MTN GIBS Programme

1. MTN GIBS Programme futurefact 2 0 1 3 futurefact

2. Agenda • Future proofing SAARF initiative. • Some key drivers of South African society relevant to MTN’s marketing endeavours.

3. future proofing SAARF project

4. Future Proofing SAARF Project: Background • Rapid developments in the media landscape. • Raise the question re what research adaptations and changes necessary to meet the evolving media measurement imperatives. • The SAARF Board’s Future Proofing Committee selected Kuper Research to head a task team for an in-depth evaluation of the current SAARF suite of products and an exploration of how to future proof the industry’s research instruments – to meet the imperatives of a changing marketing and media landscape.

5. Future Proofing SAARF Project: Current products • AMPS (face to face and some self completion): Print media consumption, usage of internet and cellular devices and activities, outdoor media noting, broad radio and TV consumption, brands, products, retailers, financial services, lifestyles, activities, demographic information and more. (2 per annum, rolling sample over 12 months) • RAMS ( 7 day diaries): Radio Audience Measurement Survey which measures radio consumption by ¼ hour listening patterns (6 per annum, rolling cycle over 2 dairies) • TAMS (electronic meters): TV Audience Measurement Survey which measures TV consumption based on the actual viewing of a selected panel of consumers (daily). • OHMS (on hold, patents issue): Out of Home Measurement Survey which measures billboards and other relevant outdoor media. • Note: The Digital Media have their own online survey, Effective Measures, managed by the digital media association.

6. Future Proofing SAARF Project: Constituency representation • All constituencies with an interest in consumer and audience research have representation on the Future Proofing Committee to ensure that all views are taken into consideration. • Constituencies include: • MA(SA) Marketing South Africa • AMF Advertising Media Forum • ACA Association of Communication Agencies • DMMA Digital Media and Marketing Association • NAB National Association of Broadcasters • PDMSA Print and Digital Media South Africa • OHMSA Out of Home Media South Africa

7. Some key drivers of South African society Relevant to……

8. Sources for today’s programme The2011/12 AMPS survey: • Period: July 2011 – June 2012 • Sample: 25,162 adults aged 15 plus; national coverage • Represents 34.9 million adults The 2012 futurefact survey: • Fieldwork period: February-April 2012 • Sample: 2,946 adults aged 15 plus • National probability sample excluding deep rural (communities of fewer than 500 people) • Represents 21.6 million people (weighted to the latest population parameters adopted by AMPS). • Note: 2013 survey currently being planned for fieldwork to start in May.

9. What is futurefact? • South Africa is a rapidly changing society and futurefact is considered by many to be South Africa’s premier psychographic survey. • The survey has been monitoring the significant psycho-social, socio-political and socio-economic forces shaping the country since 1998. • Since people’s attitudes precede their behaviour, having an in-depth understanding of the attitudes, values and belief systems of South Africans on wide ranging current issues is critical for a variety of businesses and organisations.  • This is where futurefact comes into its own — providing the facts and substance which enable organisations to make key strategic interventions for building a sustainable future.  • It is funded by subscriptions to the survey.

10. Some futurefact topics • Class mobility • social cohesion and social dissent, • financial services and literacy, • social capital and educational issues and skills, • political beliefs, transformational issuesand unions, corruption and crime • service delivery, accountabilityconcerns, • trust in organisations, institutions and leaders, • digital and mobile capabilities, • confidence in the countryand mindsets, • brand consciousness, • an extensive media section. • Each year these adapt a to the current pulse of the nation. • Questionnaire content debated at a subscribers' workshop and sourced from global and local opinion leaders.   • Certain questions relevant to the dynamics of the market are tracked.

11. Population changes AMPS, futurefact and BMR projections

12. 2005 LSMs according to AMPS Source: AMPS

13. BMR projections to 2015 based on 2005 LSMs Source: BMR and AMPS

14. The upward lsmmovement is happening far faster than projected. No wonder class mobility exists in this country! Source: BMR and AMPS

16. Why measure social class? • Class is essentially a self classification, based on people’s perceptions of the class they themselves fall into (the options are: lower/working class; middle class; upper middle class; upper class). • We measure inter-generational class mobility by asking about the class their parents fell into when they were the same age. • Class mobile people do not see themselves as static but as ‘moving up the ladder’ and their lifestyles and behaviour will mirror their aspirations. • Class and class mobility are often more diagnostic measures than many of the traditional demographics because it looks into our mindsets now and into the future. “What I believe is what I’ll be”

17. Class Mobility in SA • Why do we need class mobility when we have LSMs (Living Standard Measures)? • LSMs classify people into groups and market to them in terms of where they are now. A STATIC MEASURE! • Whereas Class Mobiity is an important tool for self projection. • WHAT I BELIEVE IS WHAT I’LL BE.

18. Considerable inter-generational mobility: Own class versus parents’ at the same age Source: futurefact 2012

19. Inter-generational mobility by race Source: futurefact 2012

20. Changes in self perceived class over time Pre recession we had a bulging middle class that then diminished in 2011 – those who had over committed saw themselves as back in the working class, but there were also some who managed to move up the class ladder. The middle class in 2012 is back on a growth phase. Source: futurefact

21. The value of brands to the different classesBase: Total market Source: futurefact 2012

22. The value of brands to the different classesBase: MTN main cell phone provider Source: futurefact 2012

23. Our Digital World

24. Access to the Internet 2009 23% 6.6m people Via cellphone 74% Via computer 46% Source: futurefact 2012

25. Trends in access to the Internet: Class Source: futurefact

26. Increase in cell phone ownership over 5 years: 2007 to 2012 Cell ownership 2012 Working Class + 35% Middle Class +20% Total Population +24% 6.1m *17.7m 7.9m 2.7m Upper Middle/ Upper class +8% *AMPS 18.4m Source: futurefact

27. Internet access The working class number almost matches the top class number. Cell 77% PC 58% Cell 73% PC 47% Cell 75% PC 46% Cell 78% PC 31% 3.3m 6.56m 1.53m 1.49m Source: futurefact 2012

28. Internet engagementBase: Access to internet via a cellphone % (50) (41) (all with internet access) Source: futurefact 2012

29. Degree of engagement with internet by classBase: Access to internet Source: futurefact 2012

30. Use a smartphoneby classBase: Cell phone owners The working class number actually exceeds the top class number. Source: futurefact 2012

31. Use a smartphone by service providerBase: Cell phone owners Source: futurefact 2012

32. Degree of engagement with cell phonesBase: Cell phone owners Source: futurefact 2012

33. Degree of engagement with cell phones by service providerBase: Cell phone owners Source: futurefact 2012

34. Market segment cluster analysis

35. Cluster analysis • A cluster analysis was undertaken as part of the strategic interrogation to enable an in-depth understanding of the significant headspaces of South Africans in our evolving social fabric. • These could have impact on attitudes to insurance and credit products and potentially have value for marketing and communication initiatives. • Two strong clusters emerged, the Traditional and the Cosmopolitan, which have value in understanding how the South African market is evolving in psycho-social and socio-economic terms. • The clusters could well contribute to product development and sales, marketing and advertising strategies, depending on the objectives of each company going forward.

36. Cluster analysis methodology • A range of statements from futurefact 2012 was selected on the basis of the kinds of issues that could contribute to a forward thinking and modern perspective on lives, lifestyles and issues. • Similarly, a range of statements was selected on the basis of the kinds of mindsets that could be assumed to have not embraced modernity as yet, either because of more culturally determined factors or else through current circumstances and perhaps a lack of opportunities. • Several other dimensions were also added to the pot of statements initially, before we had an idea that only two strong differentiating clusters would emerge. • All the statements that were shown to discriminate between these two strong clusters which we subsequently labelled Cosmos and Tradsare described on the next slides.

37. Discriminating statements for Cosmos • Adults should be allowed to have homosexual, gay or lesbian relationships. • Women should be allowed to have legal abortions if they decide to. • I’m the sort of person who loves new technology and make sure that that I keep up to date with developments • Any telecomm devices in home (excluding landline and cell). • At least 8 of the 9 possible life skills. • Have a cell phone contract (as opposed to prepaid). Have a smartphone/android. • I am always on diet or trying different dieting methods. • I am willing to pay a bit more tax so that everyone has access to good medical treatment • I exercise regularly e.g. gym, dance, fitness class, aerobics, yoga, etc. • I find it very exciting to be living in a time of so much change. • I have friends from other racial groups. • I often by health foods and vitamins. • More sophisticated banking activities (car finance, life insurance and investments). • African languages are unlikely to be the language of one’s innermost thoughts. • S.A. is more like America or Europe than Africa. • Middle class and above. • A contract with a private security company for the household. • Access to the internet. • Any HD ready or HD TV. • Considering leaving SA to live or work in another country. • Gone on holiday in S.A.

38. Discriminating statements for Trads • Prefer reading newspapers in an African language. • Prefer African language radio stations and TV. • Basic use of cell phone functions only (voice call, receive calls, sms, please call me’s). • Not likely to have a smartphone/android. • In this household we often go to bed feeling hungry. • Don’t live in a township by choice, rather necessity. • Engaged with neighbours socially and visit each others’ homes. • Working or lower class. • They do not believe that adults should be allowed to have homosexual, gay or lesbian relationships or that women should be allowed to have legal abortions if they decide to. • They are not technologically proficient and very few have any telecomm devices in home (excluding landline and cell). • Most do not have access to the internet. • Do not often buy health foods and vitamins, do exercises or go on diet. • African languages are far more likely to be the language of their innermost thoughts. • They have not taken a holiday in the past 12 months.

39. Core Clusters • The Traditional Segment (Trads): • somewhat old-fashioned and insular • conservative, and conformist views • habitual and time honoured practices, fairly predictable • almost stuck in their circumstances & culture • The Cosmopolitan Segment (Cosmos): • progressive, modern and contemporary • multicultural and multi-ethnic views • a somewhat complex, worldly outlook

40. Cluster splits in total population Source: futurefact 2012

41. Trads • While there has been some intergenerational class mobility out of the working class and into the middle class, this has happened at a relatively slower rate. • Many actually go to bed at night feeling hungry. • They socialise in their neighbourhoods and are less likely to have friends in other race groups. • They are far more likely to live in townships than suburbs. • Their use of cell phones is confined to the basic functions such as voice calls, text messaging and please call me’s. • The African language speakers prefer their indigenous languages when listening to the radio or reading a newspaper. Source: futurefact 2012

42. Trads Internet uptake Cell phone Cell phone activities (base: with cellphone 76%) Source: futurefact 2012

43. Cosmos • Cosmos enjoy riding the change wave – embracing technology and the internet, with smart phone technology being incorporated on multiple levels into their lives. • They diet and have regular exercise, viewing us as a country that is more like the US and Europe than other parts of Africa. • They are into sophisticated banking activities and have a considerable degree of social capital to enable their lives and lifestyle choices. • They are pro-choice on the abortion and gay relationship fronts. • They tend to have friends in other race groups, with considerable social mobility being evident and it is fairly rare for them to choose indigenous language radio stations, TV channels or newspapers. Source: futurefact 2012

44. Cosmos Internet Cell phone Cell phone activities (base: with cellphone 89%) Source: futurefact 2012

45. LSM Profile of Trads and Cosmos: total population The tipping point from Trads to Cosmos is around the LSM 7 stage. Source: futurefact 2012

46. MTN Prepaid and Contract Profile of Trads and Cosmos It would be interesting to look more closely into the headspaces of the Cosmos who are prepaid MTN users versus the Cosmos who have contracts with MTN or even a competitor analysis. Source: futurefact 2012

47. In conclusion….

48. Using the findings • MTN’s marketing team can use the findings according to their specific strategic imperatives. • In each case the headspaces of the specific markets could be a critical ingredient to decisions on marketing and communication messages and the media selected for marketing and advertising purposes. • This interrogation is merely a taste of the relevant issues but further analyses can be undertaken if a more intensive focus is necessary on specific elements.

49. “If I don’t drink I won’t have fun/be cool/be accepted” Source: futurefact 2012

50. Thank you www.futurefact.co.za