Google owns the lion’s share of SA online advertising space, mobile still tiny

South Africa digital

The South African online advertising space is growing, bringing in revenues of more than R1.3-billion a year. That’s good, but before any agency owners go making expansion plans remember: Google takes in more than half of that figure.

No ad to show here.

That much was today confirmed in an inaugural Internet Advertising Revenue Report, prepared by PwC SA and released by the Interactive Advertising Bureau (IAB) South Africa. The study, which takes into account revenues reported up until 31 December 2013, also revealed that online advertising revenues excluding search and mobile amounted to R452-million in 2013.

Despite the fact that smartphone penetration rates have shot up in South Africa, mobile remains the smallest medium within digital advertising, accounting for just R172-million in 2013.

The lion’s share of South African digital ad revenue though still goes into Google’s coffers. According to the report, search accounts for 52% of the total internet advertising revenue. Of course, not all of that goes to Google, but when was the last time you did a search using Bing?

By way of comparison TV ad spend increased by 11% from 2012 to a total of R17.9-billion, suggesting that online still has some way to go in terms of ad revenue.

Read more: The ticking tax-bomb: is Google good for your country?

Gustav Goosen, the IAB’s Head of Research Council, acknowledged that there had been teething problems with the report. That could be one reason why the report, covering 2013, has only come out now.

“We believe that the initial outcome of the study is what the industry wants to see, it will become easier for more industry players, both sell-side and buy-side, to participate and submit the required data to PwC for the second reporting period ending 31 December 2014,” he said, adding that “The IAB SA will be working with PwC in the coming weeks to launch the submissions phase of the second annual study, and we look forward to seeing an extended list of contributors working with PwC.”

According to the IAB, the study has two overarching long-term goals. The first is to increase the frequency of the report as soon as practically feasible. Goosen says: “We’re an immediate medium and we need to strive to have this type of industry data available more frequently than on an annual basis.

Secondly, IAB SA says it wants to contribute South African data into the IAB’s global data set to ensure the SA market insights reach a world audience. This would ensure our market is adequately represented and reflected on a global stage,” Goosen says.

Read more: SA online media could soon get code of ethics, regulatory system

IAB SA claims the results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertisements on the Internet. This to date is the most respected study conducted worldwide.

“Internet advertising is maturing as a medium,” says Vicki Myburgh, Entertainment and Media Leader, PwC Southern Africa. “This is a growing category owing to ongoing movement of ad spend into all three core categories, display, search and classifieds.”

All revenues included in the report are recorded on a net basis, and therefore exclude rate card discounts and agency commissions. Information is prepared according to survey responses received from the participants. Search revenues were obtained from the PwC Entertainment and Media Outlook: 2014 – 2018, South Africa – Nigeria – Kenya survey. Both publishers and agencies have participated in the survey.

No ad to show here.

More

News

Sign up to our newsletter to get the latest in digital insights. sign up

Welcome to Memeburn

Sign up to our newsletter to get the latest in digital insights.

Exit mobile version