A recent report by PwC on global advertising trends showed a significant increase in digital spend worldwide. One of the nine countries highlighted by the report as driving this growth is South Africa, a country where digital is about to grow from a sideshow to a main attraction.
For a long time, South Africa has had a fairly lopsided digital market; a host of world class mobile operators and affordable points of entry caused the mobile market matured quickly, while internet penetration remained low, mainly due to exorbitant data costs. However, over the last couple of years this divide has been shrinking rapidly, and the country’s digital market is in the midst of a boom that shows no signs of slowing.
Cape Town, South Africa
According to the PwC report, marketers in South Africa spent in excess of R3.5 billion ($270 million) on digital advertising in 2015, a very healthy 36% increase from the previous year. Unsurprisingly, the most significant growth came from mobile, showing an astronomical 182% growth. Advertising spend online jumped by 68% and search advertising rose by a respectable 22%. The majority of brands’ online marketing budget went to paid-search ads, while 27% was spent on online display and video.
Access to the internet and technology, and the way brands perceive and approach digital media are some of the major driving forces behind this growth. Limited internet access has been the achilles heel of the South African digital landscape for a number of years. This was mainly due to the high cost of data, and limited access to platforms on which to access the internet. According to a report by World Wide Worx and Cisco Internet Business Solutions Group, a mere 5 million people in South Africa had access to the internet in 2010, but with rapidly falling data prices and the swift market penetration of smartphones, this figure rose to 25 million, nearly half of the country’s population.
This growth, along with the coming of age of online application development and digital marketing strategy, has created the kind of environment brands have been dreaming of since the early days of the internet. A lot has changed since the early days of banners, skyscrapers and annoying Flash videos on bland, static websites; social media and the rise of ecommerce has changed the way consumers use the internet and integrate it into their lives.
According to Jason Curtis, Account Director at New Media Publishing, a major media publishing agency in South Africa, this has had a significant impact on how brands approach the internet, and why digital is luring marketing spend away from traditional media such as print and television.
“Push marketing of the past lacks the power it once did [and] engagement and community curation, through the power social media, is where conversions and brand loyalty now lives.
“Engaging in these spaces, and providing quality content, builds affinity and with it sales. With community comes data – with data the offer and conversation becomes more personalised – all of which aids retention and elevates brands into a space where they control the conversation and can respond to the nuances of the market they’re aiming to talk to.”
While studies like the recent PwC, and World Wide Worx, project that marketing spend on digital media will overtake that of TV within the next couple of years, internet access remains a limitation both in South Africa, and globally as a significant portion of consumer spending still goes towards accessing the internet.
Once this challenge has been overcome, only then will the true potential of the digital market be revealed.