Alexander’s Blog

I recently came across an interesting little study called Mobile Usage and Attitudes (get the complete study on http://mymobworld.com/how-to-info.php ).
The study explores why, how, when and what for people access the mobile internet, what they would like to see changed and how important existing services are.
It gives a pretty good overview of the current state of affairs and delivers interesting insights in terms of where development should be heading to provide additional services that consumers want.

This study is just one example of the large number of studies that are released by companies, commissioned and/or independently, which try to shed light on what works and what doesn’t in the mobile market. Interestingly, however, none of these studies focus on the African markets. 

Even Nielsen, arguably the alpha and omega of media market research companies, operates offices only in the US and the UK for its subsidiary Nielsen Mobile.  

People can obviously take different approaches to business, for example the “from the gut” approach of entrepreneurs or the “I don’t believe statistics, unless I falsified them myself” approach of the seasoned manager. But real market insights are often only revealed by continuous, detailed and independent market research.

When it comes to mobile opportunities across Africa I miss this approach (but maybe I’m missing something here, and if so, please enlighten me!). Ever so often we let opportunities pass us by without making a serious and concerted effort to exploit them or, worse still, we allow others to cash in on opportunities in Africa.

An example of this are mobile conferences and exhibitions this month in Nairobi, Kenya and later in the year in Johannesburg, South Africa. Both are the brainchild of UK based companies, who obviously also take home the profits, which should be substantial, seeing that delegates have to fork out in excess of R30K to attend

Many countries in the world are in a recession. In South Africa, Finance Minister Trevor Manuel continuously attempts to downplay the situation. Shortly before the economic figures of the last quarter of 2008 were announced, Manuel still explained jovially that “a country is technically only in a recession if it produces a negative GDP over two consecutive quarters“. Manuel concluded at the time that, since he had not yet received the figures for the last quarter of 2008, and because the second last quarter on 2008 produced a positive GDP, South Africa is definitely not in a recession. 

Well, the 2008 figures are in now, and the last quarter did produce a negative GDP. That means South Africa is “technically” only one month away from being in a recession if the first quarter of 2009 also produces a negative GDP. This is now generally expected as a real possibility, with the Reserve Bank soon to hold an emergency meeting on how to stimulate the economy.

However, all these “technicalities” don’t really bother the man in the street, and I doubt whether Joe Public needed to hear the GDP figures, last quarter or otherwise, before he realized that things are really tough… Food prices are sky-rocketing and there is a feeling of despondency all around.

Companies also feel the pinch.

The Sunday Times, South Africa of 8 March 2009 reported on David Powels, President of the National Association of Automobile Manufacturers (Naamsa) and his questionable plans to negotiate a Government (read: “tax payer”) bail-out for the automotive industry. His argument goes something like: “Well, yes, we are uncompetitive… always have been, always will be. However, we still made bucket loads of money by cashing in on Government rebates worth tens of millions of Rand by importing most car parts instead of sourcing from local suppliers. This exercise is now becoming too expensive, and so to continue for us to make bucket loads of money, even during a recession, we are looking for Government money again, only this time not in the form of rebates but rather as a loan.” (The above is obviously not a direct quote from Mr Powels but rather a reflection of what he actually said… with a touch of irony if you will.)

Can’t blame the man for not looking ahead

Other companies and other industries are not so fortunate. They are also not so greedy. This unfortunate combination leads them to act responsibly and make adjustments to their budget. Sadly for us marketers, these budget adjustments usually result in budget cuts that affect marketing and advertising. So some clever mobile marketers from the marketing-land of milk and honey were quick to respond by suggesting that, in order to get more value for their advertising buck, companies should invest in mobile advertising. Mobile, they argued, is far more focussed on specific target markets than any other advertising medium and therefore ideally suited to produce the best possible results, even with a reduced budget.

The old saying “I know I’m flushing half my advertising Dollars down the drain, I just don’t know which half” would be redundant, because with mobile advertising there is no flushing. Or something like that…

Alas, a Briton disagreed, which is unusual when an American makes a statement (it seems the times of Prime Minister Tony Blair are really over). Anyway, this Briton, Jon Wade, director for strategic marketing at Wunderman, London, argued that mobile internet usage is still far below that of PC internet usage among the British population. If companies want to invest in focussed advertising they should therefore revert to the “trusted” internet. His figures are impressive: not only are there more than three times as many PC inernet users than mobile internet users in Britain (35.2 million versus 12.9 million), but PC internet usage also grows faster than its mobile counterpart.

Wade writes: 

“Almost without exception, every mobile marketing presentation I have ever watched or participated in begins with hyperbole: 

• “There are predicted to be 4 billion mobile phone subscriptions worldwide by the end of 2009” 
• “More people in China have a mobile phone than live in the USA”
• “Twenty-four percent of people would rather sacrifice their first-born child than contemplate an evening without their mobile” 

Whilst these things are undoubtedly true – apart from the last one, I made that up – and very impressive on the surface, those same presentations usually end with <insert year> – is this the year mobile marketing goes mainstream?”

Err, no.

Not this year. Definitely not this year.”

Hmmm… I like the man’s style of writing, and I cannot argue with him, at least not when it comes to Britain. But Britain has nothing to do with Africa (no, I’m not Bob’s ex-speech writer). Figures for the African continent look entirely different, and alltogether more promising for African mobile marketers.

Let’s take South Africa as an example: 95% of the countries cell phone population owns a WAP enabled phone with which they can access the internet. According to a study released by Vodafone in 2008, 9.5 million South Africans access the internet via their mobile phone. On the other hand, audited Nielsen/Netrating statistics report only 5.7 million South African PC intenet users. This significant gap will widen fast, given the country’s lack of fixed telephone lines and its cheap mobile internet access costs versus high fixed line internet costs.

With well developed 3G and GPRS technology, as well as a quick uptake of mobile offerings by their populations, other African countries don’t lag far behind South Africa, if at all. An example of this would be Safaricoms mobile payment solution offering in Kenya, which, over a period of less than one year, recorded more subscribers than ten credit card providers combined over a period of ten years.

A mobile marketers paradise!

So while 2009 is not yet THE year for mobile marketing, in Africa or elsewhere, the African continent is definitely ready. And the year is not over yet. Mobile marketers have to pull together and convince companies that they can and will benefit from mobile marketing now. If only they stopped viewing this important part of their marketing mix as a mere add on or nice to have and instead allocated adequate funds from their budget to mobi campaigns. This is as good a time as any. After all they are revisiting their budgets…

Advantage: Africa. Indeed!