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Home Advertising

Digital advertising in SA: A growing force

Latest IAB South Africa Internet Advertising Revenue Report is evidence of the continued growth and maturity of the digital advertising landscape in South Africa.

by Paula Hulley
October 24, 2024
in Advertising
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Digital advertising in SA: A growing force

Consultancy Kepios indicates an increase in South African social media users — from 25.8 million in 2023 to 26 million at the start of 2024 — while research firm GWI reports that 78% of South Africans use social media to research brands and products/Freepik.com

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Digital advertising has become indispensable for brands and businesses of all sizes. Post-pandemic, more consumers than ever before are digitally connected.

In fact, Meltwater’s Global Digital Report ranks South Africa as number one globally for time spent using the internet — at nine hours and 24 minutes — with the majority of that time spent on social media platforms.

Given this, businesses have found more reasons to invest in digital advertising — from targeted reach and measurable results to engaging formats and cost-effectiveness. And as businesses continue to recognise the power of online channels to connect with consumers, the investment in digital advertising continues to soar.

The latest IAB South Africa Internet Advertising Revenue Report (‘Online AdSpend Report’) is evidence of the continued growth and maturity of the digital advertising landscape in South Africa, showing a remarkable 21.5% year-on-year (YoY) growth from 2022, reaching a new high of 39.8% of the overall advertising market.

This is a significant increase from 36% in 2022 and 34% in 2021.

Double-digit growth

By tracking the growth and evolution of revenue generated by digital advertising, industry stakeholders can gain a better understanding of the market dynamics and make informed decisions about their future strategies.

Data guides effective digital marketing strategies, helping optimise investments, while emerging trends present opportunities for monetisation. As the Online AdSpend Report reveals, digital ad spend has experienced double-digit growth over the past couple of years, reflecting a shift in consumer behaviour towards online channels.

The growth of online retail in South Africa has further created new avenues for advertisers as retailers leverage their platforms to reach consumers at various stages of the buying journey.

Checkers’ omni-channel strategy, for example, shows how the retailer’s offers remain consistent across their online and physical channels while it capitalises on its brick-and-mortar spaces by increasing opportunities for brands to advertise.

Evolution of social advertising

While paid search remains a primary driver of digital ad spend, accounting for 73.3% or R12.99 billion of the total digital ad spend in 2023, social media should not be dismissed. Platforms such as Instagram, Facebook and TikTok have become crucial components of the digital advertising landscape, with social media marketplaces the next step in the evolution of social advertising.

As the digital landscape continues to evolve, monitoring trends such as these will be essential for staying ahead of the curve. Consultancy Kepios indicates an increase in South African social media users — from 25.8 million in 2023 to 26 million at the start of 2024 — while research firm GWI reports that 78% of South Africans use social media to research brands and products.

This correlates with the Report’s findings that social media has become a key contributor to the overall internet advertising market as Meta (Facebook and Instagram) accounts for 75.4% of paid social revenue in 2023, up from 71.1% in 2022, while TikTok saw a 47.7% YoY growth and X (formerly Twitter) decreased from 16.9% to 10.1%.

Powerful communities

Social media communities, in particular, have emerged as powerful platforms for brands to connect with consumers and drive engagement. These spaces allow participants to engage with their interests and like-minded individuals, fostering a sense of belonging and connection.

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.

As marketers, we can typically separate our brand-building and performance investments. If we want to create better experiences with our customers, we need to ensure our targeting and content is relevant, that it makes sense, that it builds the brand and opens the opportunity to shop if the consumer wants to.

Leveraging AI

Here, brands can become the answer to what the consumer needs instead of simply selling the consumer more products. Artificial intelligence (AI) will be key to addressing this as it can be used to analyse user data, create highly targeted campaigns and optimise ad performance, mitigating the looming depreciation of third-party cookies (i.e., the phasing out of third-party cookies).

This shift is driven by the need to effectively reach audiences without relying on traditional tracking methods. Brands such as 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.

In the same vein, the use of AI also raises concerns about privacy and ethical data usage. Brands must ensure their AI-powered campaigns comply with data protection regulations and respect user privacy.

Maximising ROI

As the end of 2024 nears, the digital advertising landscape in South Africa is poised for continued growth, driven by factors such as increasing internet penetration, the rise of e-commerce and the ongoing development of new technologies.

Businesses will need to continue adapting to the changing consumer landscape and digital advertising will play an increasingly important role in their marketing strategies.

By understanding the latest developments in the digital advertising landscape, such as those presented in the IAB South Africa Online AdSpend Report, businesses can make informed decisions and maximise their return on investment.

Paula Hulley, MD of Digitas Liquorice, Publicis Groupe’s digital specialist agency, has 20 years of experience in interactive digital marketing. Her previous roles include CEO of IAB South Africa, Head of Innovation at Ogilvy CT and MD of Gloo CT. Hulley also sits on the IAB South Africa Research & Measurement Council, heading up the IAB South Africa Online AdSpend Report. She is currently completing a Psych MA on the impact of zero-sum thinking on cooperation.

The IAB South Africa Internet Advertising Revenue Report (‘Online AdSpend Report’) is conducted annually in partnership with PwC and seeks to accurately measure the total revenue generated by domestic online media, including mobile advertising. The full report is available to IAB South Africa members on the IAB SA Member Portal. To become an IAB South Africa member, visit iabsa.net.

This piece was originally published on Topco Media on 17 October 2024.

Sources:

Meltwater: 2024 Global Digital Report

Tags: ad spend reportadvertisingAIartificial intelligencedigital advertisingdigital strategyIAB South AfricaIAB South Africa Internet Advertising Revenue ReportmediaMeltwater Digital ReportPaula Hulleysocial advertisingsocial mediathird-party cookies

Paula Hulley

Paula Hulley joined the IAB SA as CEO on 1 July 2018, with more than 15 years of experience in building brands and consumer-engaging experiences. She joined digital agency Gloo in its first year of inception, going on to become MD of the Cape Town office and then MD of the integrated business, Gloo@Ogilvy post the merger with Ogilvy in 2015. Hulley then became head of innovation and digital for Ogilvy Cape Town.

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