South Africa - OMD

1 A BRIEF MARKET OVERVIEWS outh AfricaContents Basic country facts Key economic trends Key media trends Key legislative trends Overall advertising expenditure Basic media facts TV Newspapers Magazines Radio Cinema On line Media deadlines and key datesSouth Africa Language: 11 Official Languages Population: 46 million individuals Religions: Wide range of religious faiths; predominantly Christian Government: ANC African National Congress (Democratic Government) Unemployment Level: Mar 04 Inflation: 2004 SA GDP: 2004 $ billion Capital City: 3 Capitals Pretoria: Administrative Cape Town: Legislative Bloemfontein: Judicial Key centers of influence: Johannesburg-Pretoria conurbation, Cape Town, Durban, Bloemfontein, Port ElizabethSource: Statistics SASouth Africa Key economic trendsThe South African economy has shown sustained growth over the past decade.

2 Annual GDP of 3,5% Inflation at 3,7% Government inflation target range is 3-4% In 2004 the Rand was globally the strongest performing currency against the US dollar Strong Rand is impacting negatively on export market but is underpinning excellent performances on the JSE (Johannesburg Stock Exchange) Strong gold and platinum prices have stabilised the mining sectors but many mines remain marginal in the long term Unemployment remains at 28% of economically active - job seeking adults Excellent retail trends and highest car sales in 20 years Vibrant informal food and clothing retail sector Positive impact on adspend with projected growth of 8-9% Media inflation will increase on the back of demand to 6-7% South AfricaKey media trendsAfter a decade of democracy.

3 The South African media market has reached a level of maturity in terms of media accessibility and consumption Very little macro variation in media consumption and media expenditure patterns Since the launch of commercial Television in 1978 the medium hasgradually eroded the print media share of adspend Over 40% of adspend is on TV Electrification of middle and lower socio-economic communities will ensure further encroachment of TV into all levels of South African society Increased demand for media space ensures that media inflation remains 1 or 2 point ahead of price inflation Aggressive discounting of the 90s is slowing down 2010 World Cup Football will be the catalyst for further economic growth and investment in the media sector Increasing resistance from central government to the growing use of English as the language of commercial communication to the exclusion of the other 10 official languagesSouth AfricaKey legislative trendsThe general climate is one of increasing interference by government in the advertising and communication sectors The Media Diversity and Development Agency (MDDA)

4 Is a government agency empowered to collect funds, via a levy on advertising (currently from media owners but eventually from advertisers) and to disperse these funds into under-invested media sectors and media owners Government set to monitor advertising investment patterns in order to ensure equitable investment of media funds across all market sectors Any form of tobacco advertising has been banned Increasing sabre rattling from government with respect to the banning of alcohol advertising after 2010 World Cup First health warnings on labels of alcoholic beverages set to appear some time in 2005 Advertising to kids restricted in line with international norms Broadcasters under increasing pressure to meet

5 Licensing conditions in respect of PBS responsibilitySouth AfricaAdvertising Gross Expenditure 2001 - 200412,74213,16611,3289,46802,0004,0006, 0008,00010,00012,00014,00020012002 (+20%)2003 (+16%)2004 YTD (-3 %)Millions Source: Nielson AdexSouth Africa : Advertising Gross Expenditure by Medium 2001 200445%44%44%44%37%37%37%37%12%13%13%12% 4%4%4%4%0%10%20%30%40%50%60%70%80%90%100 %2001200220032004 Gross Adv. Expenditure (%)TelevisionPrintRadioOutdoorSource: Nielsen AdexSouth Africa : Advertising Gross Expenditure Seasonality 2001 - 200402004006008001,0001,2001,4001,6001,8 00 JanuaryFebruaryMarchAprilMayJuneJulyAugu stSeptemberOctoberNovemberDecemberGross by MonthMillions R2001200220032004 Source: Nielsen AdexSouth Africa Inflation by Medium 2000 2004% COST CHANGE ON PREVIOUS YEARNANANANANAINTERNET8,29,79,78,312,2 OUTDOOR45,115,85,50,92,5 CINEMA16,315,38,811,416,8 RADIO7,17,67,19,511,4 MAGAZINES7,89,18,510,07,6N'PAPERS16,315, 38,811,48,3TV20042003200220012000 MEDIUM*Source.

6 Media Inflation , Gov Welfare, HealthBeveragesHealth & BeautyBankingBusiness to BusinessSelf PromotionTravel, Transport & LeisureRetailSouth Africa Top 10 Advertising Categories (Gross) 2004 Billion RandsEvolution 04 vs 03+ 3% : Nielsen AdexSouth AfricaTop 10 Advertisers in 2004 Source: Nielsen AdexSpending in Mil RADVERTISERS 178 Cell C (Cellular Provider)180 Coca Cola (Soft Drink)193 SABM iller (Breweries)195 Standard Bank (Financial)246 Vodacom (Cellular Provider)247 Pick n Pay (Grocery Retailer)273 MTN (Cellular Provider)297 Shoprite Checkers (Grocery)299 Lever Ponds (Unilever)425 Government NationalTELEVISIONS outh AfricaTelevision: Basic facts Number of TV households: Million Terrestrial TV penetration: Million Pay TV Penetration: Million Satellite penetration: MillionNumber of stations by type: Terrestrial: SABC1, SABC2, SABC3 and ETV Satellite.

7 DSTV (33 Commercial Stations) Pay TV: MNET Minimum spot length: 5 secs Maximum spot length: 90 sec Advertising minutage: 8 mins per hour Key booking deadlines: 1 Week PreviousSouth Africa : Television: Average Cost/GRP (30 ) by Month 2002 2004 All Adults (16+)05001,0001,5002,0002,5003,0003,5004 ,0004,5005,000 JanFebMarAprMayJunJulAugSepOctNovDecMont hAverage Cost/GRP Rand200220032004 Source: TransmitSouth Africa Television: Average Monthly Share 2003 2004 All Adults 16+ : TransmitSource: AMPS 2004A6 South Africa Television: Key Stations South Africa TV offers 4 free TV channels of the population receive 37 channels Most are diffused terrestrial and satellite(000 s)

8 410 PrivateAdvertising/SubsMoviesSAction TV413 PrivateAdvertising/SubsHistorySHistory Channel416 PrivateAdvertising/SubsGeneralistSBBC Prime460 PrivateAdvertising/SubsSport HighlightsSSupersport 4468 PrivateAdvertising/SubsMoviesSHallmark52 2 PrivateAdvertising/SubsEnvironmentSNatio nal Geographic604 PrivateAdvertising/SubsSport FootballSSupersport 3665 PrivateAdvertising/SubsSport GeneralSSupersport 2701 PrivateAdvertising/SubsSport GeneralSSupersport 13,200 PrivateAdvertising/SubsGeneralistT, SMNET18,122 PrivateAdvertisingGeneralistT, SETV23,931 PublicTax/AdvertisingGeneralistT, SSABCH ouseholdpenetrationOwnershipFinancingPos itioningDiffusionChannelSouth Africa Television: Spot lengths cost index16616616650"2001331008060 ETV2001331007050 Multichoice2001331008060 SABC60"40"30"20"10"MEDIUM*Cost indexSouth Africa : Top 10 TV Advertisers in 2004 Source.

9 Nielsen AdexSpending in Mil RADVERTISERS83 Glomail (Infomercial)90 Clover (Dairy Product Manufacturer)94JD Group (Furniture Retailer)103 Vodacom (Cellular Provider)105 MTN (Cellular Provider)120 SABM iller (Breweries)133 Coca Cola South Africa (Soft Drink)137 Government National146 Proctor & Gamble (FMCG Manufacturer)211 Lever Ponds (Unilever: FMCG Manufacturer)NEWSPAPERSS outh Africa Newspapers: Basic facts Number of titles: 38 Major Titles Number of titles by type: National daily: 18 Major Titles National Sunday: 8 Major Sunday Papers National weekly: 23 Weekly Titles Regional weekly: 300 Community Titles Major publishers / owners: 8 Weekly reach: Daily reach: Weeklies = among Top End of Market Dailies = among Top End of MarketSouth Africa Newspaper Readership (Net reach)0102030405060708090100 Total16-1920-2425-3435-4445-4950-5454-64 65+Age%TotalMenWomenHousewives*Source.

10 AMPS 2004A6 National NewspapersDailiesDaily Sun301,865 Sold/Subs44,499 Sowetan118,261 Sold/Subs54,054 The Star171,542 Sold/Subs116,640 Die Burger109,513 Sold/Subs74,415 Sunday newspapersSunday Times504,657 Sold/Subs298,620 City Press177,615 Sold/Subs130,680 Sunday Sun172,050 Sold/Subs31,122 Soccer Laduma209,547 Sold/Subs34,262 NewspaperSunday Times LifestyleFree112,320 SupplementsSowetan Timeout118,261 Free54,054 Sunday Times Business TimesFree231,120 Sunday Times ExtraFree37,8004c page Net RatecardCategoryTitleCirculation*Distrib ution*Source: AMPS 2004A6 andAudited Bureau of CirculationSouth AfricaNewspapers: Top TitlesSouth AfricaNewspapers: Top TitlesReachGeographical All Adults (%)*StrengthNational NewspapersDailiesDaily CapeSunday newspapersSunday , WCape, KZNCity , Eastern CapeSunday spa pe rSunday Times , WCape, KZNS upplementsSowetan Times Business , WCape, KZNS unday Times , WCape, KZNT itleGenre*Source: AMPS 2004A6 South AfricaTop 10 Newspaper Advertisers in 2004 Source: Nielsen AdexSpending in Mil RADVERTISERS57 ETV (TV Media Owner)59 Vodacom (Cellular Provider)61 I