The media industry has seen a drop in advertising spend from R9,7bn in 2001 to R8,6bn in 2002. It's a painful change.
Advertising and advertising sales companies expect the situation to improve only if the rand continues to strengthen and the pace of economic growth accelerates.
In 2001, television commanded 42% of total media spend while 39% went to print, 12% to radio, 4% to outdoor advertising and 0,5% to cinema.
Print media has since overtaken television and now accounts for 44% of all ad spending, while television gets only 36%.
Radio experienced slightly negative growth, resulting in a decline in advertising spend from R1,2bn in 2000 to R1,1bn in 2001. But it bounced back in 2002, with R1,15bn.
According to analysis company Adindex, radio now has about 14% of total media advertising spend, its highest since 1976.
SABC stations, both public and commercial, experienced the largest decline in year-on-year growth in 2001. Independent commercial stations, on the other hand, experienced a surge in advertising over the same period.
A recent report by PricewaterhouseCoopers indicates that total radio revenue increased by 10,9% in 2000, 3,8% in 2001 and 17% in 2002.
This indicates the volatility of the advertising industry, which complicates medium-term expansion plans for radio stations.
Since the partial unbundling of six SABC stations, 94.7 Highveld Stereo has been the dominant earner, followed in recent years by East Coast Radio and Metro FM.
Icasa projects manager Pfanani Lishivha says that besides branding, format and "personality" issues, the prevailing advertising revenue trend indicates that the stations that attract the higher LSMs (living standard measures) in wealthier, urban regional markets command the highest level of advertising spend per listener. "On the other hand, stations that attract audiences in the lower LSMs have to deliver higher audience levels for comparable advertising spend," says Lishivha.
He says the same goes for the print media, where publications with higher LSM readership attract the highest level of adspend per reader.
