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SA’s first-ever internet advertising revenue report released by IAB SA and PwC

The South African internet advertising market is growing at breakneck speed, with R1.3 billion in total revenues reported in 2013. This is according to an inaugural Internet Advertising Revenue Report which was prepared by PwC SA and released today by the Interactive Advertising Bureau (IAB) South Africa. The report is a landmark for the maturing South African digital industry, which has a growing need for reliable market intelligence in order to position itself as globally competitive.

The report highlights the following findings:

•Online advertising revenues excluding search and mobile amounted to R452 million in 2013.
•Search dominance of internet advertising was proven as it accounts for 52 percent of the total internet advertising revenue. In line with the rest of the world, Google dominates the South African search market.
•As a result of the rapidly rising mobile and smartphone penetration in South Africa, mobile internet advertising revenues amounted to R172 million in 2013. Mobile remains the smallest medium within digital advertising.

Growth in the industry is being fuelled by a variety of factors. These include:

•Growing internet penetration
•Declining broadband prices
•Faster broadband
•Increased consumption
•The rise of targeted advertising as a preferred advertising medium

‘We’re delighted to release the Inaugural IAB South Africa internet advertising revenue report for the year ended 31 December 2013 which was conducted by PwC and sponsored by the IAB SA,’ said Gustav Goosen, the IAB’s Head of Research Council. ‘From the outset, our objectives were to afford the South African digital industry and the advertising markets with precise and comprehensive insights into Internet advertising spend, while ensuring uncompromised confidentiality throughout the entire process. We have succeeded at both.’

Goosen acknowledged that the SA research team experienced the typical challenges associated with inaugural studies. Other IAB member countries faced similar ‘teething’ issues but have gone on to annually conduct this study with PwC in their territories for a number of years now. He continued, ‘We believe that the initial outcome of the study is what the industry wants to see, it will become easier for more industry players, both sell-side and buy-side, to participate and submit the required data to PwC for the second reporting period ending 31 December 2014. The IAB SA will be working with PwC in the coming weeks to launch the submissions phase of the second annual study, and we look forward to seeing an extended list of contributors working with PwC.’

The study has two overarching long-term goals. The first is to increase the frequency of the report as soon as practically feasible. Goosen said, ‘We’re an immediate medium and we need to strive to have this type of industry data available more frequently than on an annual basis. Secondly, IAB SA wants to contribute SA data into the IAB’s global data set to ensure the SA market insights reach a world audience. This would ensure our market is adequately represented and reflected on a global stage,’ added Goosen.

The results are considered the most accurate measurement of interactive advertising revenues because the data is compiled directly from information supplied by companies selling advertisements on the Internet. This to date is the most respected study conducted worldwide.

‘Internet advertising is maturing as a medium,’ said Vicki Myburgh, Entertainment and Media Leader, PwC Southern Africa. ‘This is a growing category owing to on-going movement of ad spend into all three core categories, display, search and classifieds.’

All revenues included in the report are recorded on a net basis, and therefore exclude rate card discounts and agency commissions. Information is prepared according to survey responses received from the participants. Figures are based on the information submitted and have not been verified. Search revenues were obtained from the PwC Entertainment and Media Outlook: 2014 – 2018, South Africa – Nigeria – Kenya survey. Both publishers and agencies have participated in the survey. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information. Only aggregate results are published and individual company information is held in strict confidence by PwC.

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