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Global advertising spend is set to grow by close to 13% this year, but the picture for SA and Africa is not as bullish, with an expected improvement of about 9.7% in 2021.
New research from the World Advertising Research Council shows that as the global economy begins to rebound after Covid, growth of 8.2% is forecast for 2022, when the global advertising market will be worth more than $700bn. A 7.3% increase in spend in 2022 is forecast for this country and the rest of the continent.
According to AC Nielsen and the Interactive Advertising Bureau, total adspend for SA in 2020 was just over R41bn, based on rate card values. This represents a 7% decline on the previous year due to the pandemic and lockdown interruptions.
Muhle Hlabano, business unit manager at The MediaShop, says: "The top-spending advertiser has now changed, with Unilever taking over from Shoprite which has been dominant in previous years. This shows the resilience of the FMCG [fast-moving consumer goods] category during the lockdowns."
The question becomes whether we will see this carry over to 2022 and onwards or if we’ll experience more dramatic shifts in adspend patterns across media platforms.
Media strategist Gordon Muller, who runs the GSM Quadrant consultancy, tells the FM: "In the Mark Twainian sense, reports of the death of advertising in 2020 might have been exaggerated, but the post-Covid prognosis remains uncertain. As always, though, recovery is not evenly distributed across the total media sector. Traditional, or legacy, media will, for the first time in a decade, see two consecutive years of growth budgets continue to move steadily online."
Muller says global online adspend rose by 27.7% during the first six months of 2021, and more than 60% of adspend is expected to be on digital media in 2022. This is an increase in share from 50% in 2019, before the pandemic. Muller says in terms of legacy media, out-of-home shows the most resilience relative to online media and is projected to grow 11.2% in 2022. Radio’s adspend bounced back (+10.4%) but is projected to flatline in 2022, while newspapers (+4.8%) and magazines (+2.5%) continue their relative decline into advertising obscurity in 2022.
"Renewed interest from advertisers in television means the platform continues to fight for a share of advertising dollars."
Year on year, television has experienced some growth (7.1%), but it is rapidly losing market share to online video, which has had growth of 17.7%.
Muller says he is concerned about the adspend lag effect in SA and on the continent. The seemingly endless pandemic and endemic public violence will have done little to motivate in favour of increased advertising budgets in the local market.
He says: "In SA, media owners are not so much fighting for a share of the advertising spoils as they are fighting over a diminishing supply of advertising oxygen."
A senior marketing director in the retail space tells the FM: "With the country finally starting to vaccinate, we were tentatively looking at starting to increase our adspend, mainly online and in print and radio. But with the public violence we have witnessed, I am shutting that process down for the moment.
"Corporate priority right now is staff and premises safety and managing supply chains. Frankly, few of us, I imagine, have time to worry about advertising in the very short term. The crisis has set us back months."
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.