Ad­spend breaks R20bn bar­rier

Finweek English Edition - - Advertising & marketing -

AD­VER­TIS­ING EX­PEN­DI­TURE broke through the R20bn bar­rier last year, though it grew at a slower pace than pre­vi­ously, gear­ing down from 23,1% in 2004 to 17,2% in 2006. That’s ac­cord­ing to Nielsen Me­dia Re­search. Fastest grow­ing of the ma­jor me­dia was out­door and out-of-home, cur­rently the most dy­namic cat­e­gory, which has lifted its share of mar­ket from 4,6% to 5,1%.

Clear Chan­nel In­de­pen­dent MD Bazil Lau­ryssen says out­door has be­come a much more com­pet­i­tive and dy­namic medium than it was. “Our think­ing has be­come a lot more short term and tac­ti­cal. Pre­vi­ously, con­tract ad­ver­tis­ers would tie up a site for years. Now the site is more read­ily avail­able, which at­tracts new ad­ver­tis­ers.

“A lot of new ad­ver­tis­ers are spend­ing money on the medium by ad­ver­tis­ing lux­ury goods, fi­nan­cial ser­vices, mo­tor ve­hi­cles and cell­phones, whereas pre­vi­ously they didn’t think be­yond TV or ra­dio. They have more than made up what we lost when to­bacco ad­ver­tis­ing was banned.

“The in­dus­try has be­come more in­no­va­tive, cred­i­ble and pro­fes­sional, both in its prod­ucts and its approach to sell­ing. Au­di­ence mea­sure­ment launches in April, mak­ing it pos­si­ble to com­pare our per­for­mance on gross rat­ing points ba­sis against TV or ra­dio.”

Also rac­ing ahead of the av­er­age was TV, which ex­panded by 21,8% – bring­ing it close to over­tak­ing the slower-grow­ing print cat­e­gory. The seeds of fu­ture trou­ble for print are ap­par­ent in the ev­i­dence from the mag­a­zine cat­e­gory. There’s been an ex­plo­sion of new mag­a­zines launched – as shown by the 123 new ti­tles, al­most all of them mag­a­zines, reg­is­tered with the Au­dit Bureau of Cir­cu­la­tions last year. But ad­spend grew at a rel­a­tively pedes­trian 15,7% – not enough to sus­tain all the new mags.

Look­ing health­ier is the news­pa­per cat­e­gory, where there are very few new ti­tles but a faster growth rate in ad­spend.

An­other rapid riser was the In­ter­net, which en­joyed a growth rate of al­most 24% but off a very low base. At R174m in ad­spend, it’s not an ad­ver­tis­ing medium that can be taken se­ri­ously yet.

Cin­ema showed a huge drop, but that has to do with anom­alies in mea­sure­ment.

AD­SPEND BY MEDIUM – 2006

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