PwC and IAB SA recently released the results of the 2016 annual Internet Advertising Revenue Report. Key outcomes from the report indicate total internet advertising across all forms, devices and platforms increased by 13% to R3.95 billion.
Brought to the industry annually by the IAB SA in collaboration with PwC, the objective of this report is to provide the South African digital industry and advertising market with more accurate insight into digital spend by South Africa’s advertisers.
Regardless of downturn in the South African economy, the internet advertising market continued to show healthy growth of 13% (almost half a billion rand) in spend from 2015 to 2016 and continues to show exponential growth since 2013 when spend was only R1.3 billion.
A number of trends within various segments of online advertising are emerging. Growth in Online and Mobile Internet spend is underpinned by the shift to mobile internet advertising, with social media gaining most share, whilst paid search internet advertising was up significantly from 2015 by 19%.
So who are the big spenders?
There has been significant year-on-year movement in terms of industries increasing their stake in digital advertising spend. In 2016 the automotive industry, from not featuring in the top 4 of 2015, catapulted itself into the top spot as the biggest digital advertising spender in South Africa. Comments PwC: “As a result of economic uncertainty and consumers cutting costs, there was a substantial decline in new vehicle sales. To counteract this decline, the industry boosted advertising spend as they promoted discounts and special offers to incentivise sales.”
Retail emerged as the second largest spender (up from 4th in 2015), with Financial Services surprisingly moving to 3rd (from 1st in 2015) and FMCG coming in 4th (from 2nd in 2015).
“This study confirms some things we already knew and others beyond what we anticipated. With return on marketing investment becoming more and more a measured deliverable against marketing spend, it is imperative that advertisers, media planners and buyers are well versed in the trends now and anticipated in the future to deliver on these expectations,” says Gustav Goosen, Head of IAB’s Research Council.
The report is compiled by PwC based on submissions received from South African advertisers (agencies/clients) and alternative media buying channels or platforms (the buy-side), as well as submissions received from local publishers and on-sellers (the sell-side).
“The Digital Adspend Study is extremely important and beneficial to the advertising industry and while we have seen an increase in participation levels on the buy-side, I urge all South African advertising agencies as well as their clients to actively participate in PwC’s calls for submissions to ensure we can provide a more comprehensive report year on year going forward,” concludes Goosen.
IAB members may contact the IAB SA at firstname.lastname@example.org to obtain a copy of this report or to participate in this year’s PwC adspend survey.