Internet Advertising: Digital on the rise

INTERNET advertising in SA has grown by 15%, according to the latest report from the Interactive Advertising Bureau (IAB) in association with consulting firm PwC.

The survey takes a comprehensive look at spend in 2014 and reveals growth at a rate of more than three times the current consumer price index.

The IAB says the increase in online advertising provides an indication of the rapid growth of both the size and importance of the digital marketing industry.

Online advertising revenues rose from R452m to R566m between 2013 and 2014, while Internet search advertising revenues surged to R865m from R680m. Total revenue of the online advertising market in 2014 is estimated at R1,5bn.

The online growth is in sharp contrast to total ad-spend growth in 2014 of a little over 6%. While the data is more than a year old, it is, PwC says, the latest and most comprehensive indicator of where brands are putting their money.

Total advertising spend in SA is almost R39bn and is set to rise to just over R52bn by 2019. While SA has increasing mobile penetration, there is some confusion over a decrease in advertising numbers. The report says a drop in mobile revenue (from R172m to R64m) is misleading, due to the exclusion of search revenues, adspend moving off-shore and low levels of participation from mobile ad market participants. Mobile search revenues are estimated to comprise 60% of total mobile ad revenues.

“Because of greater availability of mobile data services and increasingly affordable smartphones, mobile Internet subscribers are estimated to increase from 36,6% to 69,1% of the population in the next five years,” says IAB research council head Gustav Goosen. “Already, 61% of SA’s Web traffic is generated by mobile devices.” As advertisers target consumers on their mobile devices, the challenge will be to communicate a unified message over a multitude of devices and platforms.

Online news and media platforms remain the most popular digital publishing type, raking in close to 80% of adspend in both 2013 and 2014. Social media declined from 16% to 9% while classified ads leapt from 2% to 10%. Of social media spending, 60% is on Facebook, followed by 18% on Twitter — a mixed blessing for the SA ad industry.

“These brands are leading the push towards substantial investments into online advertising but the money is not going to local publishers.” One way to stand out against the competition, he adds, is to move from static ads to video ads. Only 2% of display revenue in SA comes from video ads.

Article taken from Financial Mail