e-spaces

South Africa’s mobile advertising revenue is expected to grow more than 10 times in the next four years to as much as R2.15 billion, according to a BMI-TechKnowledge report that was released yesterday.

August 13, 2008

By Thabiso Mochiko

Johannesburg – South Africa’s mobile advertising revenue is expected to grow more than 10 times in the next four years to as much as R2.15 billion, according to a BMI-TechKnowledge report that was released yesterday.

Mobile advertising – which uses cellphones as its medium – is still in its infancy in South Africa, but sales from this rapidly growing service reached about R200 million last year.

Growth from this market depended on the number of companies that started to use mobile advertising and how quickly they jumped on the bandwagon, Astrid Hamilton, a senior analyst at BMI-TechKnowledge, said yesterday.

She said growth also depended on the success of such advertising and on how aggressively cellphone operators and other major corporations pushed this market.

Vodacom is one of the first companies to exploit the cellphone advertising market, which could be a new revenue stream for the country’s biggest cellular network provider.

Local mobile advertising revenue is expected to surpass internet advertising, which is expected to grow from R300 million last year to between R600 million and R1.15 billion by 2012.

Mobile advertising is a new platform for marketers to provide products in an interactive way making use of more than 40 million active SIM cards in the country. Hamilton said consumers had much more power and were becoming the ones who were “pulling” the content they wanted. “The customer is in control.”

Companies could bypass the middleman and go straight to the consumer, she said. The pull model came with new ways of offering content, including interactivity and personalising content to suit customers.

BMI-TechKnowledge estimates that revenue earned from internet music downloads could reach an estimated R254 million by 2012, from an estimated R60 million last year.

Hamilton said piracy was still a big inhibitor to digital music sales. Globally, only one out of 20 songs was downloaded legally. But, Hamilton added, music firms needed to implement easy-to-use ways for people to buy digital music.

MTN and Vodacom have entered into exclusive agreements with music industry firms to allow users to download songs.