SA marketers are falling behind the digital curve


South African marketers risk falling behind global trends as well as the needs of their customers unless they start investing more aggressively in online marketing and advertising.

That’s according to Craig Corte, CEO of Kagiso New Media. He says that most South African companies are underinvesting in online advertising considering the growing size and reach of the Internet across the country’s population.

According to Zenith Optimedia, an average 14.4% of global ad spending goes to the Internet and the proportion grows every year. South African marketers, by contrast, earmark just 2.5% of their ad budgets for online media.

This is a meagre amount of spending considering that the country has 3.7 million broadband subscribers, according to research from PwC Southern Africa. By 2015, PwC expects South Africa to have more than 22 million broadband subscribers, of which 17.5 million will be using mobile technologies to access the Web.

“We are not investing enough in online advertising compared to our peers in most other parts of the world, given the rapid growth we are seeing in this space,” says Corte. “Even though South Africa is an emerging market, there is already a substantial middle class market to be addressed online.”

Corte says that CMO’s face an increasingly complex advertising landscape and a timid approach to Internet advertising means that many South African businesses are not developing the skills they will need to cater for a market that is rapidly moving to digital platforms.

Not only do they risk, and in some cases have become, uncompetitive on the global stage, but they may also be left behind by consumers who are using the fixed-line and mobile Internet to do more and more with every month that passes.

“The Internet today has become a big part of the average middle-class consumer’s life,” says Corte. “Consumers are not just reading the news and doing their banking on the Internet, but are also increasingly consuming richer media such as video online.”

“Against this backdrop, there is an opportunity for early movers in the online space to dominate the Internet advertising world and position their brands very strongly for the future,” adds Corte.

Companies will be able to build up a significant presence for a relatively low investment, as well as learn lessons about how the online space operates, that will be extremely valuable in an increasingly connected future. Nearly half of all display marketing in the US is now directed towards pure branding objectives with little or no consideration to actual click metrics says Corte.

“Today, the Internet is not just a direct response medium,” he says. “It is a brand-building medium every bit as powerful as traditional media such as print and broadcast. South African advertisers should see it in this light.”

Concludes Corte: “Online advertising offers a number of benefits that should make it irresistible to South African advertisers. It’s engaging, measurable and has a significant reach into their customer bases. Advertisers should start ramping up their online spending as a proportion of total ad spend, to bring it closer to international norms.”

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