US-based AdMob, a mobile advertising company, is strengthening its local presence by opening an office in SA.
The company is also assembling a local team that will build relationships with local advertisers and publishers, says AdMob business development director Niren Hiro in a media statement.
This investment includes sending a number of employees to SA as of 1 July, he adds.
Hiro says AdMob's move is in response to advertiser demand and rapidly growing local mobile Web usage. The move will also see the company compete with local players in the mobile advertising space including On the Line, a Vodacom mobile advertising company.
"SA is a very important market for AdMob, because of South African users' love for the mobile Web. AdMob has seen early success helping advertisers reach South African users and is now investing to grow our South African presence," he says.
South African mobile users generated 159.2 million mobile ad impressions in the month of May on the AdMob network.
The market also saw double-digit traffic growth over the last six months, Hiro notes. AdMob currently works with advertisers and mobile Web site publishers in over 160 countries around the world to create targeted advertising for mobile Web users.
It ranks SA as its fifth-largest country market by number of page impressions after the US, India, Indonesia and the UK, he adds.
Unique market
Rick Joubert, head of mobile advertising and social media at Vodacom, previously noted mobile advertising spend last year equalled that of online ad spend, and it is predicted that, by 2011, mobile ad spend in SA will rise to R1.5 billion.
However, the South African market presents unique challenges for advertising-funded mobile services.
SA has two distinct economic segments operating side by side, which influences the services offered and the price plans, says Joubert.
Another challenge is that 90% of local mobile connections are prepaid, with fairly low average annual revenue per user for the prepaid market. This means the small group of postpaid customers spends a lot and really pulls the average up, he says.
The fact that SA has 11 official languages means advertisers are dealing with a heterogeneous society, making it difficult to engage in traditional "mass market" marketing, he says.
Doing well
Despite these challenges, Angus Robinson, founder and CEO of Brandsh Media, says mobile campaigns run on the AdMob network have been successful.
Brandsh Media began running campaigns for its clients on the AdMob network at the beginning of 2007, he says. The company currently has five clients using the network for its mobile campaigns.
"We ran a campaign during the Cricket World Cup, with the live feed going on the Standard Bank Web site. The campaign was so successful, we decided to continue using the service," he says.
AdMob served over three billion ad impressions on mobile Web sites around the world, in May alone.
The company has registered over 29 billion impressions since its launch in 2006, and sees an average of 1 250 impressions per second daily.
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