Expect to see trends that have already become evident in the US and Europe to gain traction in the local market as South Africa's online marketing world continues to mature.
The South African online advertising industry has enjoyed strong growth over the past year, and can expand further as more South African organisations start to switch on to the benefits the online medium offers. The five trends below, which are already evident in other parts of the world, are likely to drive the growth of the local online advertising world by making the medium even more accountable, measurable, and functional.
1. Cost Per Acquisition (CPA) models to gain favour
Local web publishers have, to date, resisted the call to offer CPA models for advertising sales on their Web sites, preferring to stick to selling their space using the traditional cost per thousand impressions (CPM).
Online publishers fear that the CPA model can not be profitable in a market as small as South Africa, which has only around four million Internet users. However, I believe that the CPA model will help publishers to grow their sales because of the advantages it offers both publishers and advertisers alike.
The CPA model takes the measurability and accountability of online advertising to a new level by empowering the advertiser to measure the success of its campaigns using conversions as a benchmark. These statistics allow advertisers to cap the maximum cost they are willing to pay for a conversion (the allowable) based on previous online campaign response rates and business requirements.
This model also allows the publishers the flexibility of testing environments to see which drive the most conversions and manage inventory accordingly.
Of course, CPA is not the appropriate model for every brand, and brands without an online marketing history may initially find it more beneficial to stick to the CPM model for their campaigns, or to negotiate a hybrid CPM/CPA campaign. Nonetheless, it is important for publishers to start offering CPA options among their mix of advertising services to offer an even stronger value proposition to advertisers.
2. The rise of rich media
As penetration of broadband connectivity into the South African market continues and local sites become more cluttered by ads, local advertisers can be expected to increasingly turn towards rich media advertising in a bid to rise above the noise.
Ads no longer need to be simple click-through banners: they can be rich and interactive experiences that contain video, games and audio. Not only do they grab the consumer's attention, but they also allow advertisers to track the way that users are interacting with their ads. Rich media is already popular in most countries with high broadband penetration.
Bandwidth targeting solutions allow advertisers to target users based on their connection speed, which means that advertisers can serve rich media ads to broadband users while directing lighter ads to dial-up users. That means advertisers can take advantage of the benefits of rich media without alienating the dial-up users who are likely to form a substantial proportion of the local Internet user base for some time to come.
3. Standardisation of ad sizes
The Online Publishers Association (OPA) is involved in talks with stakeholders in the South African online marketing environment that will hopefully result in the standardisation of ad sizes across the country's online publications. This development will be a welcome one for advertisers and agencies since they have had to incur the extra costs and effort of tailoring their ads to meet the specifications of different outlets. This can be a very expensive exercise and removes the focus from the creative element. By standardising ad sizes, we can put South Africa's online industry on the global map of standards.
4. Search marketing to take off
Search engine marketing is the fastest-growing form of online advertising in the world, but it has not taken off in South Africa as yet. This picture is likely to change in months to come as advertisers start to understand the benefits that search marketing offers.
Search marketing serves ads to visitors who are already looking for a product or service, which means that they are more likely to act on the search result. Search marketing is flexible enough to allow the advertiser to change key-words and campaigns on the fly, depending on conversions, business needs and response from the audience.
South African advertisers can chose CPM models on local search engines such as Ananzi or Aardvark, or on a CPC (Cost per Click) model on local search engines such as Funnel and international heavyweights such as Google for their search campaigns. Not only do international search engines such as Google offer geo-targeting that allows local advertisers to reach South African users only (or any territory in the world), they also offer self-service tools that make it easy and convenient for advertisers to create and optimise their campaigns. South African advertisers are likely to ear-mark more of their budgets for this powerful form of advertising in the months to come.
5. Globalisation of South African Internet to gain momentum
The Internet has created an online world that pays scant attention to the borders that exist in the real world. In practical terms, this means that South African advertisers are starting to understand that they can reach their South African customers on American and European Web sites, and not only on local ones.
By working with international publishers and agencies who offer geo-targeting, South African advertisers can geo-target local users on global web sites. On the flipside, local sites are beginning to realise that they can also capitalise on international traffic by selling ads and products geo-targeted to an international audience. Companies can no longer afford to be parochial when they draw up their online advertising strategies.