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Local ad industry falling behind in online race

By: Terry Levin
19 Oct 2009 11:4412 commentsBizLike
Speaking at the Art of Digital Planning Workshop hosted by Digivox and Bizcommunity.com in Cape Town last week, Adrian Hewlett, chair of the Online Publishers Association (OPA) - the South African body armed with all the definitive info about global online stats, spends and trends - threw some welcome new light on the subject of digital revenue potential.

L-R: Andrea Mitchell, Digivox founder and conference organiser; Adrian Hewlett, OPA chair; André Britz, Digivox strategist; and Jonathan Allan-Barrett, Digivox project manager.
click to enlarge
For example, the South African online population has doubled in three years from 3.5 -7.7 million, to now include a respectable (but debatable) +15% of the population. No one would argue that 100% of these fall in LSM A and that they are most likely the most economically and socially active target audience that we have.

Yet according to Hewlett, online adspend in SA currently sits at only R419 million*. Compare this with a country such as Belgium, which spends about ten times that (US$500 million) to reach its online population of only 5.5 million users, and we can see that there is a deep well of untapped revenue for advertising practitioners to tap into by thinking online.

The OPA (www.opa.org.za) has emerged as the driving force behind the digital industry in South Africa. It invites membership and can help empower, not just the digital frat, but also the industry at large to achieve the kind of online revenues and recognition generated globally.

Having, somewhat reluctantly, I must admit, attended Digivox's Art of Digital Planning Workshop, I now cannot recommend this sort of event highly enough. Unless, of course, ad agency creatives and strategists really want to relinquish their power in the communications industry to media planners, it would serve them well to get to know the nature of the digital beast.

In this regard there can be no further excuses for failing to attend digital industry events on offer such as this week's OPA and FNB's free digital advertising panel discussion in Johannesburg on Thursday, 22 October 2009, and the November Bookmarks Week Workshops. My humble advice: book now and take your whole team. We can all only benefit from greater digital empowerment.

* Please note that the originally quoted figure of R67 million was based on the 2003 stats. This has been updated to the 2009 forecast. Our apologies for any misinformation.
 
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About Terry Levin

Terry Levin is the custodian of Off the Shelf Marketing (www.offtheshelf.co.za), whose mission is the development of new global African empires via the creation of iconic Pan-African product and brand development solutions. Terry is a regular contributor of events coverage and opinion to Bizcommunity.com. Email her at and follow her on Twitter at @terrylevin.View profile and articles...
its the truth
come on now. lets wake up-
i'll say this once more as i have said it to many brand managers who i do advertising for: online in Africa can never be a profitable source of revenue for their brand. 1. 70% of the population have no internet or have access to it 189 days in a year. 2. the "A" LSM also have access to the internet but they can now block advertisements and spam msg's and also the so called "A" market is the same market we advertised for in the 60's, 70's and the 80's and they are not that internet friendly as you might think.

so in conclusion, i say we wait for another 5 years, continue doing traditional offline marketing and we will all generate revenue because our communicability concerning our consumer would be far easy and reachable. lets stick to basics.

measurable, accessible, substantial, differentiable and actionable. thats all we need to do to and you will realize that our african market only need traditional marketing, until we reach a point where internet can be the main revenue driver. Posted on 19 Oct 2009 14:25
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Our clients disagree-
Our blue chip clients, who have traditionally spent millions on other mediums, who are now moving this budget into the digital arena .. would disagree with your.

Online not only shows return, but also proves it to. Posted on 19 Oct 2009 15:45
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yes, do wake up ... wasn't tv also "new" once?-
I wonder if advertisers felt the same way about TV when it only had a few million viewers.

And tell me ... what other medium provides the interaction that online does? Or the measurability?

By the time YOU "wake up", it'll be too late! Posted on 19 Oct 2009 17:22
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Adrian Hewlett
Why stay anonymous??-
Dear Anon

I am not sure you have fully indentified the objectives one would have for using the internet. Do you mean as a medium, to promote a brand? in which case i have many an argument to offer you.

If you mean as a platform to run a business, again there are many local examples...Kulula being a starting point.

My point is that you don't seem to have a clear objective which is the base of departure for any marketing drive.

But to make things more interesting, lets have lunch...if you can truly prove to me that we should all pack it in and abandon internent marketing then i'll buy you lunch. If i can get you to see things differently, lunch on you. Deal?

Drop me a line on 021 487 9100.

Adrian
OPA & Habari Group. Posted on 19 Oct 2009 20:58
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About that Lunch....-
I think since you are guaranteed a free lunch Adrian, you should book at the One & Only....or somewhere like that. Posted on 20 Oct 2009 17:26
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Terry Levin
HEY, IT'S THE TRUTH...-
...thanks for your input. No one is holding a gun to your head wrt to online marketing. Please click through to my blog article, which, based on all-of-one-day in a digital workshop, tries to give an idea about how online strategies may be integrated with traditional ones. Also it is apparent that all the stats and technospeak, do not guarantee breakthrough creative work online and that if anything, it is creative will not technical knowhow that is missing from the medium - all the more reason for traditional players to bring their skills to bear. The point I was trying to make in the article is simply that, as demonstrated by other countries, there are untapped revenue models for the internet and that there is surely no reason why we should not, at the very least, educate ourselves as to where our share of the online communications pie might be. Posted on 20 Oct 2009 22:31
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realist
lets wait another 5 years indeed-
your waiting 5 years will simply accelerate your demise. i sincerely hope that you have (at present) many clients that you do traditional advertising for - you will not notice them leaving with your head in the sand.
i would love to see things from your point of view but doubt that i could get my head that far up your arse.
rome is burning. Posted on 19 Oct 2009 15:23
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Alan Hammond
Anonymous has a conflict of interest-
I also wonder why anonymous won't identify themselves. Why are they so anti online marketing? Maybe it's because they are used to telling marketers to spend millions - and thereby generating big comms for themselves? So there's no incentive to encourage the advertisers to move to a cheaper medium - even if its more cost effective and better for the client! Maybe I'm wrong - but I can't be sure because anonymous won't identify themselves!

This argument about online not reaching a large enough segment of the population is a feeble excuse. How many campaigns art targeted at 100% of the population? I can't think of any. If you are targeting anyone who pays income tax then 100% of your target market are online. Posted on 19 Oct 2009 21:19
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Stijn Smoders, Habari Media
Give Anonymous his 5 years... Just hope his clients wake up before.-
No use trying to 'convince' people like this. He probably still prints out his emails too.

As dr. Edwin H. Friedman said:
'The colossal misunderstanding of our time is the assumption that insight will work with people who are unmotivated to change. Communication does not depend on syntax, or eloquence, or rhetoric, or articulation but on the emotional context in which the message is being heard. People can only hear you when they are moving toward you, and they are not likely to when your words are pursuing them. Even the choices words lose their power when they are used to overpower. Attitudes are the real figures of speech.'

Happy to join that lunch by the way. Let's find out his real motive,

Have a great day,
Stijn Smolders Posted on 20 Oct 2009 09:20
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Andrea Mitchell : digiVOX
Dear Mr Cynic (aka Anonymous)-
You, like everyone else, is of course entitled to your opinion. And I, being digital centric and therefore obviously biased, will be the first to admit that I am no expert on “the other side of the fence”. I am however curious to understand how you, along with those who share your opinion are managing to sustain reasonable margins. There is a decrease in all other mediums’ advertising spend, yet online is on the increase. eg Nielsen data indicates an total decrease of -0.25% in total ad spend across all mediums, yet online increased by 17% over the past 12 months. The only other mediums to show any increase over the same period, was TV (at 4,84%), and Direct Mail (at just over 6%). And this of course does not take into account all the online spend which whilst targeted at an SA audience, is being paid to off shore media owners (eg Google). As is evident, online ad spend is on a steady increase in SA. The same holds true for the audience, which has risen to 7,8 million in Sept ’09, from a previous average of 6,3 mil per month. And I haven't even got into mobile yet! With 80-90% of the SA population having access to a mobile phone, and an estimated 10 mil accessing the internet via cell phones, this is surely a channel that can't be ignored?

I do think that the numbers disprove your opinion that that brands should wait another 5 years.

And just for the record … if anyone blocks advertising (and very few do), the ad is not served, and thus not paid for. And as for spam .. the industry has come a long way in curbing this problem, and any ethical marketer or their agency will not partake in these unethical marketing practices.

On a final note .. there are many wonderful case studies available on how online marketing can provide great value in terms of relationship building and one-on-one interaction. I’m not suggesting for one second that you give up what you know best, but perhaps consider introducing online into the marketing mix as part of an overall campaign, to provide you with the benefits that other channels can’t?

There are many of us (such as myself and Adrian Hewlett who has invited himself into your wallet :), who would be more than happy to assist you with finding ways to ensure that online is of benefit to you, and your clients.

If your clients aren't yet expecting you to include digital into the marketing mix, I assure you, they will be, soon! Posted on 20 Oct 2009 16:21
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the truth hurts
its the truth and its my opinion-
i really appreciate your opinions too ladies and gentleman, but my debate was purely broad and i didn't have the space to put all my facts in here. so i agree to lunch with you as long as you promise to bring your clients to the meeting.

im not here to prove a point, but my company has managed to generate and measure leads without the use of 21st century technology.

Africans have a strong heritage and it all boils down to the spirit of Ubuntu and the right contact points. and why i chose to do business in Africa is because if people love your brand, they become loyal and they contact you. its not about being in their face, its about being in their hearts and their hearts are not yet friendly to online, they want tangible outcomes and want tangible communication.

but you - and all other online generation - still feel thats the only way. which is why my company and my clients would never do business with you.

im not anonymous because im scared, but im doing so to your companies because a client who reads this and gets my contacts, he/she will call me to hear my debate and if it gives them a good enough reason, which it will, they will come to me. Posted on 22 Oct 2009 09:24
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Online Race? or race for attention?-
I wonder how many of the people who express opinions here have actually ever participated in this "online race" - have you ever done a digital campaign (and I am not talking about designing a banner)? Is this not just another little band wagon to jump onto, in the race for attention and personal gain perhaps. Stop talking and get on with it, show us how you run this race! Posted on 13 Nov 2009 13:28
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