The Media Yearbook, the only one of its kind in Africa, offers an important and independent overview of the media industry in 2015 as well as giving important insight and perspective into global trends and forecasting for 2016. Here business manager at OMG Digital (Omnicom Media Group) discusses what’s currently driving the digital media landscape and why collaboration is key.
Last year, 2015, was another head spinning, ever-evolving year in digital for agencies, publishers and clients. No one party can really lay claim to the digital “holy grail” and many players had to start questioning their business models, not just for their growth and sustainability over next year, but in the long term.
Here are some of the key impacting factors that are going to drive and deliver closer industry collaboration, and require South Africa’s digital media industry to “play nice” to really deliver digital media experiences for an ever-changing landscape.
Internet, internet almost everywhere
With ease of access and lower pricing in place, vast numbers of South Africans are moving their internet usage to smartphones due to their greater internet capacity, connectivity and mobility.
Cisco Visual Networking Index 2015 projects 27 million internet users in SA by 2019. The majority of the growth is projected to be centred on internet video consumption. According to this, smartphones will become the primary internet tool commanding 30% of all networked devices in South Africa.
This is something that the South African telecoms industry is actively driving and is further fuelled by OTT (over-the-top) operators.
However, we must not forget nor neglect traditional desktop access. Desktop access is still a relevant point of entry to the internet, making it not only valid, but also valuable to companies and marketers alike.
Despite technological limitations experienced in the current market environment, South Africans make the most of what is available to them.
The general connectivity and Wi-Fi possibilities are not on par with what Europe and America experience, and has left many users feeling short-changed by the internet revolution.
While there has been growth in fibre networks, and related technology that drives this area, we are nowhere near close to realising its full potential or market penetration. Fibre optics and Wi-Fi installation is a long process and this hinders the progress of many online projects and high-end content driven campaigns.
The increased complexity of the digital landscape has left consumers constantly fighting “digital-fatigue”. The never ending bombardment of brands on consumers is resulting in the more traditional banner advertisement becoming obsolete in the face of a more demanding and engaging brand experience.
Modern consumers demand unique advertising content, which must be presented in a unique format. With the explosion of internet video downloading, content marketing is an area that requires recognition and attention.
Content marketing does however require a mind-set shift on all fronts, such as agency and client budgets and resource realignment to produce valuable content that consumers want to interact with.
Software is now buying online inventory. It makes total sense for cost conscious advertisers and has many benefits and targeting capabilities. Programmatic is also a great way for advertisers to sell unsold inventory for publishers, but at this stage this is one of the only real benefits to the South African digital publishing community.
This trend, which is being adopted by advertisers and demanding a larger share of digital media budget, is here to stay.
Publishers are going to have to adopt innovative revenue models such as sponsored content and native advertising (paid media that matches the form and function of the platform on which it appears).
Programmatic buying will also mean that publishers need to start partnering to ring fence inventory and ensure premium quality format and rates. We are likely to see a number of online publishers partner in order to increase audience and in turn, increase revenue from multiple channel streams.
Ad blocking is a term that makes publishers (and advertisers) as nervous as programmatic, as it is an international trend that threatens the internet publishing business.
The reality at this stage is that the majority of South Africans are not as familiar with ad blocking software as other markets. When this trend does however take off in SA, advertisers are going to have to re-evaluate how they design ads and develop compelling or highly targeted content that does not get blocked, or that the consumer will not mind seeing.
This will require advertisers and publishers to work together to develop bespoke campaigns that are less reliant on push advertising models. Data cost and speed will also affect adoption of such technology, especially in a data sensitive market like SA.
Hybrid e-commerce models
Issues such as SA’s vast geography, cost of delivery and reliability, methods of payment as well as the actual data cost involved in online shopping still plague the e-commerce industry.
Companies have provided consumers with unique strategies that allow shoppers the opportunity to view and purchase goods online and then collect purchased goods from their closest branch destination.
To deliver substantial growth in the SA e-commerce market, local companies need to adopt market specific approaches to drive behaviour change from in-store to e-commerce.
TV is here to stay
Television still commands and will command the majority of ad-spend in SA for the foreseeable future. This is despite the various projections that digital media spend will eclipse all traditional channels – there is simply too much disparity in our market.
Second screening such as Facebook and Twitter is however, on the rise and the challenge now is for advertisers, agencies, publishers and channels to collaborate in order to deliver compelling content and engagement through digital media.
This again, will require all parties to evaluate their business models and approaches to really capitalise on the evolution of TV.
Synergy is essential
Collaboration is the key. With all elements taken into consideration, all players in the digital environment need to anticipate that “playing nicely with the other children” is really the only way forward.
All platforms must address the consumer in a personal and deliberate manner, one that is going to establish long term relationships and entrench participation in the concept that is being sold.
A truly collaborative, consumer -first experience is one that will fully integrate all the mediums on offer, in a truly innovative way.
This story was first published in The Media Yearbook, an annual title of Wag the Dog Publishers.
Noleen Cochran is business manager at OMG Digital (Omnicom Media Group).
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