By Paula Hulley, Online Revenue Report Project Lead, IAB South Africa Research & Measurement Council and Managing Director at Digitas Liquorice
Digital advertising has become indispensable for brands and businesses of all sizes. Post-pandemic, more consumers than ever before are digitally connected. In fact, Meltwater’s Global Digital Report ranks South Africa as number one globally for time spent using the internet — at nine hours and 24 minutes — with the majority of that time spent on social media platforms. Given this, businesses have found more reasons to invest in digital advertising — from targeted reach and measurable results to engaging formats and cost-effectiveness. And as businesses continue to recognise the power of online channels to connect with consumers, the investment in digital advertising continues to soar. The latest IAB South Africa Internet Advertising Revenue Report (‘Online AdSpend Report’) is evidence of the continued growth and maturity of the digital advertising landscape in South Africa, showing a remarkable 21.5% year-on-year (YoY) growth from 2022, reaching a new high of 39.8% of the overall advertising market. This is a significant increase from 36% in 2022 and 34% in 2021.
By tracking the growth and evolution of revenue generated by digital advertising, industry stakeholders can gain a better understanding of the market dynamics and make informed decisions about their future strategies. Data guides effective digital marketing strategies, helping optimise investments, while emerging trends present opportunities for monetisation. As the Online AdSpend Report reveals, digital ad spend has experienced double-digit growth over the past couple of years, reflecting a shift in consumer behaviour towards online channels. The growth of online retail in South Africa has further created new avenues for advertisers as retailers leverage their platforms to reach consumers at various stages of the buying journey. Checkers’ omni-channel strategy, for example, shows how the retailer’s offers remain consistent across their online and physical channels while it capitalises on its brick-and-mortar spaces by increasing opportunities for brands to advertise.
While paid search remains a primary driver of digital ad spend, accounting for 73.3% or R12.99-billion of the total digital ad spend in 2023, social media should not be dismissed. Platforms such as Instagram, Facebook and TikTok have become crucial components of the digital advertising landscape, with social media marketplaces the next step in the evolution of social advertising. As the digital landscape continues to evolve, monitoring trends such as these will be essential for staying ahead of the curve. Consultancy Kepios indicates an increase in South African social media users — from 25.8 million in 2023 to 26 million at the start of 2024 — while research firm GWI reports that 78% of South Africans use social media to research brands and products. This correlates with the Report’s findings that social media has become a key contributor to the overall internet advertising market as Meta (Facebook and Instagram) accounts for 75.4% of paid social revenue in 2023, up from 71.1% in 2022, while TikTok saw a 47.7% YoY growth and X (formerly Twitter) decreased from 16.9% to 10.1%.