GroupM recently released its first Africa Media Index, a collaboration with In On Africa, that delved into five factors in each country surveyed: Economy and Business, Media Landscape, Media Consumers, Technology, and Governance and Legislation. In brief, it found the continent’s media landscape was a “whirlwind of change and growth in activity” with power that can be “harnessed by knowledgeable investors”.
“Sub-Saharan Africa hosts 17% of the world population today, but only represents 2% of world GDP, and even less when we look at advertising investment, which is $2.6 billion or 0.47% of global investments. However, due to mobile and internet expansion, strong urbanisation and a booming middle class, the next 30 years should tell a very different story,” it said.
We asked several media companies operating on the continent for their views on where the opportunities lie, what challenges they faced, and what the believe is the next big thing.
JCDecaux’s marketing director of Sub-Saharan Africa, Donald Liphoko, gives his views.
Q: What is your sense of the opportunities available in Africa in the sector in which you operate?
A: Rapid urbanisation and the deregulation of intra-African trade barriers will unlock supply chain and logistics for manufacturers and service providers targeting the one billion people in the subcontinent. Despite media fragmentation and the rise of digital media platforms, out of home media will flourish, as the growing middle class is concentrated in some of the fastest growing cities in the world.
According to McKinsey, 24 million Africans will move to cities each year between 2015 to 2045, compared to 11 million in India and nine million in China. Nigeria alone is projected to add 189 million urban dwellers between 2018 and 2050. Approximately 80% of SSA retail market transactions occur in informal channels, with the highly fragmented West and East Africa retail environment underserved by formal retailers. This is a real opportunity for OOH operators to grow with brands and consumers as they enter the formal retail market.
Q: How are you taking advantage of those opportunities?
A: JCDecaux operates and manages advertising in more than 2 000 premium malls worldwide, and will be offering its expertise to retail property owners and brands. Retail is highly dependent on consumer spending and we have a competitive advantage in optimising retail sales performance using intelligent advertising structures and data analytics.
Q: And the challenges you believe are impacting on your business?
A: Regulation and enforcement of by-laws to protect consumers, advertisers and OOH media owner rights remain weak across Sub-Saharan Africa. This has resulted in the erosion of commercial value for the out-of-home medium in markets where there is high clutter and fragmentation resulting in low advertiser ROI. In this environment, landlords are not able to optimise rental revenues and there is a disincentive for media owners to invest in quality infrastructure.
The lack of outdoor industry association coherence has also hampered the ability of the sector to develop research tools that strengthen our go-to-market propositions relative to competing media types. This is more pressing in light of the unchecked market share inroads of digital media.
Q: What is the ‘next big thing’ and how are you tapping into that?
A: The $80 billion African aviation market is one of the most exciting out of home opportunities, with IATA projecting a 5.1% growth in passenger numbers across the region by 2035. Currently 44% of Africa’s passenger traffic transits through just six countries – South Africa, Nigeria, Ethiopia, Kenya, Tanzania and Mauritius. Newly refurbished aviation hubs such as the 22 million passenger p.a. Bole International in Addis Ababa, and the 6.2 million passenger p.a. Jomo Kenyatta International Airport are redeveloping their retail outlets, hotels, leisure and entertainment zones to commercialise passenger and visitor flows.
Business decision-makers constitute a significant share of passenger traffic and are set to grow as the African Free Trade Area comes into effect. Through implicit testing, JCDecaux’ Airports: Open for Business study proved that business decision makers associate the attributes of successful brands more strongly with business-to-business advertising at the airport, in comparison to B2B advertising in any other media other than out of home. We are gearing our operations to increase our footprint to offer quality advertising environments for this exciting market.
