Advertising approaches a tipping point
The Soccer World Cup that takes place in Russia in June and July this year is likely to provide a much needed fillip for advertising spend across Africa.
Dawn Rowlands, CEO of the Dentsu Aegis Network (sub-Saharan Africa) says, however, that due to a limited number of African teams participating in the tournament and a mostly flat continental economy, investment will be down on previous tournaments.
She believes more adspend than ever before will be directed towards mobile platforms, while online football gaming will increase in markets where online gaming is tax efficient.
The World Cup is also likely to prompt an increase in spend from brands that are tournament sponsors in the drinks, travel and financial services categories.
Many clients are increasing investment in Africa outside SA and they expect larger returns there for the next five years.Dawn Rowlands, CEO of the Dentsu Aegis Network (
Regarding overall media activity in SA, Rowlands says: "We should expect to see another tough year as investors ride out the uncertain political and economic environment.
"Many clients are increasing investment in Africa outside SA and they expect larger returns there for the next five years."
"We have already seen the mobile operators pull back on investment in the past two years, and this is set to continue as margins decline and new data and content options are available," she adds. "We have noted a huge decline in investment in this category across Africa."
The fast-moving consumer goods category is expected to have a tough time as well, as most brands look at lower volumes and smaller margins. In this tough operating climate local media agencies will have to be tenacious in their approach.
Rowlands believes the Dentsu Aegis Network has laid a solid foundation. "Our Vizeum brand in SA had a phenomenal 2017, with new business wins resulting in 22% growth in revenue and market share growing by 18%. Stablemate Carat SA also experienced a solid 2017.
"Like many other media networks around the world, service-offering lines are starting to blur as agencies compete to offer a full turnkey service to clients.
"Creative services represent only 15% of our revenue at present, making this environment an ideal space to grow our business regionally."
Adspend in emerging markets is expected to continue to outpace developed economies
In a global media forecast report, Dentsu believes global adspend growth will be 4.3% in 2018. Adspend in emerging markets is expected to continue to outpace developed economies.
Dentsu believes mobile and digital spend will become "the new default settings".
Jerry Buhlmann, CEO of Dentsu Aegis Network, says: "We are reaching a tipping point in adspend as digital overtakes television, mobile overtakes desktop and paid search overtakes print. Digital and data must now be the default settings for advertisers."
The challenge for brands, he goes on, is to "ensure they are ready to embrace the potential of innovation. As technologies such as virtual reality and voice activation become more prominent, brands must ensure they remain relevant by creating new value for their consumers."