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South African companies allocated 81% of their marketing budget to digital advertising
South African companies allocated a large majority of their marketing budgets at 81% to digital advertising. This is according to the Broad Media 2023 Marketing Budget and ROI report released in June.
The report is based on a survey conducted in May 2023 with 1,757 respondents taking part. It is based on the responses from those who work in their company’s marketing department or are involved in the marketing activities of their company.
The report also revealed that digital advertising provides the best ROI for South African companies by a large margin at 82% compared to print at 15% and outdoor at 13%. Radio, television, and cinema on the other hand provide 10%, 11% and 1% ROI respectively.
When looking at companies which spend over R1 million per year on marketing, the results were the same. Digital advertising was by far the top performer – both in terms of receiving the most budget and providing companies with the best ROI.
Digital advertising refers to marketing through online channels, such as websites, streaming content, influencers and more. It also covers services promoted through services such as
search engines and any other program that can be accessed digitally. The aim is to help businesses achieve a variety of goals across the marketing funnel, ranging from brand awareness to customer engagement, to launching new products and driving repeat sales.
The internet user base's expansion coupled with self-service platforms is one of the factors driving the global digital advertising market. The Internet is extensively used for e-commerce, e-learning, social connectivity, media, communication, and file transfers. According to Internet World Stats, as of June 2020, the number of Internet users in the world is 4.8 billion, which accounts for more than 60% of the global population.
In addition to this, the growing popularity of self-service advertising platforms is also the main contributor to the digital advertising market. Self-service advertising platforms are providing advertisers more convenience in the placement of their advertisements. The ease of being able to set up and administer their campaigns without the inconvenience of dealing with human intermediaries draws advertisers' attention towards digital marketing. Therefore, an increase in the internet user base along with self-service platforms is driving the market.
ResearchAndMarkets notes that globally, the market is expected to grow from $178.29 billion in 2022 to $185.17 billion in 2023 at a compound annual growth rate (CAGR) of 3.9%. It is also expected to grow to $209.43 billion in 2027 at a CAGR of 3.1%.
