MOBILE AD MONEY

Facebook is already popular in Africa but now it needs to build a mobile ad market here

Obsession
The Next Billion
Quartz africa
Obsession
The Next Billion
Quartz africa

Since last September, Facebook has grown its users by 20% in Africa to over 120 million and the vast majority of those users already access the social network from mobile devices.

But unlike in North America and Europe, where Facebook’s success on mobile platforms was the beginning of a rocket-fueled revenue growth which has seen it overtake Walmart in market cap this month, in Africa that popularity is very far from being translated into major advertising dollars.

Facebook’s first quarter earnings for 2015 show Africa and South America generate revenue of just 80 cents per user. Facebook pulls in more than 10 times that amount per user in North America.

 

The challenge for Facebook in Africa is not finding users but rather to develop an advertising model that suits the African context. The challenges here include slow mobile connections, high costs of data that may deter users from viewing ads and watching more video–one of Facebook’s fastest growing features.

Facebook has already started experimenting with strategies to enable advertisers reach users with low-bandwidth connections. The use of targeted ads on feature calls and the “missed calls” feature—which gives users the option to click on ads to get a return call from advertisers—without using airtime or data. This has been piloted in India for brands like Garnier Men and ZipDial, and Facebook plans to implement similar strategies on the continent.

Africa’s mobile penetration is growing but mobile ad-spend hasn’t caught up, said Kathryn Sharfman, managing director of notnorm, a digital strategy agency based in South Africa

“There’s a lot of room to experiment more with mobile ads on the continent. I think most advertisers still view mobile ads as an add-on to bigger advertising campaigns for brands, instead of leading with them.”

Facebook’s newly appointed head of Africa, advertising veteran Nunu Ntshingila-Njeke will be tasked with building, not just Facebook’s business but a more sophisticated mobile advertising market overall, particularly outside of South Africa. Currently chairman of WPP’s ad agency, Ogilvy Mather in South Africa, Ntshingila-Njeke, 51, is a well-known trailblazer in South Africa’s advertising industry. She established Ogilvy Mather in 27 countries across the continent and introducing strategies to empower female employees.

Facebook will start out in Johannesburg, the continent’s financial capital, often pitches itself as the “gateway to Africa” for investors. While the Johannesburg might have some advantage–due to its highly developed economy and infrastructure–other cities elsewhere on the continent, like Lagos and Nairobi, have developed lucrative environments for start-ups, tech-hubs and international investment.

As well as South Africa, Facebook says it will focus on growing its business in Nigeria and Kenya. It will also support territories including Senegal, Ivory Coast, Ghana, Tanzania, Rwanda, Uganda, Zambia, Mozambique and Ethiopia.

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