People, traffic and billboards: Out of home in Africa

We have half jokingly described African cities as having three key OOH elements in common: people, traffic, and billboards. A little simplistic but this presents great opportunity for brands, agencies and media owners. Daniel Steyn gives a practical guide to the African market.

The market

Kenya is the largest economy in East Africa, and one of the fastest growing worldwide, with high literacy levels thanks to free primary education since 2003. Availability of accurate and up-to-date OOH data is limited but estimates put the total traditional outdoor advertising market value at US$33.3m, of which Posterscope has a 14% market share. Under and non-measurement of other forms of OOH, similar to South Africa, means the overall integrated OOH market is potentially double this. Notable Posterscope campaigns in the Kenyan market include the first 3D building projection and the first building wrap.

On the western side of the continent, Posterscope Nigeria officially launched in late July this year. Similarly to Kenya, availability of accurate and up-to-date OOH data is limited but estimates put the total traditional outdoor advertising market value at US$105m, of which Posterscope has a 4% market share. In Nigeria the top ten brands account for half of traditional outdoor advertising market spend, four out of the top five are telecoms, while beer brands are very well represented in the top ten.

International media owners are well established in African markets: Alliance Media is active in 23 African markets, Global Outdoor Systems is active in 21 African markets. Continental Outdoor Media, South Africa’s largest media owner, is active in 13 other African countries. Their acquisition by JC Decaux, the largest media owner globally, should come as no surprise. In comparison local media owners can’t be ignored either. For example, Magnate Ventures in Kenya reportedly operate a third of all billboards in the country.

While integrated and innovative OOH is now beginning to establish itself in neighbouring African markets, it would be foolish to think these markets are not advanced or sophisticated in their own way. Digital OOH reportedly accounts for 25% of OOH spend in Nigeria, and the sheer scale of some of their OOH opportunities in Lagos is impressive: 12m x48m and 20m x 30m respectively. Similarly in other markets, digital OOH screens are in place at both roadside and point of sale.

The opportunity

The scope and scale of the opportunity north of South Africa, especially in Nigeria and the East African Community (Burundi, Kenya, Rwanda, Tanzania, and Uganda), has been well documented. We’ve seen global brands extending their footprint and battling for market dominance; local brands emerging as regional challengers; agency groups steadily investing in these markets via acquisition and development. All while local and international media owners in the traditional outdoor advertising space, who saw the opportunity early, benefit from market growth.

Unprecedented market growth, against a backdrop of a global economic slowdown, is driving urbanisation and the emergence of a middle class with disposable income which has facilitated the large scale investment in civic infrastructure like public transport systems, intermodal transport nodes, airports and shopping malls. Key urban trends influencing OOH are emerging:

Economic growth and urbanisation is changing consumer travel patterns and shopping habits.
Shopping mall culture is becoming a part of everyday life in the major urban hubs.
Public transport infrastructure is being formalised and developed.
Electricity supply is becoming more reliable, making new technologies more viable.

Traditional outdoor advertising and billboard opportunities have reached a level of saturation and stagnation. Changes in consumer behaviour and the decreasing costs of interactive and digital technologies sees media owners diversifying their portfolios and new OOH opportunities emerging e.g. roadside and point of sale digital screens, transit and shopping mall specific media.

As the emerging middle class moves into the secure bubbles of upgraded public transport, commuting in their own vehicles, airports and shopping malls – it becomes harder for brands to reach them and compete for their consumer spend. This creates demand and opportunity for OOH in these spaces. An exciting prospect given the level of mobile and smartphone adoption in these markets.

Local market expertise

Knowing and understanding how and why markets are suitable for developing business opportunities is important but not a real start. There’s no substitute for in-market experience and expertise. You need to roll up your sleeves and get involved, or work with people who’ve done the hard yards already.

One of the key points of difference that Posterscope operates from is that of better understanding the consumer and their context. It’s therefore crucial that we have experienced and knowledgeable people on the ground in key African markets who understand the intricacies of their market in detail. Relevance, innovation and creativity are centrally important when communicating with the connected consumer. Local insight then becomes critical to delivering effective and engaging OOH.

Local and in-market expertise is crucial to understanding the market status quo and standard business practices. Strategy and planning teams must be able to advise clients on the best course of action with respect to consumer insight, suitable opportunities, innovation, regulatory environment, payment terms, fee structures, timelines and reliable in-market service providers.

This means our Sub-Saharan office based in Cape Town under the direction of Bruce Burgess, works closely with and relies on the Posterscope teams in Lagos and Nairobi under the leadership of Dan Oshodin and George Mugendi respectively. Without them, we’d be lost in a sea of opportunity.