Digital advertising in South Africa is on the rise, driven by business-oriented trends, says this year’s IAB South Africa Internet Advertising Revenue Report, also known as the Online AdSpend Report. The annual report, conducted in partnership with PwC, seeks to accurately measure the total revenue generated by domestic online media, including mobile advertising.
Paula Hulley, IAB South Africa Advertising Revenue Report Lead, Research & Measurement Council and Managing Director at Digitas Liquorice, notes the 2024 Report confirms the significant expansion of online advertising as forecasted in last year’s report. “While we have witnessed how the digital ecosystem has become a lot more creative, driving performance and connecting with audiences to build trust, the power of generative artificial intelligence (AI), retail media and social communities continue to provide opportunities for marketers and business growth alike.
“If the digital environment can remain focused on key areas of excellence then we are most likely to see sustainable growth and greater allocation of advertising investment in the years to come.”
DIGITAL GROWTH CONTINUES AS TECHNOLOGY ADVANCES
While accelerated growth experienced in digital advertising post-pandemic stabilised in 2022, this year’s Report shows a remarkable 21.5% year-on-year (YoY) growth — more than double that of the previous year. Revenue during the same period increased to R17.7 billion, up from R14.5 billion in 2022. These growth levels are more reflective of the growth expected in the future. This year also saw an upward growth for Internet advertising, which now accounts for 39.8% of the overall advertising market in 2023, up from 36.1% in the previous year. Paid search revenue also increased from R11.14 billion in 2022 to R12.99 billion for the 2023 fiscal year.
“As businesses increasingly embrace digital channels to connect with their audiences, we are witnessing a significant shift in the advertising landscape. This Report underscores this trend, highlighting the substantial growth in online ad spend and the increasing importance of digital strategies for businesses,” adds Clare Trafankowska, Chair of the Research & Measurement Council and Head of Digital Media and Marketing at FNB. “To cement IAB South Africa’s commitment to creating progression and innovation in the industry, the Council has also identified four key trends that will continue to affect internet advertising spend in the foreseeable future.”
The four key trends cover the impacts of AI, the customisation of ad campaigns, a new way of leveraging social media and the introduction of retailers as advertisers:
The impact of AI on digital advertising
AI has become an essential tool for brands and marketers, helping to automate tasks like budget optimisation to generating personalised content and optimising ad campaigns. Major brands such as Audi, Takealot and Nando’s are already leveraging AI to improve their advertising strategies, with Takealot offering personalised product recommendations and Nando’s monitoring social media sentiment and conversations to create relevant, targeted content. The benefits of AI are significant, however, responsible use and ethical considerations remain crucial. As AI continues to evolve, the South African government and industry stakeholders are working to establish guidelines and regulations to ensure the beneficial and ethical application of AI within digital advertising.
The importance of targeting and personalisation
Third-party cookie deprecation (i.e., the phasing out of third-party cookies) still looms, which has led to companies relying on AI to analyse user data to create highly targeted campaigns. This shift is driven by the need to effectively reach audiences without relying on traditional tracking methods. AI offers powerful capabilities, such as using dynamic creative to ensure ads are served at the right time with the right message to the right consumer, but privacy concerns and ethical use of data remain paramount, meaning opt-in and opt-out visibility will continue to play a key role.
The influence of social media communities
Social media communities have become powerful platforms for brands to connect with consumers and drive engagement. These spaces allow participants with comfort, connection and a place to engage with their interests and like-minded individuals. By participating in these communities, brands can leverage authentic word-of-mouth marketing, build customer loyalty and increase sales. A defining element that will ensure a strong brand presence is the authenticity of the brand content and the value offered to community members in exchange for engagement, which will be essential to avoid negative online sentiment and discussions.
The rise of retailers as advertising platforms
The growing popularity of online shopping has transformed the digital advertising landscape. Retailers are now using their platforms to reach consumers in new, unexpected ways. Brands can adapt to this trend by offering convenient features such as same-day shipping, personalised recommendations and loyalty programmes. E-commerce platforms like Amazon and Takealot offer significant opportunities as well, however, retailers must focus on building their first-party data and providing seamless omni-channel experiences. Checkers’ omni-channel strategy is a great example, with their offers remaining consistent across their online and physical channels while the retailer has also capitalised on its brick-and-mortar spaces to increase advertising opportunities. Additionally, the growth of township e-commerce and social media marketplaces, where customers can generate income through buying and selling online, highlights the evolving nature of retail media in South Africa.
“The trends identified by the Research & Measurement Council are key to understanding the evolution of the consumer and run parallel to IAB South Africa’s objective of servicing the 2030 customer,” says Razia Pillay, CEO of IAB South Africa. “Keeping these conversations top of mind is imperative and this Report remains a key component of IAB South Africa’s mission to provide the digital media and marketing industry with essential insights that support strategic growth and development.”
GET YOUR COPY OF THE 2023 IAB SA ONLINE ADVERTISING REVENUE REPORT NOW
For in-depth data and analysis, the full IAB SA Online Advertising Revenue Report, conducted by PwC (‘Online AdSpend Report’), is available to IAB South Africa members on the IAB South Africa Member Portal. Sign up to become a member at iabsa.net.
Participants of the 2023 Report can access the full report by contacting debbie@iabsa.net.
CLICK HERE to submit your press release to MyPR.co.za.
Author: Chimera Creative from Chimera Creative on behalf of IAB South Africa.
Watch a IAB South Africa’s Online Advertising Revenue Report Shows Growth in Business-Oriented Trends video:
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