Warc, 23 August 2013
JOHANNESBURG: South African adspend on digital channels is set to expand very rapidly, and the sector's recent growth may have been underestimated by the industry, media agency executives have suggested.
Latest adspend figures from Nielsen, the market research firm, suggest that around 3% of all marketing investments in South Africa are made online, but leading industry figures said the true proportion could be as much as three times higher.
"We feel digital is a key medium and has been under-read by AdEx," Ian Manning, MediaCom CEO, told the Financial Mail. "We estimate it's just under 10% of the market."
"It is going to grow. It has expanded more than people acknowledge," Manning added. "I estimate that in the next year digital spend will increase by 30%-40%. The share of spend that digital makes up will increase to 15%."
His comments were echoed by Michelle Meyjes, CEO at MEC Group, who likewise placed digital at 10% of overall investment, although her projections were more modest. "I think we'll see a 3%-5% increase year on year," she forecast.
Whatever the figure turns out to be, it is clear the digital landscape is altering rapidly. The Digital Media & Marketing Association recently said South Africans are now spending more time online than with traditional media.
This presents a new set of challenges to media agencies. Wayne Bishop, managing director of media agency PHD in Johannesburg, said the difficulty in digital media-buying was not so much in implementation as in predicting where the market would move next.
"Due to the advanced degree of measurability of online media, we can accurately trade, serve and map inventory to follow the consumer in real time, but this is limited to the current landscape," he stated.
"What we don't know is which social network will be the next Facebook, how many more pages will be launched before the end of the week and what type of content might resonate in the market," he added.
One way agencies are tackling the issue is to increase their expertise. Manning said he was sending people overseas for training and that around 20% of MediaCom staff were now digital specialists.
Data sourced from Financial Mail; additional content by Warc staff