Digital media remains a big driver of growth in global advertising and is likely to capture 33% of the global advertising pie in 2017. This is according to a forecast by GroupM, the world's largest advertising buyer. TV continues to attract the largest share of ad spend, although this will decrease slightly from 42% in 2016 to 41% in 2017. “Digital keeps surprising us,” says Adam Smith, a senior GroupM executive. “What's surprising is [that] the bigger the appetite for digital is, the bigger it gets.” He believes that digital’s growth is being driven by big increases in paid search, e-commerce and advertising on mobile devices. “If you look at the growth trajectory of digital, if it carries on taking a point or two of share from other media. Is TV threatened and, if so, what can we do about it?” asks Smith. He says more data and technology should be introduced to support TV marketing – including creating addressable ads that allow marketers to target consumers by household. Many TV executives in the US have argued that momentum is swinging back towards television as marketers become more wary of digital advertising problems such as click fraud. However, it appears that this may not be the case. Total advertising spend worldwide for 2017 is predicted to be US$547-billion, an increase of 4,4% on 2016, notes GroupM. The US and China will be responsible for half of the net growth next year. Emerging market India continues to be one of the fastest growing countries in the world when it comes to ad spend, with the country's ad growth forecast to be almost 13,8% this year and 12,5% for 2017.
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Wednesday, 17 August 2016 09:29

Global marketers lacking in digital skills

Today’s marketers do not have all the skills they need to operate in a digital world – and the gaps and shortfalls are bigger than companies think. The warning comes from the international Boston Consulting Group, which says many organisations have failed to realise that modern marketing is, in many instances, a technology-driven enterprise. Boston believes the signs for the future are even more troubling, as marketers seem focused on catching up on yesterday’s needs rather than embedding into their organisations the capabilities and expertise that will be required tomorrow. Referring to a 2015 study of 1 100 marketers in 57 European businesses – which found there was below-par capability in areas such as customer data, mobile advertising and video-based marketing – the researchers note that this is despite almost 30% of global advertising spending in 2016 likely to be on digital strategies. “So far, marketers have managed this lack of skills the old-fashioned way; by outsourcing campaign development and execution to their agencies, just as they have long outsourced creative development and media buying,” Boston says. “But digital campaigns are different. They are continually modified and adjusted in real time based on real-time results. Marketers [who] are not actively involved in the ‘test-learn-adapt’ process soon lose touch with both their campaigns and their digital consumers. They don’t know whether their strategies are being faithfully executed or how their budgets are being spent. And they are hard-pressed to explain how or why success, or failure, occurred.” To address this, the researchers believe that marketing departments must nurture talent with expertise in areas such as programmatic buying, branded content, using big data to better understand consumers, marketing-effectiveness analytics, marketing innovation and agency management. Organisations that aren’t able to build these capabilities will fall behind their competitors, they warn.
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The World Federation of Advertisers (WFA) has called for global action from brands, marketers and the advertising community to tackle the growing problem of digital ad blocking. WFA believes the industry as a whole must listen to what consumers are saying and take action. “Advertising has always been cultural wallpaper and we have a duty to make it as attractive and engaging as possible, so that people enjoy it [and don't] want to shut it out,” says association President David Wheldon in a media statement issued in early June. In calling for the industry to take action, the WFA envisages a three-point process involving the creation of international standards for digital advertising, allowing consumers to establish clear preferences for the advertising they are willing to see, and then regularly monitoring their responses. Efforts are now underway to determine the type of online advertising that consumers will no longer accept. “The findings will differ by demographics and geographies, although there are likely to be some commonalities in terms of what triggers people to block ads,” the association says, adding: “It is essential that any action must have at its heart the consumer experience.” According to Luis Di Como, Senior Vice-President of Global Media at Unilever and a member of the WFA Executive, marketers and their agencies need to “focus on creating content that is authentic, relevant for consumers and drives talkability – creative that enhances rather than detracts from users' online experiences. We have an ambition to create a billion one-to-one relationships with our consumers through providing positive brand experiences”. A recent study by digital advertising consultancy PageFair into ad blocking on mobile devices indicates that 22% of the world's 1,9-billion smartphone users are now preventing ads from reaching them.
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Although South Africa has yet to feel the same impact of ad blocking being suffered elsewhere, the local advertising and marketing industry should not necessarily regard it as the big bad digital wolf that some fear will soon kill off the concept of the ‘free’ Internet. Indeed, rather than taking advertising revenue from digital platforms, ad blocking could be one of the best things to happen to online marketing, reports the April-May 2016 issue of ‘Strategic Marketing’ magazine, the publication of the Institute of Marketing Management (IMM). This is because it encourages marketers and agencies to be more relevant, compels publishers to reduce clutter and develop other streams of venue, and improves the overall experience of the Internet. “It is not just that agencies and their clients need to respond to the threat of ad blockers,” says Gillian Rightford, Managing Director of communication consultancy Adtherapy, in an interview with the magazine. “The entire digital advertising platform needs a shake-up. Too much online advertising is the result of simply emulating other forms of more traditional advertising. The quality of advertising is poor and it does not work. Ad blockers might just be what we need to accelerate the move to a new, vastly improved approach.” Advertising commentator Andy Rice agrees and says the anxiety around ad blocking is similar to concerns raised a decade ago when PVRs (personal video recorders) were introduced. “People worried that, because it allows viewers to skip commercials, advertisers would not be able to rely on television. [Instead], it meant advertisers had to work harder to engage audiences. That is what needs to happen with online advertising.” Research conducted earlier this year found that 9,9% of SA Internet users are active ad blockers, which is low for a nation of this size.
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The blame for the ad blocking crisis that faces global digital and online advertising lies squarely with the advertising industry itself, a top executive with the Saatchi & Saatchi group has warned. Richard Huntington, the Group Chief Strategy Officer, says advertising has only ever worked – and can only ever work – with the agreement of the public. “Consent is a collective agreement that we are happy for the medium and content we are using to be interrupted (and therefore commercially supported) through advertising activity,” he writes in a recent edition of the UK-based ‘Marketing’ magazine. “This consent has existed for generations in traditional media like newspapers, magazines, radio, TV and cinema. Indeed, advertising is, in many ways, part of the experience of those media. There is a consensus that annoying though it may be, the activity itself is acceptable.” But, turning to the crisis currently facing digital advertising as a result of the growth of ad blocking technology available to consumers, Huntington says the public never consented to pre-rolls, page takeovers, pop-ups “and those ghastly formats that follow you as you scroll down the page”. With the notable exception of ‘search’, people are profoundly unhappy with the vast majority of digital advertising, he believes. “And the result is quite clearly that digital advertising as we currently know it is about to implode. If huge numbers of people adopt ad blocking functionality we will only have ourselves to blame. Ad blocking is symptomatic of the lack of consensus over digital advertising techniques and formats.” Huntington says that if the industry is to save digital and online advertising, as distinct from other brand activity online and in the social media space, “then we need to start again. Start again and figure out how to create a consensus between publishers, advertisers and consumers about how advertising is allowed to work online. How it interrupts, how it engages and what data it uses.”
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Digital advertisers and digital publishers – already concerned about the growth of ad-blocking technology that enables consumers to block digital ads on their laptops, tablets and mobile phones – are now facing another threat: from mobile phone operators looking to block digital ads on behalf of their customers. Britain’s biggest operator, EE, announced last week that it will decide whether to help its 27-million customers restrict the quantity and type of digital advertising that reaches their devices. The ‘Daily Telegraph’ newspaper reports that this comes “amid concern over increasingly intrusive practices [by digital advertisers]”. According to the newspaper: “The review will look at options for creating new tools for subscribers that would allow them to block some forms of advertising on the mobile Web and potentially within apps, such as banners that pop up on top of pages or videos that play automatically. EE customers could also get the ability to control the overall volume of advertising.” The company’s Chief Executive, Olaf Swantree, declined to call it ad blocking, but said it was an important debate around customer choice, controls and the level of advertising that mobile users receive. “The move will send shock waves through the digital advertising industry, which is already battling increasing levels of blocking by consumers who download software to do it,” the newspaper noted. Recently a mobile operator in the Caribbean and South Pacific region became the first cellular technology company to block all digital advertising to its customers on the grounds that it wants to be paid by the advertising networks which are using its infrastructure to do their business. “Companies like Google, Yahoo and Facebook talk a great game and take a lot of credit when it comes to pushing the idea of broadband for all – but they put no money in,” Denis O'Brien, Chairman of Bermuda-based Digicel said. “Instead they unashamedly trade off the efforts and investments of network operators like Digicel to make money for themselves.”
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Tuesday, 30 June 2015 22:00

Facebook seeks more African advertising

Facebook has announced the opening of its first African office as it seeks to continue growing the social network’s footprint on the continent and take advantage of the advertising and commercial opportunities presented by the ever-increasing number of Africans who are using the network.

The office is located in Johannesburg but will focus on the entire sub-Saharan African region, which a special emphasis on the key markets of Nigeria, Kenya and South Africa. Facebook says it is enlisting the help of governments, telecom operators, agencies and other stakeholders to help drive the effort. 

Given that there are already 120-million African-based users and the numbers are likely to continue climbing as more people become connected, the potential for advertising is huge. However, marketers wishing to take advantage of this will need to optimise their advertising strategies for mobile devices as this remains the main method of connecting to the Internet for most Africans. Feature-rich, video-heavy marketing messages may remain problematic in the short term, as data costs on the continent remain high and connectivity can be unreliable outside the major urban centres. 

However, this situation is expected to improve over time and the company says it expects the cost of data services to decrease. It also anticipates that increasing numbers of people will upgrade from basic feature phones to smartphones that are capable of running Facebook’s full mobile app. 

“We are committed to creating solutions tailored to people [and] businesses specifically for African markets,” said Ari Kesisoglu, Regional Director for Facebook in the Middle East and Africa, in a media statement. 

“Our priority for the next few months is to continue the work we are already doing with some clients in this region. We will work more closely with businesses and agencies to understand the challenges, so that we can build solutions that help grow their business.”

The new African sales team will be led by Nunu Ntshingila-Njeke, a prominent figure on the South African and African advertising scene. She was previously chairperson of Ogilvy South Africa and the only African representative of the board of Ogilvy Worldwide.

Although the aim of the new office is the increase Facebook’s advertising opportunities in Africa, there is already a notable advertising base on which to build. “Facebook now has over 1,5-million active advertisers from around the world, and a growing number of them come from Africa,” Aidan Baigrie, Facebook’s Client Partner for sub-Saharan Africa, said in an interview with Strategic Marketing Africa’, the publication of the African Marketing Confederation, earlier this year. “In the larger African countries we have attracted a number of big financial services, media and retail brands as customers. But we are also seeing many small- and medium-sized businesses use Facebook as a key channel to build their businesses.”

In tandem with its efforts to attract more advertisers based on the continent, the social media platform is also working to continue building the number of individual users it has in Africa. One of its major initiatives is ‘Internet.org’, which provides basic, free Internet access via a mobile app. The app is now available in Zambia, Tanzania, Ghana, Kenya and South Africa, with plans to extend its reach to other local markets.

 

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Programmatic buying of online advertisements is becoming big business as marketers work to drive more value from their ad spending and to leverage customer data more effectively. While still in its infancy in South Africa, it is a trend that seems set for lift-off, predicts Andre Steenkamp, CEO of local digital agency 25AM.

He says the media buying tool has been available in the country for three or four years, but it's only now that local marketers and their agencies are beginning to pay attention. Drivers for adoption include a need for brands to make their advertising spending work harder and a growing focus on data-driven, customer-centric marketing.

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Online video is the second-fastest growing advertising medium after mobile, according to BI Intelligence, the research service of New York-based business and technology news website 'Business Insider'. With an ever-increasing base of online video viewers across the world, it's easy to see why marketers are embracing video. But what is the situation in Africa?

Given that experts are forecasting an unprecedented 19,5% three-year compound annual estimated growth rate in video advertising income through to 2016, and with news from market research company E-marketer that digital will make up more than 25% of total ad expenditure in 2015, the increasing prevalence of online video is clear.

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Sunday, 07 December 2014 22:00

Half of online ads not being seen

More than half of all Internet-based display advertisements served by Google are not being seen by online consumers, according to research findings released by the company late last week.

“With the advancement of new technologies we now know that many display ads that are served never actually have the opportunity to be seen by a user,” Google’s Group Product Manager, Sanaz Ahari, said.

The research was conducted in October and analysed data from a wide array of global online publishers, ranging from small blogs through to national newspapers. It looked specifically at display ads across Google’s Display Network (GDN), DoubleClick for Publishers and DoubleClick ad Exchange. A future study will look at video and mobile-based ads.

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