South African ad industry recession ending

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JOHANNESBURG--South African ad expenditure in the first half of the year grew 10.4% to $581 million compared with the same period of 1999, according to Adindex, an ACNielsen monitoring service.

Although the nominal rate of growth was the slowest since 1985, and about a percentage point below the 1999 annual growth rate, it was accompanied by a record low rise in media inflation.

Ad rates rose only 5.6% in the same period, according to Media Inflation Watch, another ACNielsen service, which means that in real terms the ad market grew by about 4.5%.

This is the result of competitively driven rate discounting, but is also being taken as a sign that the ad business is starting to move out of its worst recession ever.

The biggest beneficiary of the trend was radio, which experienced growth of 36%, reversing a six-year decline in its share of the total market. Its share of total adspend grew from 10.8% in 1999 to 13.4% this year, largely driven by a determined attempt by radio stations to cut their ad rates. Deregulation in 1996 has made radio the most competitive media category, with the number of stations having grown from 30 to 130.

Print was up 8%, and TV was up 6%. Billboards also experienced a big growth in revenue, up 30%. But cinema declined by 4% in nominal terms, and community newspapers (free sheets) dropped by 23%. Market shares are: print 42.4%; TV 39.1%; radio 13.4% and billboards 3.7%.

Copyright September 2000, Crain Communications Inc.

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