Just how many internet enabled mobile users are in there in SA, and how does this compare to the rest of the world?
According to the AMPS 2012AB report released by the Mobile Marketing Association, 50% of SA cell users were internet enabled. By my extrapolation of the South African AMPS 2013B report, only around 42% of mobile users are smartphone users, decreasing to 22% when talking about the lower to mid income adult mobile user in SA.
We are like the rest of the world with high cell phone penetration rates, but we, like other developing markets, are different in what phones we are using, ie more feature phones that smartphones than the rest of the world.
But it's not only about what phones people have, but about the cost of airtime and the 3G coverage that determines if and how South Africans connect to the Internet from their mobile phones, whether they are smartphones or feature phones.
There are approximately 20 million mobile phone users with devices capable of accessing the internet. About 6 million of these could be considered "feature phones" and would use a WAP browser to access built-for-purpose mobi sites and about 14 million (including legacy Blackberry devices) could be considered "smart".
The total mobile phone population is equal to about 33 million unique users therefore total mobile internet penetration is + 60% of the mobile phone population and smart device penetration + 42%.
The percentages above are by far the highest in sub-Saharan Africa and compare very favourably with most other middle-income countries. They do however significantly lag most high income developed markets, where smartphone penetration is already typically above 75%.
This is a relatively simple question, but the answer is much more complex than one would expect. There is actually no conclusive answer to this question for South Africa. This is mostly because of the complexities of how mobile inventory is measured and the technology available to support this. Most mobile internet inventory on the supply side either has no measurement tool implemented, or is only measuring smartphone inventory. This gives the marketing industry a very skewed view of possible potential. On the user side there are a few great reports giving insight. In a recent report by GSMA, they quoted that globally mobile internet penetration has reached over 100% on all other continents. In Africa, we have reach of 60%, so there is still growth potential.
Currently mobile internet penetration is a staggering 47.8% more than fixed line internet penetration in Africa. Of all connected users, 39.3% of them have 3G penetration. What this illustrates is the large audience that still only has a 2G connection. They also forecast that our data speeds will increase by 89% by 2017, the fastest growth globally. This will contribute to more mobile internet users with better data speeds. Marketers need to not rule out the power of creatively reaching a user on their handset without a data connection.
For several years, the question of how many South Africans use the Internet from their cellphones has been veiled in controversy, with claimed numbers ranging from half a million to 15 million.
These numbers are tricky to report when taking into account the heavy data costs in SA. Although people may have WAP-enabled phones that have the capacity to connect to the internet, it's no guarantee they actually do - although there may be millions of WAP-enabled phones in SA, we imagine only a portion actively connect.
Looking globally, according to Statista.com, by the second quarter two 2016, mobile internet users in the UK will be at around 43 million, 94.6 million in Brazil and 16.9 million in Argentina.
Mobile Web usage in Africa and Middle East still remains one of the highest globally at a massive 92.7% (2013) of the population who access the internet from their mobile phone. According to eMarketer, this figure is expected to rise to 94% for 2014, so it's no wonder South Africa's emerging mobile market remains at the forefront of everyone's minds.
Whether it be media, marketing or communications, mobile is recognised as an important device to stay connected. Depending on how you define mobile web users, whether they are active users or not, recent reports on numbers can vary around 18m-20m. In terms of web browsers, according to StatCounter, Opera Mini still dominates in SA and Africa with their market share exceeding both Blackberry and Nokia. The cost of data most definitely has a very important role to play. With broadband so costly, it's not surprising that over 92% of internet users are mobile and with Opera Mini's data compression making it extremely cost effective for internet users to access the mobile web, we can expect to see the growth curve for mobile usage rise even more for 2015.
According to the annual reports of the major networks in South Africa, we have estimated that there are around 40 million active data subscribers in South Africa. However, this number includes users who have more than one device, so it is likely that the number of unique users in South Africa is closer to 30 million. What also needs to be taken into consideration is that many mobile users only use basic data services (such as browsing), while others use sophisticated applications across multiple devices. According to AMPS 2013 figures, only 13% of cell phone users download or use mobile applications. The point is not to look at mobile consumers as being one homogenous group, but to realise that there is a spectrum of different types of mobile users, all of whom need to be considered if they fall within your target market.
This is a really good question and one that we would all imagine to be quite easy to answer. However, this is not really the case. Finding sense in all of the various research surveys from AMPS to IAB, from Wireless Intelligence to IPSOS... to Effective Measure, Stat Counter Global Stats, etc, and the different questionnaires, definitions and spin can be quite an adventure. In fact, I would think that it's a huge industry disservice and reduces clarity on something that should be quite simple to answer.
For starters, how one defines an internet enabled mobile user makes a huge difference. Do we measure this as access purely via the mobile browser or just the application internet or both? Do we assume that an internet enabled mobile user is a smartphone user? Yet not all smartphone users have a data plan. And what about WAP-enabled feature handsets? So it's key to appreciate and understand these peculiarities and how each research survey defines and structures its survey questions before taking the numbers at face value. The fact that Effective Measure has surprisingly taken away the ability to view the percentage of mobile internet users obfuscates this further. So, whenever IAB or any other survey says that 82% of all internet users access the internet via their mobile device, one ought to interrogate it with some of these insights. I think more importantly and apart from internet enabled mobile users, is the fact that South Africa has almost 120+% mobile penetration, and this is where the real opportunity lies. And when we look at smartphone penetration, we know can expect exponential growth that will take us to just over 50% by 2017. And when we see MNO voice vs data usage and revenue ratios, then the picture is pretty clear. When we compare this to other developing and emerging markets, it is clear that SA, like the rest of Africa, are the ones making a quantum leap ahead of developed markets.
Are South African brands understanding the need to have a mobile presence?
Candice Goodman: Yes, I believe they do... the "Why" go mobile has been drilled into them - however what I feel is missing is the "How". Brands are hungry to know how to have a mobile presence and how to communicate with their consumers in a mobile-first country like South Africa. Brands need to see how to do "Smart Marketing without a Smart Phone" through local case studies, and then leverage the lowest common denominator of mobile tools with the highest reach like SMS, voice and USSD to maximise success.
Rick Joubert: We reached a tipping point about 18 months ago and the majority of brand custodians have given mobile a permanent placeholder in their strategy documents. However, there are still a significant number of brand managers who have not yet diverted material resources (if any) to mobile and there are many who still consider "mobile" to be the use of SMS push messaging and SMS short code competitions.
Amongst the group who have made significant strides in developing and implementing their mobile channel strategy, most still appear to consider mobile to be a "junior" channel and only a minority have come to the point where they have seen that in fact mobile is at the centre of most digital and social media consumption behaviour in SA now (e.g. +90% of Facebook access) and that mobile devices represent unparalleled opportunity for extending classic ATL media engagement with brands (via second screen and other strategies).
Nicolle Harding: More recently brands are taking a much more focused approach with regard to mobile. Having the basics like owned mobile media is only one element of the potential journey. The power of mobile is really that you can reach a consumer at any time and use the mobile device as an enabler. Understanding that your mobile presence can be used to tie in other marketing messages and developing a strategy with a "mobile first" mantra can ensure a brand builds a deeper relationship with the consumer, whilst achieving return on their marketing investment. Understandably, the "How" of achieving this can be a potential minefield. Which is why sharing learnings of success stories is so important to ensure continued growth.
Andrew Kramer: Over the last two years we've definitely seen an increase in mobile social network ad presence. In the last year alone advertising spend on Mxit has increased by 50% and the number of advertisers has doubled.
Brands are quickly understanding that Mxit campaigns deliver tremendous success through being able to create branded apps in high traffic zones, and when combined with Mxit advertising platforms, they can encourage literally hundreds of thousands of specifically targeted consumers to not just see their campaigns, but engage out of preference.
It's highly encouraging to see more and more brands understanding the space and becoming active in mobile social network advertising. We're confident that as more brands experience positive results from Mxit ad campaigns, the more advertisers will follow suit.
Sarah Utermark: Yes and No. My feeling is that mobile is recognised as an important channel when establishing their digital media strategy, yet there is not enough supporting material, case studies and effective measurement tools to give them comfort in allocating a bigger slice of that budget. It does also depend on the brand however. Some brands are extremely relevant for mobile, such as financial services requiring a constant stream of leads for customer acquisition purposes, and as such, these brands have embraced mobile. Yet others brands who perceive mobile not to be a suitable channel will not consider it a priority.
For example, if we take e-commerce sites requiring a user to purchase as one of their key objectives, this purchasing behaviour is much more prevalent on desktop than mobile, where users tend to research heavily and browse. That's not to say mobile should not be included as part of their marketing strategy however, especially when these e-commerce sites are beginning to see a shift in their users visiting their sites from mobile devices.
Ryan Smit: With mobile penetration at almost 150%, and smartphone penetration continuing to increase rapidly, it has been clear for a number of years that mobile is the future of engaging with consumers in South Africa. However, this is not to say that many brands are still neglecting their mobile presence. While all major brands in South Africa are likely to have a desktop-optimised online presence, many of those brands do not have optimised mobi-sites, and even fewer have sites that are optimised for tablets.
So while I would I would say that on the whole brands understand the need for a mobile presence, many of them appear to be slow out of the blocks to act on this need.
Nazeer Suliman: Progressive marketers get it. They get that mobile will be the dominant platform for internet browsing, and that mobile devices are going to be the primary way that people access, share and engage with information. Really progressive marketers get the duality in South Africa and Africa - and which technologies to leverage on both feature and smart phones and how to separate the hype from the reality. Other marketers are still grappling with and debating the importance of digital to start with. These types will not win in the now, let alone the future.
Is mobile advertising and marketing spend keeping pace with mobile access growth?
Candice Goodman: No, I don't believe so. I feel that "non-internet enabled" mobile advertising is underestimated, like the Please Call Me Tagged Ad. 'Please call me' (PCM), a technology that was first created in South Africa, has become one of the most widely used functions on a mobile phone, with 40 million adverts sent via PCM per day. PCM is a free service that will allow a user to send a notification to another user, even if they do not have any airtime - the cost is supported by an advert.
Statistics published by Millward Brown have revealed PCM to be a highly effective marketing tool - nine out of 10 South Africans know what a PCM is, while one in two people claim to have sent a PCM in the last week. Moreover, 64% of people who have read the advertising on a PCM claim to have responded.
Rick Joubert: Mobile adspend is growing at a very rapid rate in South Africa. However, compared to advanced smartphone markets like the UK (mobile share of adspend is 13% - size of print) and the US (mobile share of adspend just passed 10%) where mobile is forecast to contribute over 70% of all digital spend by 2018 - SA appears to be lagging significantly.
This however does need to be viewed against the context of smartphone penetration levels of half those of the northern hemisphere markets as well as very poor to non-existing mobile adspend measurement regimes in SA (making it unclear exactly how much is in fact being spent in mobile media).
Nicolle Harding: This isn't accurately measured, but my gut feel is it's desperately trailing behind. Last I checked of all adspend on ADEX last year digital accounted for roughly 6% and mobile 1%. Taking into account the above statements, it's not hard to see that there is much work to be done. The answer to this is complex and has many attributing factors. My feeling is that the main contributors are lack of knowledge of the medium, not planning with a mobile-first strategy in place, negative past experiences due to poor planning and implementation, industry commitment to tools and media property commitment to proper measurement. As an industry, we need to identify how we can build on what has been done and commit to empowering the future.
Andrew Kramer: Mobile acquisition and usage is growing faster than ever and advertisers locally are yet to take advantage of the opportunity to its full extent. While mobile advertising revenue is increasing, the ratio between mobile penetration and mobile adspend is unbalanced.
Relative to above-the-line advertising, mobile ads currently account for a small percentage of ad budgets, despite massive engagement stats. For us this presents a massive opportunity for ad sales. Each month we're increasingly seeing advertisers becoming aware of the opportunity, so I do believe the gap between mobile penetration and adspend will close over time as the understanding around mobile seeps in.
As mobile device sales continue to outpace combined sales of TV's and computers, time spent engaging on mobile is sure to rise - resulting in a new frontier for advertising and an untapped goldmine for brands.
Sarah Utermark: No, I would say not. Brand budgets tend to be allocated at the start of the year, with mobile allocation already apportioned. During the 12 months, a lot of work is required by the agencies to strategise and plan to ensure the brand gets a full understanding of how their spend will be allocated on mobile, not to mention, the detailed reporting and measurement of brand KPIs post campaign, in order to secure the spend going forward. With a lack of skill-set generally in specialised mobile roles, it puts the agencies under immense pressure to deliver within the limited timeframes given. Even with us, a sales house supporting every which way we can by providing case studies and greater insight on the audiences our publishers attract, there is still so much more that is needed to get the message across to key decision makers within brand marketing departments. If we can work towards training digital teams into more specialised mobile roles, we will no doubt begin to see more agencies building specific mobile divisions within their companies, ensuring someone is responsible for driving mobile forward.
Ryan Smit: Unfortunately there are no reliable estimates of the size of the mobile advertising market in South Africa, but if I was to estimate I would probably say that in the past it hasn't kept up to pace with mobile access growth, but as mobile access penetration reaches saturation, mobile marketing is now in a catch-up phase.
The reasons for this are partly because many brands are still trying to catch up on the advent of "traditional" online advertising and social media, and thus are yet to graduate to the realm of mobile marketing (even though it can be a simpler channel to leverage), and because traditional TV, radio and print advertising still hog the majority of large corporate media budgets, meaning that digital and mobile are often left scrapping over the leftovers.
Nazeer Suliman: We're seeing good uplift in measured media spend over the past years when it comes to digital. Although this spend data is highly deficient, the trend is that digital spend is growing. However, this may not be as fast or as quick as it should be, when one looks at time spent on digital and particularly mobile as a platform. Mobile, as a percentage of this spend, for most marketers is still pretty small - most are still conceptualising, designing and developing communication assets for a PC browser experience with spend naturally in line with this. And those that do mobile, assume it's just about developing apps. These are the "trigger happy" marketers. They create apps that very few audiences know of or even experience. As with anything else, it is key that mobile spend/ mobile investment needs to be led by a clear consumer led strategy with clear choices, not spend for spend's sake.
What advertising and marketing opportunities are available for mobile?
Candice Goodman: With so few smartphones, we had to find ways to make it work without - spurring innovation in the field of mobile marketing, and triggering the commercialisation of technologies as a world first: like Prepaid airtime, USSD, Please Call Me's and Mobile Money in Africa.
• USSD is probably the most successful technology you've probably never heard of. Essentially USSD is a call communicating through text as opposed to voice. It's a method that is cheap for the consumer, works across all phones and networks and most importantly, is familiar to the mass market - a tool with unlimited potential for marketers communicating in this sector.
• Automated voice messages too are an effective tool and one which allows for interaction with consumers via the phone's keypad, for example allowing for language selection, multiple choice answers, barcode entries and SMS replies, as well as hot key transfers to live agents.
• Other successful tools becoming more and more effective for local brands to drive sales are mobile coupons and interactive mobile catalogues with clickable hot spots that can even trigger a video!
Rick Joubert: The mobile advertising and marketing value chain is wide and includes everything from mobile presence (brand app, mobile site, USSD service etc), integration to ATL media and/or product packaging, with external touch points like SMS services, location services, payments, coupons, airtime etc though mobile media - display (both in-app and mobile site), search, social, direct (App messaging, email, SMS, MMS, voice messaging) and niche mass market (feature phone) opportunities like Please Call Me ad tags and selected USSD services.
The above describes the value chain at a high level but of course within this there are hundreds of unique opportunities / decision points in a fairly fragmented landscape.
Making sense of this initially requires some long-term strategic thinking by the brand custodian and/or agency, preferably in partnership with skilled mobile marketing professionals.
Nicolle Harding: Mobile is the most dynamic marketing medium I know. From companies building USSD games that users can play for a mere few cents per day, to rich display banners on premium mobile sites. The opportunities are endless.
It's not about what opportunities are available, it's about what your objectives are as a brand and how mobile can solve that need for you. Reaching a mobile audience can be done in so many creative engaging ways. It's important to understand who your target audience is and what the best mobile medium to reach them on is.
Andrew Kramer: Within the Mxit environment, the following advertising opportunities are available:
• Mxit's Splash Screens
• Mxit's Broadcast Message is a text message delivered to specific user profiles within the Mxit environment to achieve mass reach. The Broadcast Messages are strategically personalised and hyperlinked to drive users to brand apps.
• A Brand App - is a lot like a mobi-site or social brand page, a Brand App is a brand's real estate on Mxit where you can engage users, share content and product info, gather consumer feedback and grow a community.
• Banner Ads - static, full-colour banners displayed inside third party apps on Mxit. These are great for direct-response advertising and allow brands to take advantage of existing high traffic properties.
• Content Sponsorship - allows advertisers to associate their brands with a well-established app or game. Advertisers, brands or logos appear at the top of the Mxit app as a header and app messages sent to our subscriber base including the brand's sponsorship message.
Sarah Utermark: So much, but it depends on so many factors. First, you need to consider the platforms that are available and then assess the media that can be used to get consumers to these platforms. For example, marketers can choose from the following Mobile Marketing Platforms: Mobi Sites, Applications, Reward systems, Loyalty programs, databases capturing, social media, lead generation systems, e-commerce.
Following this, you have the media channels associated: Mobile Media:
Symbian phones - USSD, SMS, PCM and Automated Voice Messages; Feature Phones - Display, Search, Social Media, SMS, MMS; Smartphones - Display, Rich Media, In-App, Video, Social, Native Placements, Cross Screen - Shazam for TV.
Finally, once you consider the above, you can then apply the brand KPIs to suit the correct channels and media.
Ryan Smit: There are many different ways to engage with consumers on their mobile devices, ranging from the most basic (SMS and USSD) to more complex (Rich Media, Location-based advertising). Many consumers use their mobile devices to search for businesses, or services nearby, so search advertising will increasingly become an attractive option to brands, and already accounts for approximately half of all mobile advertising spend worldwide according to Google. Location-based advertising offers brands the ability to target specific consumers in their region, and there are a number of exciting services and applications which are using this concept to fuel their entire business model.
The key is to use multi-channel approaches to make sure that you don't miss out on large swaths of your target market because you have falsely imagined that everyone has a smartphone and a data bundle. As 70% of the market still only use feature phones, many brands will find that SMS or USSD-based marketing campaigns are the most effective for their brands, while brands which target high-end consumers may find that rich media content proves to be the best method. According to AMPS 2013 figures, only 28% of cell phone users use Facebook, and only 9% use Twitter, so mobile marketers need to think more holistically than just leveraging mobile social media.
Another channel which is looking increasingly attractive to use for mobile marketing are instant messaging platforms. Our recent Mobile Audience Measurement data for May 2014 suggests that smartphone users spend 57% of their time on communication activities (most of which is IM), and that WhatsApp is the most popular application in South Africa, with users spending an average of 9.8 minutes of each day on the application. The challenge with IM is coming up with innovative marketing techniques that are less agitating to users than annoying banner advertisements, something which Mxit and WeChat have managed to do quite successfully.
Nazeer Suliman: There are various technologies and opportunities, from basic USSD, IVRto social video, rich media display, visual search, geo location, Bluetooth, NFC and many more. The key is how to leverage, deploy and use these technologies and opportunities in new and truly meaningful and engaging ways - in ways that make a real difference and really resonate!
Do agencies understand the mobile advertising and marketing opportunities on mobile?
Candice Goodman: Many brands and agencies in South Africa become so excited about the new technology that is available in Europe and Asia that they tend to forget how few people have access to a smartphone, which means they tend to develop applications that only cater to a specific market and therefore they lose traction in an African market. Campaigns that use advanced technologies such as Augmented Reality, even QR Codes, have only seen limited, if any success, on a broad scale, in the South African market.
I believe that it is the entrepreneurial spirit of Africa, coupled with the need for communication, commerce, and community that has seen the creation of pioneering solutions in the mobile arena in Africa, by Africans. It is not the technology itself that is changing the landscape of mobile marketing in Africa, but rather, I believe that African people are changing technology and creating new opportunities for marketers to learn and share.
It is our job as mobile-first digital marketers to help the local agencies see how to leverage our homegrown technologies like USSD, Please Call Me's, and pre-paid airtime, as well as other tools with high reach like SMS and voice.
Rick Joubert: Most agencies have a reasonable idea of what's available - but generally only at a high level. Only a handful of agencies (yet) have the capability or capacity to develop (or indeed execute) an integrated plan which includes mobile channel elements at the level of detail that brands deserve.
There are certainly a few agencies that are doing some cool stuff in mobile and the overall enthusiasm for, and understanding of, the mobile media channel is growing very rapidly in the local ad agency community.
Nicolle Harding: It depends on what you classify as an agency. There are many agencies in South Africa that only focus on mobile. Brands and other agencies partner with these mobile agencies to assist and support with building strategies, development, planning and implementation. The nature of mobile marketing is that it is slightly more complex than other digital marketing. Also because of its ability to enable traditional marketing understanding this opportunity can add an extra layer of complexity. This coupled with the rapid growth of media opportunities can seem like a daunting task for traditional marketers. The reality is globally there is a lot of work that needs to be done to educate the greater marketing community on the brilliance of mobile.
Andrew Kramer: Yes and no. It's an ongoing educational drive to keep advertisers and agencies up to date with the latest technological advancements in mobile. Many are left behind as they haven't taken the time to get up to speed on the opportunities and benefits of the mobile social networking space. The media landscape is highly fragmented and hence our core directive is to ensure that media agencies and clients are continually informed about the latest technological strides, media platform options, and mobile content leverage opportunities.
Sarah Utermark: The rate of change in mobile advertising, the number of mobile solution providers in the market (ranging from the network operators to individual publishers and blind networks), as well as the way in which customers use and interact with their devices present a significant number of challenges to agencies.
With new buying models and new players entering the market all the time, agencies often have to navigate a very crowded market to find the right solution for their clients and often don't have either the resources or knowledge to do so. Finding differentiation can be difficult and agencies will tend to gravitate towards simpler solutions or buying models that they know and understand, but that often won't meet their clients' needs.
People use mobile phones for different reasons at different times of the day and understanding these changes in behaviour is vital. Whether it's for social media, information gathering or entertainment (playing games or watching video), agencies need to understand how and when to target different customers with different content, in different environments and at different times of the day. The opportunity for immediate, one-to-one engagement at a single point in time or specific location means it is unlike any other advertising medium in history, however it's very personal nature means that agencies need to be smart about how they create relevance for the audience they are targeting and reach them in a way that is non-intrusive and adds value to their customers' lives. Often all these factors add a layer of complexity that require agencies to increase their investment in resource and education, which can be difficult in more traditional agencies.
Investment in mobile advertising in South Africa still continues to lag behind digital spend on desktop and social media where in other more developed markets it has become far more intrinsic to a client's marketing budget and objectives.
Ryan Smit: Well that depends on the agency, but predominantly I would say yes. Whether their clients understand the opportunities is not always the case though, and many specialist mobile agencies struggle with educating their clients on the benefits of mobile marketing. It does not help that there isn't any research available that compares the effectiveness of mobile marketing to other marketing methods, but we here at GfK are planning to work with the Mobile Marketing Association in the future to conduct research into the value of mobile marketing vs desktop digital and traditional marketing methods.
Nazeer Suliman: I think most agencies and marketers get caught up in the technologies and how they are pushed down and served up in a vacuum, rather than how these technologies and opportunities serve people, add value or augment experiences. Great big ideas based on real consumer insights will always win. Put people first.
Conclusion:
Whilst there are some great success stories, it's clear that there much education and understanding is required when it comes to mobile advertising and marketing, particularly in light of the very unique and segmented mobile audience in South Africa. Understanding a brand's specific target market and the mobile usage habits of these target markets is crucial. A "one size fits all" is clearly not going to work considering the high percentage of feature phones still in the SA market. With such a plethora of opportunities, it's crucial to find the right solution - whether it be a stand-alone one, or one that is integrated into the overall marketing strategy. Consider the device the target market is using, and find the best solution accordingly.
