The Impact of Global Brands on Local Markets
With the rise of international e-commerce giants like Temu and Shein dominating the ad space, local brands are facing an increasingly competitive digital landscape. However, there is still ample room for South African brands to thrive.
The influx of these global players has increased consumer awareness and trust in online shopping, which benefits all e-commerce businesses. That said, local brands must refine their targeting and messaging strategies while keeping pace with the evolving digital marketing environment. While cost-per-thousand impressions (CPMs) have risen across key platforms such as DV360, Google Ads, and Meta, strategic adaptation has led to reduced acquisition costs and improved efficiency for brands willing to evolve.
Strategies for Competing with Big Spenders
The past decade has witnessed significant shifts in digital advertising, particularly with the growing reliance on automation. Instead of focusing on micro-optimisations at the campaign level, brands should prioritise audience segmentation and creative excellence. Data measurement and accuracy play an integral role in assessing whether a strategy is effective.
Segmentation should be built on relevance, as machine learning thrives on the alignment between ad targeting and content. By leveraging strong creative and well-defined audience strategies, local brands can carve out a competitive edge against high-budget advertisers.
Adapting to the Shopping Season Surge
After four years at Traffic Brand, we’ve refined our approach to high-demand shopping periods like Black Friday. Initially, our strategy revolved around heavy participation in these sales events, with early messaging to signal upcoming deals. However, we have since realised that South African consumers already anticipate discounts and do not require prolonged promotional bursts to engage.
Instead, we now focus on highly refined audience targeting and impactful, shorter campaign bursts. While increasing bid ranges during peak seasons is inevitable, investing in high-quality audience segments ensures that elevated CPMs yield higher engagement rates and return on investment (ROI). Over time, these audience groups can be improved, reducing the need to compete in oversaturated market spaces.
The Role of First-Party Data in Digital Strategy
First-party data is one of the most valuable assets in a marketing strategy, allowing brands to enhance traditional targeting with additional layers of relevance. However, using only in-house first-party data presents limitations. Brands typically have two primary options: leveraging lookalike audiences for acquisition or focusing on increasing customer lifetime value through direct targeting. Relying solely on first-party data risks stagnation, as it limits opportunities for long-term growth.
To expand acquisition efforts, we have integrated rented first-party audiences from providers like Flow. This approach has proven to nearly double return on investment while significantly reducing acquisition costs. Effective segmentation and exclusion strategies are crucial to prevent audience overlap and ensure precise measurement of results. By documenting case studies, we have successfully demonstrated the efficacy of these strategies to clients, fostering increased adoption.
Challenges in Adopting First-Party Data Strategies
The adoption of first-party data strategies presents challenges on both the client and account management sides:
- Client-Side Challenges: Understanding & Preparation
Convincing clients to embrace new strategies can be difficult, as uncertainty often leads to hesitation. Demonstrating past successes through case studies helps build trust and mitigate risk concerns. Additionally, ensuring compliance with data privacy regulations such as POPIA and encryption-based transfers adds complexity to first-party data utilisation. - Account-Side Challenges: Measurement & Reporting
Accurate tracking and reporting are fundamental to success. Without proper data measurement, marketing efforts operate blindly. We have encountered numerous clients with well-established ad accounts but insufficient tracking capabilities. Addressing these gaps ensures that campaign performance is effectively analysed, allowing for strategic refinement and long-term integration into always-on marketing approaches.
Conclusion
While the presence of global brands in South Africa’s digital advertising space presents challenges, it also drives market growth and consumer adoption of online shopping. By refining audience targeting, leveraging first-party data effectively, and adopting adaptive digital marketing strategies, local brands can not only compete but thrive in this evolving landscape. As the digital ecosystem continues to shift, those who embrace innovation and data-driven decision-making will emerge as leaders in their respective markets.
