Digital advertising spend shows strong growth
Despite political uncertainty and a depressed economy, Internet advertising spend increased by 13% from 2015 to 2016, according to Interactive Advertising Bureau (IAB) SA’s latest “Internet Advertising Revenue Report”. In fact, Internet advertising spend is up significantly, from R1.3bn in 2013 to R3.95bn in 2016.
The report, produced by PwC on behalf of IAB SA, aims to provide the local digital and advertising industry with more accurate insight into digital spend by SA advertisers.
The big take-out: Digital advertising spend continues to show growth, according to the latest “Internet Advertising Revenue Report” from IAB SA.
The report says online and mobile spend is underpinned by a shift to mobile spend, with social media gaining the largest share. Mobile and online Internet advertising revenues combined increased fractionally by 1.8%, but search Internet advertising was up 20.6% from 2015, to total R2.8bn in 2016. According to the report, search remains the most popular digital advertising format, and an estimated 98% of this spend is channelled through Google. Paid search Internet advertising rose 19% compared with 2015.
Display was the second-most popular digital advertising format. Animated images accounted for 41% of display ads, followed by video (20%) and flash (17%), while static images made up 15% of digital display advertising. Images can be rolled out across both mobile and desktop sites without limitation, the report pointed out, making them a straightforward method of advertising that doesn’t intrude on the user experience to the same extent as video. Textual or video ads involving speech, on the other hand, could alienate some communities. “Images, however, are universal, and thus allow for engagement across diverse groups,” said the report.
The biggest digital spender for 2016, according to the report, was the automotive industry, with 18% of digital adspend. In an attempt to counter declining car sales in 2016, the local automotive industry promoted discounts and special offers to provide incentives for sales, thus boosting digital advertising spend during this period. Automotive spend was followed by retail, financial services and the fast-moving consumer goods sector. E-commerce accounted for 11% of net digital advertising, overtaking classifieds.
According to the report, an increase in mobile users will drive digital transactions and mobile advertising revenues.