South Africa Online Advertisers Getting Ripped Off
February 13, 2007 
3 Comments
It is no secret that South Africa is always a little slow to follow world trends, especially when it comes to industries that are predominantly profit driven, so why should it be any different when it comes to online advertising.
Online advertising spend has seen a massive increase from just 64 million Rand in 2004 to a whopping 183 million Rand in 2006 and a further projected 274 million rand in 2007.
Yet contrary to world trends where the actual the cost to place online advertisements has decreased, fuelling the overall growth in online advertising spend, the cost to place an online advertisement in South Africa has continued to increase.
It remains common practice in South Africa to spend as much as R0.20 per banner impression, and publishers are not held to book on any performance based model such as the widely accepted Cost per Action model (CPA), where publishers are paid per click, lead, or sale.
Additionally many of the larger publishers, most notably those who are members of the online publishers association (OPA), are inclined to charge a set monthly fee for hosting banners on their websites without any performance guarantees to the advertiser, further adding to the cost and risk of advertising online in South Africa.
Internationally the use of banner advertising as a medium has seen a sharp decline due to the medium becoming largely ineffective, and costly if measured as a true return on investment.
Yet despite this online publishers in South Africa continue to promote the use of banners as an effective medium, whilst doing little to enhance their systems for any other form of rich or static media.
Collectively these factors coupled with the inexperience of companies advertising online continue to stifle the true potential growth of online spending.
Internationally companies work on a simple model for measuring their return on investment with any online medium. The medium must at worst return 50% over and above their advertising investment.
The mentality in South Africa remains typically corporate, where online advertising is most often seen as a branding exercise.
That however is changing slowly with a few progressive online companies realizing that there is a real opportunity to turn R1.00 into R2.00 with effective ROI measuring, and strict online advertising opportunity assessment.
Great article Justin,
This is about to change in the South African Market. I see online publishers, such as Beeld etc charge R360 per 1000 impressions, now, to my mind, that is A LOT of money. It’s R0.36 per impression.
I’ve created a model on http://www.dateworld.co.za that will allow businesses to advertise at a rate of R0.01 per impression, or R10 per 1000. I currently have about 135000 impressions per month and I think this would be a very viable advertising opportunity for local businesses.
love your website and your blogs, you’re doing great work
Anton
Justin, I couldn’t agree with you more. In fact businesses in South Africa are being ripped off for most web services, not just banner ads. Possibly because they are being fed misleading information.
If they worked on the same basis as affiliate marketers in the USA with the arsenal of proprietary software that is available.
Online advertising should be judged on it’s results not on a fixed price. If that were the case we would have very few online ad companies.
I totally agree with you. Before you do online advertising, demand to see figures!