Johannesburg - Advertising spend across all media types more than doubled to R17.1 billion last year from just R8.1 billion in 2001, the latest industry report by Nielsen Media Research, a division of research firm AC Nielsen, has shown.
Print media, television and radio consistently received the lion's share of adspend in the five years, accounting for R15.5 billion, or 91 percent, of the total adspend last year.
The largest growth in spending on a particular media type was for cinema, which increased ninefold from R61 million to R591 million in the five years. Spending on internet advertising nearly tripled to R141 million in the period.
The outdoor advertising industry, which has been under pressure for erecting illegal billboards, and direct marketing lagged other media types in terms of growth.
Media companies such as Primedia, Johnnic Communications, Naspers, Caxton, Kagiso Media and Independent Newspapers (which owns Business Report) have all experienced a surge in earnings as a result of this increased advertising spend.
Primedia, which this week posted a 33 percent jump in operating profit before exceptional items to R243 million, said that it planned to generate 30 percent to 40 percent of its operating income from content, which was less "sensitive to economic cycle".
About 80 percent of Primedia's operating profit is from the advertising division, which includes radio assets such as Talk Radio 702 and Highveld Stereo 94.7.
However, media outlets are battling to retain market share, even in these boom times.
Kagiso Media, which has a stake in Jacaranda 94.2, East Coast Radio and OFM radio stations said last week that it continued to feel the pressure of "heavy discounting" by television and retailers' preference for print advertising during the economic boom.
Though advertising spend increased over the last five years, new publications such as ThisDay were closed down after one year in operation because of, among other things, a lack of advertising support for the paper.
Media24's Daily Sun has not yet broken even despite securing more than 3 million readers a day.
However, there were new magazines titles that hit the streets over the last five years, such as Media 24's Move and the privately published Blink Magazine.
African Harvest Fund Managers portfolio manager Rajay Ambekar said the magazine market was overtraded and that a lot of magazines still fought for the share of that "advertising cake".
Asked whether advertisers received value for their heavy investments, Ambekar said advertisers invested money to build their brands or to generate sales.
"Depending on what they want to achieve, I do believe that they get value ... otherwise they wouldn't be spending these billions."
Ambekar said one of the key drivers for the surge in advertising spend could be attributed to general buoyant consumer spending. This resulted in "exceptional sales numbers" from most retail companies, he said.
Unilever, which spent R438 million across all media types last year, was the country's biggest advertiser, followed by MTN (R373 million), Vodacom (R349 million) and Shoprite Checkers (R335 million).
Cellphone companies, MTN, Vodacom and Cell C, spent R925 million across all media last year, about one-third more than the three big spending banks, FNB, Standard and Absa, which spent R667 million.
Last year's top 10 advertisers in print, Pick 'n Pay, Shoprite Checkers, MTN, Spar, Vodacom, Standard Bank, Mass Stores, the national government, Cell C and Multichoice Africa splashed out R1.1 billion. This is 16 percent of the total spend on print and 6 percent of all advertising spend.
In the print media, 29 percent of advertising last year came from retail companies who, in total, spent about R1.9 billion. They were followed by travel and leisure companies, which spent R1.3 billion.
Banks spent R734 million in print, or 11 percent of the total.
Retail companies also advertised the most on TV, spending R1.5 billion or 24 percent of total TV adspend. They were followed by health and beauty businesses, which accounted f
or R887 million, or 14 percent.