  

“I use the rugby analogy; it’s the Springboks against the All Blacks,” he begins. “We were 45-3 down at half-time and the odds of making the comeback were very slim. But we had to stay in the game. Get to extra time, score points, don’t concede. We had to take some risks, make some bold calls and change our strategy to make positive steps forward, with a focus on attack instead of defence. Right now, we’re not winning, but we are creating space and opportunities that are changing the game. It’s more like 49-43 and we are still in the game with the clock still ticking. We are one converted try away from taking the lead, and as a winning team we know how to stay ahead and close out a game.” 

When South Africa deployed one of the world’s strictest lockdowns in March 2020, the type of event utilised by Jawbone to advertise its’ client’s offerings were immediately halted. Even large-name businesses were ruthless in the way they cancelled events.  

One of the country’s largest retailers contracted Jawbone to deliver a stand-out year-end function. With glitz, glam and celebration on the brief, Jawbone planned an energizing gig with a large stage to be claimed by a high-profile rock band. Just one week before the event, Reinertsen received a Covid-forced cancellation call as the retailer prioritised the safety of its employees.   

At this point, many in the industry were starting to see a similar pattern. 

“The second wave was incoming,” remembers Reinertsen. “Where a lot of the industry thought that December would realise an uptick, things were still being cancelled, suppliers were committed to big events, and people were losing money as things got worse. It was a hammer blow for the industry in South Africa. 

“We were forced to shift and downsize. I think it’s for the better as Jawbone will be stronger down the line. We have a pipeline and we have clients that we are speaking to. I am now talking to people about how we have changed to be more relevant and we are discussing our growth and survival strategy as one.”  

To future proof the business, Jawbone is moving further into the digital arena – a space where it has experience but has never fixated.  

Unfortunately, with just over one million people receiving their vaccination in South Africa, the country remains in deep water, recoding more than 5000 new cases of Covid-19 every day consistently in the first half June. Many now fear a climb back up the Alert Level lockdown scale.  

“There is still the third wave that most are worried about. I wish we had a crystal ball,” admits Reinertsen. “It looks like some things may happen but for most events, it doesn’t look good. When things turn back on, we will be able to sell Jawbone’s historic services. We have not completely pivoted, but we need to be relevant. We have to be able to service people’s needs on other platforms and in other ways. There will be a space for experiential marketing down the line but it will be more technology based.”   

UNION BLACK  

At the start of the pandemic, as the impact on events and experiential gatherings became clear, Jawbone transitioned quickly, demonstrating the beauty of a small business decision making speed.  

Reinertsen ‘cut fast and deep’ and chose a lean strategy. Establishing Union Black as a full-service digital marketing agency, with a user-centric and data-influenced approach. The new entity quickly went about delivering a portfolio of measurable services as a standalone agency while working in partnership with Jawbone, to drive results for brands.  

“I realised that Jawbone’s future would be heavily reliant on a digital offering and we needed to merge the online and the offline. Activations and experiences are no longer going to be just physical alone; there will be a digital element to it. So, it was either outsource and lose control and the ability to execute at a high level and high speed, or set up a digital agency. Union Black is a one-year-old business bursting with creativity and digital solutions, with its own clients, working closely with Jawbone,” explains Reinertsen.  

In 2020, Union Black and Jawbone launched the Chinese cell phone brand, TECNO SPAR 5, in South Africa. Part of TRANSSION Holdings (world’s fourth largest cell phone group), TECNO and iTel are making waves in the mid to lower tier smart phone industry in developing markets and, as a result, there are more TRANSSION devices in Africa than any other brand. 

“They have done very well globally,” says Reinertsen. “It was a game changing client. We managed to launch one of their devices last year and we have another three secured for this year, with exciting growth prospects for the future. 

“It has helped us play with a global brand, and it has helped us transition into that digital space which includes work with influencers, as well as a range of other digital methods. It’s strategy all the way through to execution.”  

This blend of physical services through Jawbone and digital offerings from Union Black have helped both companies to pick up new business, making the most of existing relationships, while others waited to see if and how the tender market would return.  

Jawbone and Union Black have collaborated on a research piece for Chester Butcheries, conducting an online audit, physical instore questionnaires as well as geo-tracking to analyse the movement of people and vehicles. “As a result of transforming data into insights and validating the various layers of data, we have found a range of solutions that can be implemented tomorrow to high-level brand strategy,” says Reinertsen 

Jawbone is still active in the shop fitting space, working with a large retail chain, by designing and installing instore concepts for cell phones and new concepts to accelerate the launch of new devices. By adding Union Black to the mix, the 360-service portfolio is complete.  

“Cell phones continue to take off in South Africa where there are more cell phones that working toilets – smartphones are the future here. I have been working in this industry for the last 14 years and some of the brands we are launching are now moving into those stores. We are also looking at self-help style kiosks in stores as the future of retail needs to become more digital as humans are replaced by technology in a natural progression,” details Reinertsen.  

“A big part of it is research,” he adds. “We’ve realised that a lot of people will claim to do things but they don’t truly understand what they are doing. We have a full-time researcher at Union Black who has a lot of tools and technology to pull data and intelligence which helps build a profile and design the user experience. At Jawbone previously, we were selling the services that we could deliver. Now, I am going to clients and asking what their needs are and what problems we can solve for them. We can either deliver ourselves or we will collaborate with our rockstar partners and project manage.”  

This allows for the retention of a certain level of control over a project, and a direct communication line with the client. In the past, the outsourcing method employed by the big agencies has left different arms of the project feeling unconnected to the body, and ultimately the vision of the brand.  

“We had a seat at the table but we were often told what to do,” remembers Reinertsen. “Now, we realise that we must be at the table from the start and have a voice strategically so we understand what the brand is trying to achieve. 

“The lockdown has forced our hand. I realised if you’re not playing at the strategic level, you’re not really in the game. We would have to wait for someone else to win the work and wait for them to outsource the work to us. We are now involved from the start and we can do things better and more cost-effectively than most.” 

CHANGING TIDE  

Combine consistently unpredictable economic performance in South Africa pre-Covid, with the lockdowns and delays during the pandemic, and you find a very different market in the post-Covid era. Where every Rand was under the microscope before, every Cent is now forensically examined, with return on investment (ROI) being the singular demand.   

“The industry has been shifting for a while,” admits Reinertsen. “We were claiming to be able to measure better than others but it was still hard to measure the physical return accurately. With digital, you know exactly who your consumer is and how they fit into your target market. That is where the game has changed with influencers and targeted social media. It was a natural progression from the activations space – there was always going to have to be a digital element to it because of its effectiveness, measurability and cost.  

“If you’re not digital and you can’t quantify where every single Cent is spent, then you don’t really have a place in the market because everyone needs bang for their buck and everyone is under pressure. There will always still be a place for physical activations but at this stage we can’t plan for an industry that comes with new rules that we don’t know enough about.”  

The comprehensive experience across all market sectors was demonstrated recently in Johannesburg when Jawbone and Union Black masterminded the FNB Jo’burg Art Fair. Typically an event attended in big numbers by members of the global art community – an opportunity to view and buy unique African pieces – Covid denied the 2020 crowds the opportunity. Union Black stepped in and moved the entire event online, much to the delight of FNB and buyers and sellers involved.  

“They had confirmation of an art fair that couldn’t take place so we had to build the strategy and build the platform. We were quoting against other people and we offered better service and a better solution. It was the biggest Teams call I’ve ever been on in my life,” Reinertsen smiles. “They wanted to make sure everything was covered and we wanted to impress them. We hope to do the same again this year.  

“We uploaded all the art and we had interaction from 71 countries around the world. We are connecting African art with the world. We had buyers from the US who could see the art on their mobile device or computer, and we also had a virtual function where you could place the art on the wall in your room to see what it would look like. It was a success as we were able to connect people that would previously have never connected with one another.  

“Often, as a small agency, you need someone to give you a chance. It paid off for them and having FNB as a client is a pretty good thing for us,” he adds.  

ROUNDHOUSE CUTBACK 

While Jawbone has navigated its way through the Covid crisis and the reductions in marketing spend, the company has also been reeling after its separation from the Iconic Collective. Back in March 2020, Reinertsen told Enterprise Africa about merging his company into the Iconic Collective – a new type of agency, made up of eight of the country’s best creative businesses.  

After only a short time working together, as a combination of various culture clashes as well as the shock to the market from Covid-19, Jawbone and the Iconic Collective parted ways.  

“It was essentially eight businesses thrown together. There was definitely a need for a new style of agency as the old model was and is broken. You get charged too much and you often do not get what you’ve paid for. The thought behind it and the strategy was good. There were synergies and fantastic ideas, but it perhaps happened faster than it should of. I couldn’t risk my future and the future of the business so I left on amicable terms with the plans to continue working together. Then lockdown hit.”  

Officially becoming part of the group on 5 December 2019, the relationship was short-lived. Sven Reinertsen moved Jawbone out of the Sandton office and reduced numbers in the company while moving to a project management model and establishing Union Black.     

“There was a lot of work lined up, but the lockdowns around the world caused many contracts to be pulled. I was in Dubai with the group in January and we were already seeing projects delayed or cancelled,” he says.  

“The journey did not end – and I thought it might – but the plot thickens. It’s looking better than it was 12-months ago, put it that way.  

Now working out of KZN, Reinertsen’s commitment to Jawbone sees the company maintaining its country-wide operating status, with a strong future lined up. His own schedule has changed, no longer flying into Johannesburg several times each week, allowing for closer links with external partners. This new project management focus has allowed for a continuation of the high-quality on which the Jawbone brand is built.  

“A lot of agencies with massive overheads have either closed down, downsized, or sold out. A lot of what they were doing was outsourced anyway. We are project management and execution specialists and we can still roll out globally. Today, my team was installing two cell phone units, and another four tomorrow. I am in KZN, the units are manufactured in Johannesburg, and the installation is around the country. That outsourced model is something that we are used to and we have been doing it for the last two years.  

“We had to go lean, but we have a pipeline for six months which is better than most in the industry,” he says.  

Post-Covid, brands are still developing ideas. Local and international companies are still looking to break into the South African market, be it for the first time, or with a new product. Now, Jawbone competes digitally, with brand activations, experiential marketing, and in events. As others have fallen away, victims of the ‘too big to shift’ scenario, opportunities remain for those that truly understand clients needs.   

“I am optimistic,” smiles Reinertsen. “Those that can stay alive for the next six months, when things do turn back on, there will be a definite need for their services. We have made it this far and making it over the past 12 months has been the make or break, and there’s not too many people left standing. I’ve had my doubts, and I had people close to me telling me to throw in the towel. Had I listened to them, I’d be in a world of pain.”  

Much like Durban’s surfers, Jawbone is comfortable in calm waters as well as in the big swells. 2020 certainly felt more like a thunderstorm and while some found themselves caught crumbling in the rip tide, Reinertsen, Jawbone and Union Black have grasped the opportunities and are now riding the waves. This is a business with more than a decade of experience working alongside world-renowned brands and a new chapter is just beginning.