Africa: Advertising Revenues Will Become a New Source of Digital Revenues for African Mobile Co V2.0

London — The transition to digital revenues among Africa's mobile operators is already under way. Online content and services (like streaming), mobile money and data revenues are all contributing to African Mobile Co V2. Advertising revenues should play a much bigger part in this transformation but the mobile operators are up against the global social media networks. Russell Southwood talks to Donald Mokgale, CEO, Out There Media (OTM) Africa about how it can help mobile operators connect with brands.

In September last year, Donald Mokgale left leading ad agency, Carat South Africa, to become the CEO of OTM Africa. OTM started working in Africa in 2019, seeing the mobile first continent as fertile ground for expansion.

OTM started in European markets based on seeking to answer a simple question:"Why don't telcos get the same ad spend as Facebook or Google? There was no seamless marketplace to buy ad inventory." OTM Africa sees telcos as having 2-3 times the number of users in each market:"We'll fill that gap." For example, MTN has 25 million customers in Ghana, three times the number of Facebook users."

The platform OTM Africa provides, Mobucks:"essentially pulls anonymized subscriber data into various buckets." These 'buckets' include: gender, age, location, ARPU level, device type, OS type and pre and post paid:"That's what we use but we can entertain meta data requests. We can dig out the data that will help a particular campaign. For example, Spotify was able to target those that had accessed a Spotify link to carry out a campaign to increase its number of users."

In terms of revenues, the brands pay OTM for the campaigns and then it pays the mobile operator:"They take the lion's share." Brand campaigns so far have involved international names like Procter and Gamble, Coke, Unilever, skin care company Beiersdorf and banks and ad agencies:"We are working closely with agencies to understand demand... .It's a new platform for most brands and they want to trial it. It's especially difficult with agencies as the default setting is to go with what you know."

Currently, it is live in Ghana, Nigeria and South Africa. It is working with MTN to expand into the rest of its markets by 2022. In South Africa it is live across both MTN and Vodacom and in Nigeria MTN and 9Mobile:"The MNOs are relaxed about serving ads across more than one operator."

It is in discussions that are in various stages with other mobile operators including MTN. To widen the use value of the platform, it will be launching a Mobucks for SMEs on a self-service platform similar to Facebook or Instagram.

The ads can be delivered in several different formats: targeted SMS messaging to an opted-in database, a rich content service ("MMS on steroids") delivering video, a payment gateway and chat bots, an ad alongside the Please call me message and display banners. It claims good conversion rates. First Bank Nigeria used it to promote lead generation for an insurance product, getting a 12% Click-Through-Rate.

I asked Mokgale to estimate the share of digital as a percentage of total ad spend. He estimated 10-12% in DRC and perhaps as much as 15% in Nigeria. Overall, he estimated that across Africa there was around US$1 billion of digital ad spend: "The biggest markets - like Nigeria and South Africa- are the lion's share of that number." Mobile companies only need to acquire a portion of that pie to make a difference to their bottom line.

In Brief

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