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Finally, the real tipping point

A BIT LIKE the Second Coming, the “digital tipping point” has been predicted or identified more often than Julius Malema has shouted “racist!” But now it looks real. The trickle has become a flood. With each month that passes, online usage tops new highs. A year ago the number of online South African users was put at 5,3m. Now, says the Digital Media & Marketing Association, 9,1m South Africans visited its registered sites each month during first quarter 2010. About as many people go online as read a daily newspaper (9,3m).

Unsurprisingly, advertising revenues have responded, rising 31% in a year. Online now accounts for 2,3% of national adspend, according to ACNielson’s Adex.

The reasons are manifold, says Habari Media sales GM Garth Rhoda. “Nielsen Online Market Intelligence recorded a 51% increase in online traffic, year-on-year, in the first quarter. There’s been a significant shift in global media consumption, with more eyeballs opting for digital, and we’re now seeing the tangible results.

“In addition, the cumulative effect of educating the marketplace and the general increased understanding of digital media has built confidence in the medium: it’s no longer a mystery. More planners and clients are aware of the benefits of digital advertising and that’s resulted in more spend being allocated to the medium. Support is growing among ad agencies, which generate 70% of Habari Media’s revenue.

“Combine that with the hype about social media, the growth in home connections and the recent ADSL price war and you have an unbeatable formula for success.”

Habari Media is an online advertising sales agent, working for publishers, from the BBC to Sowetan.

More multinational blue chips have started dipping their toes into SA’s digital market. “This is hugely exciting,” says Rhoda. “They tend to test the waters with big budgets and are realising better campaign results. Clients in turn get better value-add, which further enhances confidence in the medium.”

SA is following the same curve. “Online adspend should top R800m this year,” says DMMA chairman and Habari Group CEO Adrian Hewlett. But that only represents DMMA-registered businesses audited by Nielsen. It’s guesstimated another R200m is earned by Google SA and some digital media owners don’t submit figures, so the true figure is thought to be significantly higher.

Growing user numbers, lower ADSL costs, an increase in the skills pool and international pressure to spend more online are all factors driving the trend, says Hewlett. “One thing that could hold back growth is the skills shortage. That aside, digital businesses are thriving, audience and spend are up and the future looks better than ever.”

* The DMMA was formerly the Online Publishers’ Association (OPA). 
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