Digital marketing is being touted as showing incredible growth in South Africa. The Annual IAB SA Internet Advertising Revenue Report, compiled by PricewaterhouseCoopers, showed a 15% growth in online advertising revenue from 2013 to 2014.
Of course, the massive growth shown in recent years and predicted for years to come can be attributed to the fact that it's coming off a very low base. So, while digital is certainly on an extreme upward trajectory, it will take a while before it starts to beat its marketing counterparts - including television, radio and newspaper advertising.
The developed world is far ahead of South Africa in its adoption of digital. In the UK, digital ad spend outstripped television in 2010, but in South Africa, in 2014, digital ad spend was at R133 million, while television still stood at R19 billion. South Africa has been slower on the uptake, largely because of low penetration of internet devices and the high costs of bandwidth.
Nonetheless, these obstacles are being overcome and growth is being achieved. We spoke to three executives about the current state of play in digital marketing, and where they predict it's going to go in the next few years.
Massive growth
"I think we're in the early stages of exponential growth - it's going to explode," says Gil Sperling, CTO of Popimedia. "Our business is doubling or tripling each year, and clients are spending more and more. We have some who were spending R50 000 per month with us and now they are up to R2 million."
He projects that digital marketing will begin to outstrip traditional in the next couple of years. Until now, he says a lack of infrastructure has stymied widespread adoption of digital technologies and, therefore, rollout of digital marketing campaigns.
However, he believes that the classic story of Africa leapfrogging the desktop and embracing smart phone technology means that the capacity to engage with digital has expanded. "Most of the population is on feature phones with very basic connections. Their engagement isn't deep. Brands don't want to invest when immersion is so limited."
However, that's all set to change. "In the next two years, 80% of feature phone users will migrate to smartphones. The costs are coming down, and this will make it a far more attractive area to play in," he says. He also thinks South Africans are, generally speaking, quite orthodox and it's been hard to convince them to move away from traditional media.
Already into digital
Nonetheless, he says for brands looking for digital solutions for low-tech users, Facebook has launched an initiative called internet.org, which provides free access to certain content to break down the cost barriers for feature phone users. And m.facebook.com is a basic app that gives users with limited bandwidth access to the social networking site. At the same time, while video is a very expensive technology, slide shows can be developed to deliver a visual experience to users.
As individuals' business and social boundaries continue to blur, it will become increasingly important for marketers to reach potential customers in a relevant and meaningful manner.
Themba Gumbi, Business Connexion
Over the next five to ten years, he predicts that virtual reality and augmented reality are going to become 'massive'.
"Right now, we're limited to photos and videos, but this will be on another level. You'll be able to stick on a pair of glasses and go skydiving in the Himalayas. You'll be able to interact with other people in another country in real-time. If you go shopping, you'll be able to view videos about products on the shelf, or get pointers to show you which ones your friends bought. Or you'll be able to have real-time consultations with specialist doctors on the other side of the world."
He believes that within the next five to ten years, slow internet will be a thing of the past in South Africa, and this means everything is about to change.
While it's clear that not all companies and brands have moved across to digital predominantly yet, some have certainly embraced the platform along with all that it has to offer.
"We don't agree that South Africa lags behind the rest of the world in the adoption of and confidence in digital platforms for marketing," says Themba Gumbi, chief sales and marketing officer at Business Connexion. "In fact, at Business Connexion, we have focused a larger percentage of our marketing spend on digital platforms as we believe, particularly in a B2B environment, that it's a lot more targeted and your ROI is not only greater, but more measurable."
However, like Sperling, he believes that the only way forward is up. "Digital will continue to grow and will become more personalised and even more targeted to people's lifestyles and needs. We will also see an increase in video as a digital communications tool."
He also thinks social integration will continue to play an extremely important role. "As individuals' business and social boundaries continue to blur, it will become increasingly important for marketers to reach potential customers in a relevant and meaningful manner."
Digital innovation
Mike Saunders, CEO of DigitLab, believes the widely lauded growth in digital has come at some cost to the quality and depth of the marketing offerings available out there. "I think it's grown almost too quickly and the only scalable aspects that could keep up with that growth have been advertising engines."
Because of this, he says the challenge that digital marketers are facing is that the medium has lost the essence of what it can really represent. "It's difficult to do and involves strategy and thought and time in an industry that's demanding a very high pace."
When asked what brands he believes are doing it right, he mentions one that is not one of his own clients for a more objective view. "Discovery has tapped into big data and used digital mechanisms to create a new product with Discovery Health ID. It has shifted ahead of the entire industry and put itself in a position that makes it difficult for anyone to compete."
He says Discovery's partnership with wearable product vendors is another way that they are reshaping their competitive edge.
Right now, the one thing that's holding digital back is a lack of consumer readiness. "There are new technologies every day, but they aren't in everyone's world. There's beautiful technology at our disposal, we just have to educate consumers so we can start using it."
He believes this will be supported, to a large extent, by awards like the Loeries, the Assegais and the Bookmarks, which encourage innovation and creativity in the digital industry.
Areas to watch are beacon technologies, allowing brands to market to individuals based on their very specific locations, and progressive web technology that allows smartphones to download apps through Chrome or Safari, without needing to go through an app store. "This will allow development without the barriers of having to get into an app store."
All three executives agree that digital is taking off and set to continue on its trajectory. The next five to ten years will unlock capabilities that marketers have only dreamed of - but they need to ensure that their target audiences are ready to embrace these new technologies. It's going to be a fascinating ride.
This article was first published in the July 2016 edition of ITWeb Brainstorm magazine. To read more, go to the Brainstorm website.
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