#AFRICA – Inside the Continent’s New $14bn Social Media Industry
June 30, 2014
A decade ago, most Africans would never have thought that an individual could bring a corporation to its knees in just 140 characters. But in June 2012, Japheth Omojuwa, an economist by training who has become a prominent Nigerian political advocate and social media personality, went to battle over an iPad lost on a flight with Arik Air, Nigeria’s largest indigenous airline. Omojuwa won. Like David fighting Goliath, he used a simple and underestimated tool – launching the “#ArikWhereIsMyIpad” trend from oneof his social media platforms – a Twitter account with over 100,000 followers. Other Arik Air passengers sympathetic to his plight used the same hashtag (#) to narrate their own experiences losing valuables onboard Arik Air flights. The resulting social media campaign damaged the airline’s reputation and ultimately led the company to suspend its Twitter account. “It eventually became popular offline but it was because it became such a dominant campaign on social media,” said Omojuwa of his efforts. Social media – a set of internet-based applications and websites that allow users to communicate directly with friends and strangers alike – are increasingly changing the way business is conducted in Africa. Social media is modifying the way businesses relate to each other and their customers in areas from customer relations to entrepreneurship, content development and marketing. Their impact on the African economic resurgence narrative has been nothing short of exponential. “Lions go digital: The Internet’s transformative potential in Africa,” a 2013 report by McKinsey & Company, places the continent’s iGDP – or internet contribution to GDP – at $18 billion. According to the 2014 “Emerging Nations Embrace Internet, Mobile Technology” report by the Pew Research Global Attitudes Project, approximately 78 percent of internet usage in Africa is for social media. This lays the foundation for Africa’s estimated $14-billion social media industry. With the internet expected to contribute a minimum of $300 billion to Africa’s GDP by 2025, social media could contribute almost $230 billion to Africa’s remarkable growth by that time. The internet has witnessed a sustained increase in adoption rates in Africa, with penetration currently pegged at 16 percent and more than 167 million active users across the continent. “Broadband capacity has probably quadrupled, in the last five years,” said Obi Asika, founder of Dragon Africa, and CEO of Storm 360, a Nigerian entertainment company. He attributed most of the increase in internet access to an influx of new and better mobile technologies. “Mobile internet access is now really what’s the key driver,” he said. But Asika considers the inflection point for the adoption of social media in Africa difficult to pinpoint. “You have to go back to Nairaland, back to the early chat rooms,” he said, naming a Reddit-like online community founded by Nigerian Seun Osewa in 2005. For a continent that has experienced its fair share of censorship and surveillance during long periods of rule by dictatorships and military regimes, social media is a refreshing and important tool. Said Tolu Ogunlesi, a renowned Nigerian political commentator and journalist with over 61,000 followers on Twitter: “In the early 90s, the government took control of almost everything, but now social media has changed everything. People have been able to speak up and pursue causes against governments.” #Reshaping Engagements That social media has become a powerful tool for political and social causes became obvious in Egypt and Tunisia during the Arab Spring and during the 2012 Occupy Nigeria protests. But African businesses and brands have also taken note of the communicative power and increased reach social media can give them. “I think social media is simply new forms of engagement by individuals and brands and organisations creating and utilising technology to create new platforms for engagement and to share,” explained Asika. Michelle Atagana, the editor of Memeburn, one of South Africa’s leading tech blogs, believes that social media in Africa grew in influence alongside blogging. “For Africans, in terms of getting online, I would say maybe in early 2004 and 2006, that was the emergence of blogging,” she said. “If you want a magic period, I’ll say 2008 to 2009.” Jumia is the leading e-commerce business in Africa, with operations in Nigeria (Africa’s largest economy), Kenya, Egypt, Morocco, and Cote d’Ivoire. Social media networks generate 20 percent of Jumia’s daily traffic. “Because e-commerce was a new idea, we needed a platform that would spread the word quickly, where people would hear and learn about it quickly, so we used social media to do that,” Opeyemi Adetomiwa, one of the online retailer’s social media representatives, explained. “At the beginning, people did not really know about e-commerce but through social media, we were able to increase traffic and awareness about the brand, thereby increasing sales too.” Other e-commerce start-ups such as Konga and Kaymu have also used the strategy. Despite Africa’s relatively low internet penetration, these online operators are now competing with brick-and-mortar retailers. Even financial institutions such as First National Bank (FNB) – one of South Africa’s largest banks – and Nigeria’s Guaranty Trust Bank are also rolling out technology- driven services on social media. Guaranty Trust Bank, arguably one of the best-known brands in Africa and one of Nigeria’s larger banks, has leveraged social media networks to reach out to potential customers. In 2013, the bank launched its social banking platform, which enables access to services like opening and managing an account via Facebook. In the same vein, South Africa’s FNB has exploited the widespread usage of Mxit, a South-Africa-based instant messaging network with over seven million active users. The bank partnered with Mxit to push FNB Moola+, a fusion of its eWallet solution and Mxit’s mobile-money offering, to South Africans. In the world of traditional retail, South African firm, Urban Hilton Weiner, created one of the world’s top social media campaigns of 2013. The retailer gave visitors to their store a $10 coupon if they tweeted a selfie of themselves trying on clothes and used the hashtag #urbanselfie. The campaign helped the retailer get more people into its stores and increased visibility for its merchandise across social media platforms. The massive consumer response and reaction to social media campaigns has made organisations more careful about using these media to efficiently manage their brands. “It is creating a new wave of change in the advertising industry,” said Abasiama Idaresit, managing director and founder of Wild Fusion, a digital agency with operations in Nigeria, Ghana and Kenya. In marketing, active engagement via social media channels is winning out over static, unidirectional advertising. “Social media is a technology-driven platform that enables two-way interactions between two people. It could be between one person and another, and it could be between a brand and a group of people,” he said. Abasiama noted that the web used to be a one-way channel where content producers put things out there for the consumers without getting feedback on the quality and timeliness of the content, though times have since changed. “The user now has a voice. The consumer has a voice, and they can talk back to the people talking to them. That’s the very essence of social media; being able to connect, interact and being able to have that two-way communication with people,” he added. Allan Kamau, an associate director in the Kenya office of Portland Communications, a global consulting firm specializing in brand and image management, agrees that companies now see social media as an important channel for communicating with customers. “Consumers are also using the social media as a way of finding out more information about brands. For example, here in Kenya, the power goes out – I’m sure the same thing happens in Lagos – [and] everybody jumps onto Twitter to complain. It is a direct way of speaking to companies, finding out more about brands, but also for companies to communicate with their customers,” he said. “It is becoming a mainstream way for corporations to talk to consumers but also for them to listen in to conversations so that they know what consumers are thinking about and what some of the concerns they have around different brand issues are.” Customers often use social media to express loyalty to their favourite brands and distaste for their least-liked ones. Indeed, many social media users will only follow brands they love or that they want to criticise. Brand experiences are shared on social networks, with 41 percent of those who do so admitting they hope to receive discounts in exchange, according to Nielsen’s 2012 “State of the Media: Social Media Report”. The report also noted that 25 percent of social media users take to social networks to punish companies for poor services. Negative comments can have a more damaging impact than brands realise. While positive news can spread quickly across social networks, increasing a company’s recognition and presence, negative talk can spread 10 times faster. “Customers are talking about you online, whether you like it or not,” said Adi Bittan, co-founder and CEO of ownerListens.com, a firm that manages customer-brand relationships. Listening to what these customers say can help businesses avoid blowback from unsatisfied patrons in the future. “If no one is listening or acknowledging customer posts, customers assume you don’t care,” Bittan said. Jumia’s Adetomiwa shares this sentiment: “Social media forces service excellence among corporate bodies and drives innovation. It helps corporate entities to be creative about their product and that way creates customised products for the customers.” #Content, Jobs, Cash The abundance of social media platforms and their round-the-clock nature has also forced businesses to constantly push out content to their consumers. In return, content has proven to be one of the major drivers of growth for businesses that use social media. “If you have something of value to add to a market, to an industry or to consumers and you share that value with people, you can become very influential with people,” said Mike Saunders, CEO of South African digital marketing company, Digitlab. Stressing the importance of content in Africa, Saunders added: “If content is king, then mobile is your messenger and mobile is the way by which the content gets into the hands of people.” Asika agrees, asking: “If you build all the networks and platforms in the world, what are you going to put on them?” The quest for content creators and managers to help companies navigate this new environment has given rise to a fresh breed of entrepreneurs and corporate employees whose job is to enhance the brand image of companies on social media. Large corporates and small startups are all investing in social media executives who combine an understanding of content creation and cultural trends with a knowledge of ever-advancing technology. In South Africa, a social media executive can expect a salary of around $16,000 a year – almost 40 percent higher than the country’s average per capita income. In Nigeria the figures are similar. Social media is not just creating jobs; it is also making it easier for job seekers to find positions through online networks. Before the introduction of LinkedIn, job-service networks were largely limited to basic recruitment services. Ken Okolo of the African recruitment firm Regus notes that the sector is now facing an evolution sparked by social media. “Even speaking at NigeriaCom last year, which is a big telecom conference globally – how was I invited to be a speaker? Someone checked my profile on LinkedIn from England and gave me a call,” he recounts. “I have no clue who this person is, but they are calling me for a conference that [they] would hold in Nigeria, that was organized from England.” But the real winners of the future are likely to be the social media entrepreneurs who have managed to turn their profiles and platforms into money-making machines. Nigerian model, blogger and social media personality Linda Ikeji said in a 2012 radio interview for The Beat FM that she charges $3,800 for a monthly banner advertisement on her blog. To have an advertisement as a background on the blog costs $9,100 per month. Her blog’s 1.56 million monthly visitors are an attractive target for multiple brands. Furthermore, Ikeji actively engages over 300,000 followers on Twitter, a platform that only helps to increase her sway with businesses looking to advertise. Google’s video-sharing site, YouTube, has a monetisation scheme that has also birthed a new group of entrepreneurs. “nktvkenya” the YouTube channel of Kenya’s publically traded Nation Media Group, has the highest number of views of any You-Tube channel in Kenya, according to Social Blade, a website that monitors YouTube activity. As of Monday, 31 March 2014, ntvkenya had over 155 million views, raking in $15,300 to $127,100 in annual earnings. On that same day, South Africa’s deedlebag had over 145 million views, with estimated earnings of $8,300 to $68,800. Egypt’s Melody Music makes between $127,700 and $1.1 million annually from its “MelodyTvgroup” YouTube channel, with over 650 million views. The company’s second channel boasts over 597 million views and makes between $726,600 and $6.1 million for the company. For the new entrepreneurs, the kind of content they produce and distribute matters greatly. As an increasing number of Africans across the continent gain access to social media, the demand for original African content increases. “Africa needs to create its own content because Africa needs to grow itself,” said Saunders. A forward-looking Asika, who noted that everything in the world, from business to movies, mythology, history, culture, music and arts, is a potential source of content, echoed his words: “You have to go local to go global. What is the difference between Sango (a deity representing thunder in traditional Yoruba religion) and Thor? The difference is $3.5 to $4 billion! It’s not just packaging. The god Thor was celebrated and idolised, made an icon by people who extracted the mythology and brought it to popular culture and then flipped it to the TV and then to the movies and merchandise. And that’s the difference.” #Not There Yet? The widespread adoption of social media is not simply an issue of creating more local content. “The world is a stage where with the internet, people can do whatever they want because it gives them power, opportunity and space to be creative and free,” said Atagana. “The challenge, however, is that as much as we are growing very fast and getting into this tech phase very intensively, there aresome basic [issues] and education issues that we face and this can hinder us from reaching the path to what is next.” For instance, Okolo believes Africa’s poor information communications technology infrastructure is a main impediment to the wider adoption of social media on the continent. “We are working on an interview technology platform in Nigeria. As a recruiter, I have a set of prepared questions I have imprinted into a platform and I send you a link. At your own time, you answer these questions,” he explains. “Unfortunately, we literally have to babysit some people on how to answer these questions because everyone kept complaining, ‘I couldn’t open the link!’ or ‘I couldn’t open the site!’ Everything came down to one thing: the state of internet infrastructure in Nigeria hasn’t gotten to the point where it can reasonably support this kind of technology.” This infrastructural gap will only close with significant, and continuous, investment. “You can never have too much infrastructure,” said Wild Fusion’s Abasiama. “The infrastructure you need to deliver on internet penetration will always be required.” He thinks that though there are certain spots of fair internet connectivity near the coasts, the most important step is laying fibre-optic cables to extend internet accessibility further inland. #The Next Trend Africa is poised for a mobile explosion. “In a couple of years, I see penetration spike,” Wild Fusion’s Idaresit said. “I see that devices are going to get smarter and prices are going to drop. We’re going to have more bandwidth and more people are going to get connected and online.” The resulting effect will be a massive disruption of conventional business models and interactivity. “People barely watch TV anymore in Europe, America. They watch YouTube,” added Obi Asika. With increased mobile penetration expected to lay a foundation for a social media revolution in Africa, usage will skyrocket, and local platforms and content will also blossom. “Let me paint a picture for you,” Obi Asika said with an almost palpable excitement. “Facebook has about a billion people on it, and they just acquired Whatsapp, which adds about 500 million people with phones. Let’s presume that in another year Whatsapp will have about a billion subscribers. I don’t think it’s an outrageous assumption if we just integrate the two.” He continued: “You’re a filmmaker. The big objective is for your movie to be released [at] the US box office because it’s the biggest market. Do you think it’s possible that in the next three to five years, the biggest objective for filmmakers will be to release on Facebook?” To put his words in context, Africa is projected to have the largest working population of any continent by 2020 according to a 2012 report by Euromonitor International. With the steady rise of its middle class and increasing income levels, internet usage across the region will only increase, making it potentially the largest social media growth market in the world. Businesses ought to take note: Africa is trending, and they should definitely follow. *Source Ventures Africa]]>
Nkemnji Global Tech
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