AFRICAN ONLINE ADVERTISING MARKET SET FOR MEDIUM-TERM GROWTH
16 February 2001
Online advertising in Africa is in its infancy and the collapse of internet advertising markets elsewhere do not bode well for its future.
Robin Parker argues that this is a short-term view and that despite wider problems of connectivity savvy advertisers will increasingly use web advertising to reach high-spenders across the continent.
Web-based media are enjoying the dubious benefits of an internet advertising "Arctic freeze" internationally and while negative sentiment regarding online companies is depressing marketers enthusiasm for the medium as a communications channel, a quiet revolution of understanding is taking place on the African continent.
While the dominant southern market of South Africa is still grappling with how to effectively use and measure internet media activity (and to earn money from it), the negative of limited connectivity on the continent is delivering up opportunities to multinational advertisers who are long past the pain threshold of measuring media success online.
The rest of the continent is characterized by fragmented media offerings, reaching broad markets and supported by largely unsubstantiated research documents. Media buying here is more akin to crystal ball gazing than any science.
There is neither a pan-African opportunity in radio or television that will adequately support the desire of multinationals to reach a niche, discretionary audience continent wide without the onerous burden of high media costs (pushed even higher by unscrupulous media owners who load price at the whiff of a global player).
The African internet media is fast filling this gap after attracting a high quality, frequent audience. The audience is characterised by its comparative personal wealth and by its ability to direct discretionary spending in businesses. They are an attractive audience to the world’s large software and hardware suppliers, bankers, airlines and hotel groups.
This has seen a fundamental shift in the way in which these companies now spread their message to qualified audiences. The advertising model is a discredited one. It died along with dot bomb events of late 2000.
Twenty-first century global brands who are keen to grab a slice of the income of wealthy Africans and their companies are looking to own sections of major sites which have a frequent and loyal relationship with their users and are able to produce information to support this. And while ad banner click through rates have risen for the first time in months according to the latest Nielsen survey, the wily operators are converting their ad-dollars to direct ownership of audiences created by new economy brands.
They realize the online consumer is relying on the online brand to provide the service and by entering into an alliance they are able to position themselves effectively in this audience’s mind at much lower costs than through traditional methods.
While online ad spend will continue to decline - fed by negativity and a worldwide decline in overall ad spend across media - those who recognize the value of the client base will be diverting their dollars into an online ownership programme where client acquisition is quick, friendly and manageable.
This change is supported by the high level of knowledge of web media and online strategy exhibited by marketing companies in the major capitals.
They recognize that pure banner placements are part of a more elaborate strategy to capture users and work closely with online media owners to achieve their aims. They are net savvy, creative and keen. For many of their southern counterparts, the business as usual approach - death by online advertising alone - will mean they can expect to attract less than a third of the income this year than they enjoyed two years ago. This will lead to the most dramatic online media shakeout on the continent - mark my words, some of South Africa’s big players will stumble and fall in 2001.
On the rest of the continent the input from global companies - who have lengthier experience of internet marketing than the South African operations - and African online initiatives focused more on global experience than green fields events will see a new model developing that could rival the SA market in size before end 2001.
These companies will also seek a share of the South African market and could unseat several of the major players by offering a more targeted environment with real benefits to the marketer. Online placement will seek to reach out with greater width than is currently the case and the net, as a marketing channel will start attracting its far share of ad dollars but in a different guise to what many are used to.
Once those 30 plus advertising agencies in South Africa responsible for Africa-wide media budgets become aware of the benefits of the African online niche anticipate some real African success stories to rival those of the Continent and United States.