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The cost of mobile advertising for South Africans

30 Oct 2009 13:118 commentsBizLike
Mobile advertising is growing at an alarming rate in South Africa, but we are paying nearly 500% more than any other country in the world for our advertising space. Why? Simply, there is not enough South African inventory or publishers. The demand for advertising is greater than the space available.
The average CPC (cost per click) in other countries like the US and UK is about US$0.08, while in South Africa it costs about US$0.25 per click on average.

The problem exists because South Africa itself does not have any local inventory/publishers of WAP portals to speak of. We have MXIT, Vodafone Live, Soccer Laduma and a couple of insignificantly smaller ones. In my business, I call on local brands and businesses to create WAP portals at least at the rate that they create web sites. The reality is that last year the revenue generated by mobile advertising from SA was approx. R1.9bn (more than cinema), but 90% of that revenue was spent on overseas mobile publishers like BBC, CNN, My Gamma and others. This means that the revenue generated by local advertising landed in the hands of foreign media companies and mobile advertising servers like Admob (US), Admoda (U.K) and Buzz City (South East Asian).

I just get sick and tired of South Africa and Africa being re-colonised every time we happen to show growth in a particular sector. Being an emerging territory always gives big western businesses a head start on capitalising on our revenues. This should be a something for all of us to think about. I also note that organisations like MMA in South Africa don't seem to have these issues at the top of the agenda and this is a matter for concern.

I am once again urging local brands and organisations to create mobile Wap portals and build huge communities that are able to give advertisers platforms for target advertising that is local in nature. We also have a duty to bring mobile social networking to Africa and South Africa in ways that give us the platform to express ourselves, share, self-actualise and access each other within a localised context.
 
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About the author

Gloria Ruhrmund owns and operates G3 Mobile (www.g3mobile.co.za), a consulting and mobile media agency. She spent 15 years in the music industry at Universal Music Group in marketing, new business development of new media and mobile strategies, and was GM of Glocell Wireless Service Provider (2005-2008), a South African WASP where she, among other things, conceptualised and co-created WAP-based mobile-only social networking service http://wap.ubyou.co.za. Contact her on tel +27 (0)11 880 9149 or email , follow her on Twitter at @G3Mobile and read her blog at www.g3mobile.blogspot.com.
Veja
Thank you Gloria-
Africa needs people like you, you are really a true African. Posted on 30 Oct 2009 13:40
Brett (proud South African)
Another point....-
With healthy advertising prices, the time is perfect for South African Media and Mobile Companies to build Mobile Internet sites to take opportunity of these conditions. South Africans missed out on the digital revolution, but we are at the forefront of Mobile. So get out there and start earning revenues by joining Admob who pay out 60% of the revenues to Publishers. If you are thinking of building a Mobisite and taking advantage of these great conditions please feel free to contact me on bstclair@admob.com for advice. Posted on 30 Oct 2009 16:22
rob allen
Taking the Advertising Back-
I generally agree with what is said here but it probably is fair to say that the mobile internet figures are probably better than the traditional internet where the biggest 9 sites visited in South Africa are run by American internet firms.

In regards to the sentiment of taking our advertising back I have recently done a feeler launch of a site called AdAd.co.za which is about empowering all South Africans & South African businesses to set up their own mobile web ads for free. We try to make the process as easy and mobile optimised as possible and no computer is required. If we can build some momentum with our initiative we may be going in the right direction to take our advertising back. Posted on 2 Nov 2009 08:35
Gloria Ruhrmund
ADAD.co.za-
Hi Rob,
How can I get hold of you to discuss. Please contact me at gloria@g3mobile.co.za

Many thanks
Gloria Posted on 2 Nov 2009 15:27
@Brett-
The problem with Admob is that it pushes CPM rates down to an unacceptable level. This is a short term solution for anyone looking to generate revenue off their mobi site, in the long term it will have a negative impact on the market. Posted on 2 Nov 2009 10:18
Elan Lohmann
Supply and demand-
It is an issue. The PC web is no different to the mobile web in this regard.

SA inventory is more expensive purely as a factor of supply.

In terms of the mobile web it would help if mobile operators were more accommodaing in creating the echosystem by placing mobile sites on deck (on platform) to drive users.

BUT the flipside of your argument is to say that oversease the inventory has become more devalued. DIGITAL inventory in general is tragically devalued when compared to traditional media. Its sad all round.

Elan Posted on 2 Nov 2009 20:33
Hans Mol - Be-Mobile
Cost of acquisition-
Gloria, you are right on all acounts of your article however despite the fact that the prices are so high (locally) the cost of acquisition per customer provide an exceptionally compelling argument to utilise the likes of Admob and Buzz city as mobile advertising platforms. The benefits for companies targeting international territories are even more compelling where your COA drops even lower.

The fact is that local companies have been riduculously slow in adopting the mobile media platform as a means for marketing and as such we are playing catch up but it won't be long before there are enough publishers to help tip the scale and bring the local prices down. Posted on 3 Nov 2009 11:36
Helen Dawson
Prices are too high-
Coming in a bit late on this.
Good article Gloria and you raise a very good point.

I disagree with Hans - using the international networks to build traffic to local sites is expensive, especially when targeting local audiences.. We're forced to pay USD$ rates which is costly and unpredictable given the fluctuating exchange rates.

We need better local solutions and mobile networks so we can effectively build our mobile platforms. Posted on 6 Nov 2009 10:24
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