Dentsu Aegis Media recently released their global ad spend predictions, pinning it at around 5% for the rest of 2014 and then into 2015. The numbers for Africa are difficult to pin down and it is even harder to forecast future trends. Celia Collins and Ilsa Grabe take a look.
But we can draw on the following which should assist in the tracking and predictions for 2015.
The level of accurate measurement of ad spend is a huge problem across much of Africa so a true picture is hard to construct. Some countries do measure broadcast media quite well but not so for print and out of home. Some larger economies such as Angola have very little measurement at all in place.
Generally African economies are growing much faster than global economies so ad spend trends are all on the up. A solid reflection of this can be found on page four of the McKinsey report.
Conversely, several important economies have had setbacks that are reducing their growth plans. Among these setbacks are terrorism (Nigeria, Cameroon, Kenya); the Ebola outbreak (West Africa); collapsing currencies (Ghana); wars (Libya, Mali, Central African Republic). On top of this is the fact that the global slowdown has lessened demand for Africa’s raw materials such as iron ore, coal, platinum and oil.
Many global and large regional marketers – like P&G, Coca-Cola, General Motors (GM), Woolworths, Old Mutual, Diago, Peugeot – who are targeting and expanding through the development and building of major production plants, will continue to invest heavily into their advertising on the continent.
The OOH market is massive in Africa but several countries like Uganda, Tanzania and Nigeria have started to implement stronger regulatory regimes and this has seen many billboards being removed and in some cases countries like Nigeria have seen massive declines in ad spend. However this should turn around shortly and growth will again be seen.
Digitalisation of TV broadcasters has had a negative effect on viewers in some countries due to the costs that would need to be incurred for the broadcast boxes and with the DTT deadline looming, this could negatively impact all countries quite strongly in the next year.
Moving to the South African market
South African advertising investment has slowed down in 2014 vs. 2011 to 2012 where growth was 9% year on year. A factor we need to be aware of however are the limitations of online data reported, as only premium display and IAB SA member sites and revenue are reported, but as an industry we know that performance media like ‘search’ has been a key investment area across the board.
We can then either assume that this shows a slowdown in advertising investment or clients’ divesting their budgets into online media.
Key trends in investment and media consumption to note:
• Online, radio and TV investment continue to show growth
• Unilever, Shoprite Holdings and SAB Miller continue to be the top three advertising investors over a three year period
• Increased fragmentation across all media has led to more focussed investment approaches (targeted)
• YouTube has seen significant active grown of 53% in the last year
• Facebook has grown to a massive 11.8 million users in South Africa, much of this growth coming from the mobile segment of the population. Johannesburg has 3.4 million of these users. Although the Nokia Asha is the single most popular device used to access Facebook in SA, smartphone adoption has surpassed feature phone adoption for the first time (at 5.6 million vs. 5 million feature phone users)
• Mxit usage has declined to 4.9 million monthly active users, down from 6.4 million the previous year, a decrease of 23%. However, more than 7.4 million people have downloaded Mxit 7 since its release in November 2013, indicating interest in the network is still high
With consumers tightening their belts and advertising revenue appearing to have slowed the South African market is generally optimistic about a surge in marketing and investment growth in 2015.
Source: AC Nielsen Addynamix / World Wide Worx / AMPS 2013 Main Branded AB/ IAB SA
Celia Collins is business director at Carat JHB. Ilsa Grabe is a business unit head and media manager at Carat JHB.
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