The impact of weakening ZAR is devastating for digital marketing companies

eNitiate | Bra Willy Seyama | Weakening of the Rand | Apr 2017 - Banner

I am not sure if this is an open letter to President Jacob Zuma, the Treasury and the ANC at large. While I am not writing this blog with that in mind, maybe this shoe fits.

The current state of economic affairs is woeful for eNitiate’s business – an eight-year old digital marketing and insights company that is based in South Africa and that mostly uses cloud-based software solutions for its B2B services. Reason is that prices of these solutions are Dollar denominated.

10-Year $/R exchange trend

eNitiate | Bra Willy Seyama | 10-Year USD/ZAR Exchange Rare Trend | Apr 2017 | Apr 2017

eNitiate was founded on 1 November 2008, at the height of one of the worse economic downturns.

Rationale beings will ask what I was thinking picking such a trying time.

Research shows some of the greatest companies of all time were founded during these crazy times.

More than 8 years on, we are still around and going strong. By association, eNitiate will ….

Interpretation of the USD/ZAR graph

Back to the graph.

eNitiate | Bra Willy Seyama | Weakening of the Rand | Apr 2017
Source: Buffer Billing Plan

When we entered the digital marketing space, 1 USD bought us just over R11.

South Africa’s currency briefly strengthened until end of April 2011 at best 8-year low of R6.57.  

The monthly Rand cost of a basic Buffer plan – at $10/month – was R65.70 at that stage.

The cost of using this social media integration software that was founded in late 2010 has since doubled – thanks only to ZAR that has been progressively weakening against the USD.

Today, the same platform costs us R138 per month.

I picked an example of one of the least costly software solutions above to make the point.

We do lots of social listening and analytics as part of our service offering.

I shudder to think how we were going to afford a premium tool such as Brandwatch, which charges $25,000 annual licence fee!

I am grateful for the presence of Brandseye that is ZAR-based.

But this is one of a few software solutions that we are using from a dozen or so.

Parting shot

With South Africa’s credit rating having been condemned to a junk status by the key ratings agencies, what impact is this going to have on the already limping ZAR?

Should I start preparing to pack up and join the employment queue?

Will I even find a job given the current high unemployment rate?

What is going to happen to the jobs of 6 other people who work at eNitiate?

Clearly, this is not business as usual.

Did you find this eNsight valuable?

Sharing it on social media will ensure that many more people can benefit.

Select your preferred social network found on the right sidebar to share it.

Select your preferred social network found in the footer here below to share it.

It will take only seconds.

Related Posts:

Related Post:

the love.

share with the world

the love.

share with the world