Digital Content

Local online advertising revenue is expected to reach R183m in 2006, and to pass the R200m mark in 2007, according to a survey from World Wide Worx.

“Online Media in South Africa 2005”, a study conducted with the co-operation of the Online Publishers Association (OPA), which represents the country's 25 major online publishers, reveals an industry that is quickly shaking off the slump of the early 2000s.

It took the online publishing industry nine years, from 1994 to 2003, to grow to the R60m revenue mark, yet it is set to treble that amount in the subsequent three years.

“It is looking very positive for online advertising – a medium that has finally come of age,” says Arthur Goldstuck, MD of World Wide Worx.

“But this phenomenal growth masks the fact that the numbers would be far higher if the advertising industry woke up to the potential of the medium.”

The study found that lack of awareness within the traditional advertising industry of the efficiency, measurability and reach of online advertising has held back the growth of the medium.

By the same token, it underlined the potential of the medium should advertisers and agencies become better educated about online advertising.

Shirley Singer of Insights Research, which collaborated with World Wide Worx on the research project, noted that 2004 was the first breakeven year for the industry, after an overall loss of R18m for 2003.

“The industry only moved into clear profitability in 2006,” says Singer. “The conclusion is that companies need to invest time, money and patience in developing their online presence.”

As in SA, the growth of online advertising revenue in the world's largest media market, the USA, resumed an upward path in 2003, after falling dramatically in 2000.

“Ironically, online advertising is one arena of online activity in which SA has seen more substantial percentage growth than the USA over the past four years, and where the growth rate for 2006 is similar to that in the USA,” says Goldstuck.

OPA chairperson, Russell Hanly, agrees: “The local online advertising industry is growing rapidly and can now claim itself to be tracking global growth trends.

"We believe that online advertising is now a strong creative platform that offers real connections with consumers whilst being highly measurable and data-driven.”