Paula Hulley, IAB South Africa Advertising's Revenue Report Lead, Research and Measurement Council and Managing Director at Digitas Liquorice, says the 2024 report confirms the significant expansion of online advertising as forecasted in 2023's report.

"While we have witnessed how the digital ecosystem has become a lot more creative, driving performance and connecting with audiences to build trust, the power of generative artificial intelligence (AI), retail media and social communities continue to provide opportunities for marketers and business growth alike," adds Hulley. 

"If the digital environment can remain focussed on key areas of excellence, then we are most likely to see sustainable growth and greater allocation of advertising investment in the years to come," Hulley says. 

Digital Growth Continues as Technology Advances 

While accelerated growth experienced in digital advertising post-pandemic stabilised in 2022, the 2024 report shows a 21.5% year-on-year (YoY) growth — more than double that of the previous year. 

Revenue during the same period increased to R17.7-billion, up from R14.5-billion in 2022. These growth levels are more reflective of the growth expected in the future. This year also saw an upward growth for Internet advertising, which now accounts for 39.8% of the overall advertising market in 2023, up from 36.1% in the previous year. Paid search revenue also increased from R11.14-billion in 2022 to R12.99-billion for the 2023 fiscal year, according to the report. 

"As businesses increasingly embrace digital channels to connect with their audiences, we are witnessing a significant shift in the advertising landscape. This report underscores this trend, highlighting the substantial growth in online ad spend and the increasing importance of digital strategies for businesses," says Clare Trafankowska, Chair of the Research and Measurement Council and Head of Digital Media and Marketing at FNB.

"To cement IAB South Africa's commitment to creating progression and innovation in the industry, the council has also identified four key trends that will continue to affect internet advertising spend in the foreseeable future," adds Trafankowska.

The four key trends cover the impacts of AI, the customisation of ad campaigns, a new way of leveraging social media and the introduction of retailers as advertisers: 

The Impact of AI on Digital Advertising

AI has become an essential tool for brands and marketers, helping to automate tasks like budget optimisation to generating personalised content and optimising ad campaigns. Major brands such as Audi, Takealot and Nando's are already leveraging AI to improve their advertising strategies, with Takealot offering personalised product recommendations and Nando's monitoring social media sentiment and conversations to create relevant, targeted content.

The benefits of AI are significant, however, responsible use and ethical considerations remain crucial. As AI continues to evolve, the South African government and industry stakeholders are working to establish guidelines and regulations to ensure the beneficial and ethical application of AI within digital advertising, according to the report.

The Importance of Targeting and Personalisation

Third-party cookie deprecation (i.e. the phasing out of third-party cookies) still looms, which has led to companies relying on AI to analyse user data to create highly targeted campaigns.

This shift is driven by the need to effectively reach audiences without relying on traditional tracking methods. AI offers powerful capabilities, such as using dynamic creative to ensure ads are served at the right time with the right message to the right consumer, but privacy concerns and ethical use of data remain paramount, meaning opt-in and opt-out visibility will continue to play a key role, says the report.

The Influence of Social Media Communities

Social media communities have become powerful platforms for brands to connect with consumers and drive engagement. These spaces allow participants with comfort, connection and a place to engage with their interests and like-minded individuals.

By participating in these communities, brands can leverage authentic word-of-mouth marketing, build customer loyalty and increase sales. A defining element that will ensure a strong brand presence is the authenticity of the brand content and the value offered to community members in exchange for engagement, which will be essential to avoid negative online sentiment and discussions, the report adds. 

The Rise of Retailers as Advertising Platforms

The growing popularity of online shopping has transformed the digital advertising landscape, according to the report. Retailers are now using their platforms to reach consumers in new, unexpected ways.

Brands can adapt to this trend by offering convenient features such as same-day shipping, personalised recommendations and loyalty programmes. E-commerce platforms like Amazon and Takealot offer significant opportunities as well; however, retailers must focus on building their first-party data and providing seamless omnichannel experiences.

Checkers's omnichannel strategy is a great example, with their offers remaining consistent across their online and physical channels, while the retailer has also capitalised on its brick-and-mortar spaces to increase advertising opportunities.

Additionally, the growth of township e-commerce and social media marketplaces, where customers can generate income through buying and selling online, highlights the evolving nature of retail media in South Africa, the reports says. 

"The trends identified by the Research and Measurement Council are key to understanding the evolution of the consumer and run parallel to IAB South Africa's objective of servicing the 2030 customer," says Razia Pillay, CEO of IAB South Africa.

"Keeping these conversations top of mind is imperative and this report remains a key component of IAB South Africa's mission to provide the digital media and marketing industry with essential insights that support strategic growth and development," adds Pillay. 

Participants of the 2023 report can access the full report by contacting debbie@iabsa.net.

For more information, visit www.iabsa.net. You can also follow the IAB SA on Facebook, or on X. 

*Image courtesy of contributor