Market Research Wrap: SA media, entertainment outlook to 2022
Cheryl Hunter (research at marklives.com)’s weekly wrap of the latest market and consumer research:
- Blurred reality
- Innovation not enough
- Bad bots
Convergence across Africa
Africa’s entertainment and media industry has entered a third wave of convergence, with the borders that once separated the entertainment and media (E&M), technology and telecommunications industries blurring in a world that is rapidly digitising. This is according to PwC’s “Entertainment and media outlook: 2018 — 2022: An African perspective” released this week.
The outlook study is a comprehensive source of analyses and five-year forecasts of consumer and advertising spending across five countries (South Africa, Nigeria, Kenya, Ghana and Tanzania) and 14 segments — internet, data consumption, television, cinema, video games, esports, virtual reality, newspaper publishing, magazine publishing, book publishing, business-to-business (B2B), music, out-of-home (OOH) and radio.
By 2022, total E&M revenue in South Africa is expected to reach R177.2bn, up from R129.2bn in 2017. Internet (access and advertising) is expected to grow at a compound annual growth rate (CAGR) of 11.3% over the forecast period to reach R91.2bn, up from R53.4bn in 2017. Internet advertising will greatly exceed TV advertising in terms of growth, leading the way with a 13% CAGR over the forecast period to reach R9.4bn and overtake TV advertising spend in 2022.
Says Vicki Myburgh, PwC Southern Africa entertainment and media Leader, “The pace of change isn’t going to let up anytime soon. New and emerging technologies, such as artificial intelligence and augmented reality, will continue to redefine the battleground. In an era when faith in many industries is at [an] historically low ebb and regulators are targeting media businesses’ use of data, the ability to build and sustain consumer trust is becoming a vital differentiator.”
The report shows that advertising in the E&M industry has been mostly affected by SA’s economic environment, with cautious growth of just 1.9% year on year. An improvement is expected to 2022, with a 3.3% CAGR bringing total advertising revenue to R41.5bn, from R35.3bn in 2017. New technologies and devices such as AI, VR and AR (virtual and augmented reality), voice-based smart home devices and virtual assistants look set to drive innovation in online advertising on a global scale in the coming years.
After a breakthrough year, SA’s total esports revenue is forecast to rise from R29m in 2017 to R104m in 2022, a CAGR of 29%. A host of high-profile events in 2017 helped to propel esport further towards the mainstream, and a number of similar events have been and are being held this year.
Newspapers and magazines will see revenues decline over the next five years. In 2017, total newspaper revenue fell by -2.9% to R8.6bn. The forecast for the years ahead is for decline at -4% CAGR. By 2022, SA total newspaper revenue is expected to drop to R7bn.
Music events still draw large crowds, with ticket sales set to see an 8.0% CAGR to 2022, helped by major tours from popular crowd-pulling acts in 2018.
Download the full report (9.38MB pdf). For more info, go to PwC South Africa.
SA brands have to take a stand
The second iteration of WE Communication’s Brands in Motion 2018 research shows South Africans have higher expectations than their global counterparts, with consumers insisting on both ethics and innovation. WE South Africa’s Sarah Gooding Kobus gave Market Research Wrap her key insights for the local market.
Carried out among more than 25 000 consumers and B2B decision-makers across eight global markets, the survey covered eight categories, and 90 brands. One of the most-astonishing revelations is that even brands which are perceived to be highly innovative simply won’t make the grade anymore.
The number of South Africans who insist on the ethical use of technology while still maintaining customer-centred innovation is an overwhelming 99%. And where brands are unable to ensure their own ethical use of technology, 95% of South Africans believe governments should step in. The message is clear: innovation alone is no longer enough.
Major brand names such as SAP, KPMG, McKinsey and Steinhoff — institutions that would previously have been perceived as untouchable — have tumbled from grace in SA. The result is that citizens have radically transformed their views on the role of brands in society.
At the same time, the wildly fluctuating rand-dollar exchange is testament to the high degree of uncertainty, largely as a result of developments around land reform and growing concern in the midst of the China-US trade wars. It’s perhaps why the study shows that 65% of South Africans are looking to brands to provide stability in this climate of uncertainty.
When it comes to how brands handle important issues in this increasingly unstable climate, this expectation is even greater, with 87% of SA respondents indicating they expect brands to take a stand.
Sixty-three percent 63% of South Africans expect tech to help brands be more sustainable (16% more than the global average) and 72% expect brands to deliver an online experience that enables them to assess products and services, compared to the global average of just 52%. With an increasingly powerful middle class expanding its purchasing power, greater than ever numbers of South Africans are experiencing first-hand the ability of tech to transform their daily lives for the better.
Winning SA consumers over under the current operating conditions is a tough ask. The good news, however, is that by using clear insights around the forces driving customer perceptions, brands may begin to harness their motion in relation to these disruptive forces.
Download the full report (40.7MB pdf ). For more, go to WE.
Bots kill customer experience
Automated internet traffic is on the rise, largely due to software programs called bots; although some facilitate data sharing and customer engagement, many are tools that malicious attackers use to break into apps, steal revenue, and expose intellectual property. According to a new Forrester report, bad-bot traffic is degrading app performance and corrupting data used to make critical customer engagement decisions.
Buy the full report at Forrester.
Cheryl Hunter (@cherylhunter) has written for the South African media, marketing and advertising industries for more than 15 years. A former editor of M&M in Independent Newspapers and contributor to Bizcommunity, AdFocus, AdReview and the Ad Annual, she has also produced for various television networks and currently consults on communication strategy and media liaison. She now does the new weekly “Market Research Wrap” column for MarkLives.com.
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