Digital ads trends in Africa

Posted on March 29, 2017 12:00 am

Africa smartphone growth may have slowed in 2016 but Internet advertising hasn’t and will exceed half of the total African paid advertising market within three years according to the latest market prediction.By 2020 the ad spend on media will be $6bn and that internet advertising, in its various forms such as video, display, search and classified, will represent $7bn.Your blogger is one of those who have urged the media, marketers and their agencies in Africa to push innovation in the face of this major looming disruption. The facts is, Africa has not been as innovative as it need to be.African advertising market by media and shows that in the next three years the big winners will be digital, which is projected to grow by 27 per cent, followed by the much smaller interactive games market.In the television market free-to-air revenue growth is expected to flatline, amid the shift from terrestrial to Internet based Tv, with revenue growing just 2 per cent by 2020.In contrast, pay-TV is projected to grow by 2020 on the back of an expected surge in household penetration.The data paints a more gloomy picture for the print sector. Newspapers are projected to continue their declines, with the report estimating that newspaper ad revenue will fall in three years. Consumer magazines are expected to face a lesser revenue decline. Radio and the out of home sectors are both projected to post positive results with radio growing in three years, while out of home is expected to grow.Data shows that many media companies are facing major disruption to their traditional business models in the coming years, citing the example of newspapers which have seen their revenue go down significantly and it is very clear that un-targeted media supported only by traditional attribution model is likely to lose value.

However, the data delivers a warning to marketers and their agencies that they need to be clearer about what impacts these shifts will have on them.Cleary, it urges marketing departments to look more at identity-chains, person-based marketing, the step beyond segmentation, where targeting is based on the individual.When it comes to ad agencies, the study notes recent controversies over rebates and warns media agencies that as many traditional media find their revenues squeezed or flatlining they are unlikely to give rebates. When you look at the cycle of disruption for media across Africa, it is speeding up and there is trouble everywhere. My advice is for media to focus on delivering have a go and try and bring stakeholders, shareholders and boards with them and ask for investment dollars. Looking at what the traditional television and radio companies are doing with streaming services, or the agencies with brand-funded content, all of these are digitally supported but they represent much more fundamental shifts in business model.However, from my fact finding episodes, and by interacting with dozens of media experts in different parts of the continent, its not all gonna be rosy. There is one thing that always annoys Africa smartphone users when they browses the internet and thats digital advertising. Whether in the form of pop-up ads on various news portals or video ads on YouTube. The feeling I have is that digital advertising will continue to stick to screens as spending for the sector is extensively eating up the share of advertising on television and in printed media, driven by the emerging millennial population and Africa’s ever-increasing number of internet users.

Africa, where 38 percent of the 200 million-strong workforce is categorised as of March 2017 as millennials aged between 18 and 34, is the world’s second-biggest amount of internet users.Television ads will continue to be eroded, overtaken by digital ads.Television and newspapers used to be the biggest recipients of advertising spending, but digital ads are poised to take a larger share, with 40 percent of overall ad spending in Africa by 2020, from 5 percent in 2013, according data in my possession.Digital ads almost tripled in 2016, with the figure expected to soar more than four times by 2020. Local companies big and small are tapping into the huge market that the internet can reach out to for promoting their products. Advertisers in Africa also believe that communicating with consumers through the digital world is significant to build their brands. Advertising through digital platforms is much less costly than through television. Thus, advertisers can better explore creativity in creating advertisements. Even the financial services industry is expanding digital ads, including small banks and forex bureaus. Digital marketing enables advertisers to communicate to millennials through a language they understand and means that are readily accessible for them. These advertisers often deal with media agencies to handle and manage their ad campaigns to be placed on platforms. Essentially, the agencies serve as middlemen for the process. However, even digital companies still tend to veer toward television ads, although their focus on online ads is greater as digital operations are at the companies’ core. Overall, the general trend surrounding advertisements as a whole in Africa is that many still emphasise the importance of television because of the range and scope. For African companies, they have grounded themselves in digital but they also have the need to go into television as well.

Contador Harrison