Over the past five years digital marketing has come to play an important role in Nigeria’s advertising industry. For local brands, ad platforms and strategies that target internet and mobile handset users are considered an integral component of an effective ad campaign. According to InMobi, a multinational digital advertising and research firm, in the first three months of 2013 mobile advertising impressions in the country grew 22.4% – the fastest rate in Africa, ahead of both South Africa (14.4%) and Egypt (9.6%). Companies in a wide variety of sectors – from banking and telecoms to fast-moving consumer goods and alcoholic beverages – are driving demand for online advertising, with the goal of reaching young, affluent and middle-class Nigerians, who are considered a key demographic. Home to the largest population in Africa, with internet user growth around 30% annually, according to the Federal Ministry of Communication Technology, the digital advertising segment is expected to continue expanding.
ACCESS TO NEW MARKETS: The expansion of digital advertising in recent years is a direct result of rising internet penetration rates throughout Nigeria over the past decade. According to data from the UN’s International Telecommunication Union, as of the end of June 2012 an estimated 28% of Nigerians had access to the internet, up from around 16% in 2009 and less than 3% in 2005. The country is home to over 50m internet users – the largest connected population in Africa – a substantial number of who are young and upwardly mobile, highly sought after features in advertising.
“Companies that rely on the youth market are heavily involved on the digital side,” Feyi Olubodun, head of strategic planning at Insight Communications, a major local advertising firm, told OBG. “An estimated 20-30% of total ad spend among telecoms companies, for example, currently goes toward digital advertisements.”
According to forecasts by the US-based GroupM, the world’s largest advertising media firm, the digital segment is expected to account for around 20% of global ad spend by the end of 2014, up from around 14% in 2013. While firm data on the Nigerian advertising sector is unavailable, GroupM estimates that annual above-the-line spending on advertising is around N120bn ($756m), up from N102bn ($642m) at the end of 2011, for example. Major contributors to digital ad spend in Nigeria include the aforementioned telecoms firms, which have a major presence in all areas of the advertising market; food and beverage firms, including the carbonated soft-drinks segment; and the beer and spirits industries, all of which consider Nigerians under the age of 35 to be their target audience.
NEW PLAYERS & TECHNIQUES: Digital advertising in Nigeria encompasses a variety of strategies, platforms and techniques. The segment aims to place banner and text ads on popular websites, while a number of local firms also offer additional services, including ads or ad platforms that operate within the interfaces of mobile applications, or more directly via SMS. Social media is increasingly seen as a key market as well. A number of brands are very active on social media platforms, including Guaranty Trust Bank; online retailers Konga and Jumia; and mobile telecoms firms MTN, Airtel, Etisalat and Globacom.
In addition to the established ad agencies, rising demand for digital content has resulted in the establishment of a handful of new firms. The Nigerian digital marketing service, HotSauce, which was launched within the past five years, provides marketing, consultancy, content creation and implementation services across web, mobile and social media platforms for clients like Samsung Mobile and the SevenUp Bottling Company. Meanwhile, in 2011, Oduntan Odubanjo, a local entrepreneur, established Twinpine, which offers digital services to firms throughout Africa, including to well-know computer manufacturer HP and Airtel. Similarly, Wild Fusion, which was launched in 2010 by local entrepreneur Abasiama Idaresit, has become one of the largest digital media sales firms in Nigeria, with revenue in excess of $1m in 2012. In 2011 the firm became the country’s first Google Certified AdWords Partner.