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SA mobile adspend 'to double by 2012'

27 May 2011

Spending on mobile marketing and advertising in South Africa totalled approximately R500-million in 2010, and Vodacom, Mxit and Google predict that it will double to R1-billion by 2012, based on current growth trends.

Estimates on mobile ad spend include display, search and message-based ads.

According to Vodacom Mobile Media head Jason Probert, previous estimates have dramatically under-estimated the size of the mobile advertising industry as they only focused on reports submitted to the Digital Media and Marketing Association by online publishers.

"When you take into account the entire mobile advertising ecosystem and include mobile ad networks like AdMob, operator services like Apple, mobile search and social networks like MXit, the picture is dramatically different," Probert said in a statement this week.

Juan du Toit, head of international business development and marketing for MXit, believes that South Africa will see substantial growth in media performance on mobile platforms this year and in 2012.

"The way that consumers interact with brands is evolving rapidly," Du Toit said. "Media strategists know that mobile media campaigns deepen the engagement and relevance of brands within their target markets."

Global mobile advertising

Global mobile advertising spend is expected to grow over 50% annually, from $12.6-billion in 2011 to $41.8-billion by 2015. Display advertising is the biggest format making up $6.8-billion, followed by mobile search with $3-billion and in-app advertising with $2.2-billion. The remaining spend is made up of messaging, streaming music, mobile TV and mobile video.

In South Africa, mobile messaging ads lead the way, followed by display and in-app formats. 35-million branded Please Call Me messages are sent out daily and 1.6-billion impressions served annually in South Africa. The typical global mobile browsing session involve five to eight mobile websites.

In countries like South Africa and BRIC countries – Brazil, Russia, India and China – mobile is considered the primary screen, as opposed to in the US and Western Europe, where it is viewed as merely an extension of the web. In China, the growth rate for mobile ads is more than double that of the United States.

"In emerging markets, mobile is the primary means to the internet," Vodacom, Mxit and Google said in their joint statement. "This, together with cheaper data rates and more affordable smart phones, is considered to be the main driving force of its phenomenal growth in South Africa.

"The country's low internet connectivity penetration (10%) and high broadband costs will further drive consumers to mobile."

Mobile social networking

Globally, spend on social networks is expected to increase with 71.6% to $5.97-billion, approximately 8.7% of the total predicted online spend in 2011. According to eMarketer's predictions, mobile advertising is growing faster than social media advertising.

MXit is perhaps the best testament to the growth potential and interest in the South African mobile media space. It has more than tripled its user base to close on 37-million users in the last two years, and has a bigger reach than any other social network in Southern Africa, including Facebook and Twitter.

MXit, which started as an instant messaging platform in 2006, has since evolved into a fully-integrated mobile social platform that offers a spread of features, tools and social portals.

Surpassing other media

Global research shows that one-way media advertising like print and radio are in steep decline. Print advertising is expected to drop by 6% to $21.4-billion by the end of 2011.

"If growth rates continue like they are now, global digital ad spend will completely overtake television spend in the not too distant future," the statement reads. "In 2010, US online advertising ($26-billion) already surpassed spend on newspapers ($22.8-billion) and radio ($15.3-billion)."

Mobile growth trends

Vodacom, Mxit and Google are to host the Mobile Media Mindblast 2011 conference at the Bay Hotel at Camps Bay in Cape Town on 3 June.

Renowned international speaker Joseph Jaffe will explore the aggressive mobile growth trends and focus on what this means for brands and marketers in the South African marketing context.

In addition, speakers will provide guidance on how brands and marketers can harness this growth and shed light on successful mobile marketing tactics to reach the target audience.

Topics will include the latest on mobile social networking, the advantages of permission-based mobile messaging and the benefits of marketing through local search.

"We've had a fantastic response since we announced the conference a few weeks back and we're almost booked to capacity from both the brands and agency sides," said Google Mobile head Brett St Claire. "The popularity of Mobile Media Mindblast is a testament that marketers feel that they can no longer ignore mobile's aggressive growth and that they need to learn more about this space."

SAinfo reporter