Wednesday, July 8, 2009

S. Africa - Land of Opportunity

S. Africa is considered the fourth fastest-growing mobile communications market in the world. It has witnessed a huge success in the adoption of mobile communications, and also in the acceptance and growth of mobile advertising. The secret behind this tremendous success lies in the inherent behaviour or the market, including social and economic factors.
If we examine the success of S. Africa closely, some interesting facts emerge. Firstly, mobile penetration in S. Africa outnumbers PC penetration by a ratio of 2:1. Credit has to also go to S. Africa’s highly progressive user base, which has adopted the mobile Internet in a huge way. Mobile data usage is encouraged by the competitive operator market, which provides low-cost Internet access. In fact, S. Africa recently witnessed a whopping 90% cut in data charges, with the average now standing at approximately 2 Rand/MB (£0.16). In all, the favourable ecosystem, working in tandem with the competitive market, provides the right environment for the growth of mobile advertising.

Market insights
This market has shown some unique trends that create a good mobile advertising opportunity for publishers and advertisers. The number of publishers in S. Africa is significantly lower than the number of advertisers. The reason for this boils down to a simple supply and demand phenomenon. The user base in S. Africa is more inclined towards international sites rather than local sites. Over time, seeing the successful adoption by users, the number of local advertisers began to grow at a fast pace. The increase in the number of international publishers was much slower. This resulted in a large number of advertisers compared to the number of publishers, creating a high demand for publishers in the market. The outcome of this is high cost-per-click (CPC), giving publishers opportunities to generate high ad revenues.
At mKhoj, we strongly believe that in S. Africa, publishers stand to gain from the advantages of early adoption, such as lower competition. We have seen our partners have a great experience wiuth their mobile advertising campaigns, due to the high monetization capabilities of the S. African market.
From an advertiser standpoint, though the industry standards demand a high CPC, the customer usage helps to maintain the profitability levels and justify the investment. The user base is very content download-friendly. In fact, in the month of May, 85% of our network traffic from S. Africa was driven by content downloads.

Useful services

We believe that the services that are valuable to S. African mobile users will be the ones that are useful, simple, uncomplicated and easy to use. They will make users’ lives easier, or give them access to services that were previously unavailable or too expensive.
Over the past couple of months, the mKhoj network has seen a tremendous growth in mobile Internet traffic in S. Africa. Mobile advertising in S. Africa is being demystified. The time for advertisers, agencies and publishers to capitalize is here.

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