SOURCE: Frost & Sullivan

March 15, 2011 01:30 ET

Frost & Sullivan: Technological Advancements Steer Traditional Advertising Agencies in South Africa Toward Digital Media

CAPE TOWN, SOUTH AFRICA--(Marketwire - March 15, 2011) - Fast-paced advancements in technology have unleashed new opportunities as well as challenges in the total South African digital media market. Traditional media participants have accepted these advancements with a great deal of interest. On the other hand, South African media houses are unsure of the new dynamics and related growth opportunities. Uncapped data service offerings coupled with high penetration of mobile phones have led to an increased growth in the digital media market.

New analysis from Frost & Sullivan (, An Assessment of Digital Media in South Africa, finds that although South Africa has witnessed an uptake in digital media, it is not at the same level as that in first world countries. The South African digital media sector has been undermined by the low penetration rate of the Internet, which stands at about 10 per cent.

"The launch of undersea cables has resulted in more connectivity within the country particularly with regards to more inland terrestrial fibre being deployed to accommodate increased International bandwidth," says Frost & Sullivan ICT Research Analyst Mogen Naidoo. "As a result, bandwidth prices are decreasing and Internet penetration is increasing."

Consumers are now able to access media online or on their mobile phones at more affordable rates. As a result, there is an increased growth in the digital media market.

Although the market is progressing at a steady pace, there are some aspects restraining its momentum. Digital media is a new concept, and there are misgivings over the credibility of information online, such as online blogs. Consumers do not necessarily trust what they read online. Moreover, traditional media content compiled by experienced journalists is aimed at educating and informing consumers, and this effect is removed by digital media.

There will be continuous demand for traditional media in South Africa, particularly in rural areas where radio and community print are prevalent. In South Africa, high cost of data used for digital media ensures that traditional media remains a viable channel.

In this scenario, companies should be aware about the interests of their audience to develop specific platforms and provide content that will meet their requirements. Media houses need to create content that consumers will pay for. Content can be easily replicated online and this makes timeliness only a marginal selling point.

"Research services or studies produced online may have a commercial value but this may not be a realistic option for news publications," says Naidoo. "Most media houses are therefore not creating commercial value, but social value."

Social capital today is seen as a very powerful currency. Most newspapers offer the same type of revenue-generating formats from classifieds to subscriptions. In order to successfully benefit from them, it is important to identify what is valuable to users. Many companies are now moving into new areas of monetisation, where value-added services maximize revenue generation potential.

If you are interested in more information on this study, please send an e-mail with your complete contact details to Christie Cronje, Corporate Communications, at

An Assessment of Digital Media in South Africa, is part of the Digital Media Market Insights subscription. Recently published titles under this subscription include: The Age of Digital Analytics, Going Beyond Media Asset Management: The Value Proposition of Production Asset Management, and Digital Asset Management - The Key to Unlocking Effective Web-Based Marketing, among others. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit

An Assessment of Digital Media in South Africa

Contact Information