Here’s Why Mobile Ads In Africa Are Worth $1.3 Billion

The mobile sector in African countries is growing rapidly. Consumers don’t need smartphones to access bank accounts, send money or even get medical advice, since these services are more available through regular cell phone networks. Consequently, a market for mobile advertising via text message and other means has been developing fast – especially in a place where households may be more likely to have a cell phone than a computer.

Research from Gartner shows that the global market for mobile advertising will reach $18 billion in 2014, and grow to $41.9 billion just three years later.

Though Africa represents a small section of this, the growth rate will be startling.

“Africa is a mobile-first continent,” said Candice Goodman, chair of the Mobile Marketing Association of South Africa, to the The Financial Mail.

“The market here is very different to other continents and the challenges we face,” she added.

According to a report from research firm Informa Telecoms and Media, African telecom firms specifically will generate $1.3 billion in advertising revenue by 2016 through ads in text messages, mobile apps and downloads. As of June 2013, there were 778 million mobile subscribers on the continent.

“Mobile advertising is not a big component of total advertising in Africa, but it’s really going to spur this year,” said Yaron Assabi, founder of Digital Solutions Group, an online media firm, to CNBC Africa on Monday.

He explained that since many consumers don’t have household computers, the most valuable digital advertising will come through their cell phones.

“Mobile has the highest reach,” he said.

“It’s almost as if Africa’s leap frogging across the Internet through their mobile device because we didn’t have personal computers and desktops proliferation like the rest of the world,” he said, adding that these advertisers have the added benefit of knowing a person’s location, which will help them with consumer research and target content accordingly – unlike with television or traditional online ads.

Experts are urging companies to start focusing on this kind of marketing in the future.

Most businesses opt to spend budgets on traditional desktop-focused campaigns and not enough attention is paid to the mobile market,” said Ross Hellinger, sales and marketing head at Incubeta, a South African media company, to The Financial Mail.

There are just a few major mobile advertising companies acting on the continent, but more will surely follow.

For example, TwinPine is a Nigerian startup that launched in 2011 and already has partnerships with Nokia, Google and Pepsi, along with other local companies.

Last week, the company announced a new partnership with MTN Nigeria to provide advertisers a chance to serve content through “MTN Play,” the telecommunication company’s mobile portal.

“Being an indigenous mobile advertising network, we have the advantage in that we understand the local market and can better help brands to reach their target audiences,” said Elo Umeh, TwinPine’s managing director, to ITNews Africa.

For instance, more than 74 percent of TwinPine’s mobile advertisements are on feature phones, not smartphones, which are more common and affordable for average consumers.

Last year, the company reported it surpassed its own target for monthly “impressions,” reaching minimum of 500 million ad impressions monthly.

“Our successes in our first year of operation are testament to our bespoke approach to mobile ad campaigns,” said founder Elo Umeh to HumanIPO, adding that they sought to enable publishers to increase converstion rates and “make the most of mobile.”