Nwagbo uses programmatic for familiar reasons: scale and efficiency.
“There are hundreds of media houses,” he said. “It’s more cost-effective to go to the platform, where we can target categories of individuals.”
Plus, he can monitor results in real time and adjust the campaign parameters, making his buys more flexible than in the past.
Frakem only uses one other form of advertising: Facebook. In Nigeria, the internet community is paying close attention to the social network, which has set its sights on the continent. CEO Mark Zuckerberg visited earlier this year to tout its internet-beaming drones.
But Frakem limits its Facebook spend because of cost, which Nwagbo attributes to exchange rates. “Dochase is cheaper for us, and the content is in Africa.”
Despite Facebook’s presence in Africa, Dochase’s Goodnews doesn’t envision too much competition from foreign ad tech, as he says homegrown tech makes the most sense for the current market: “For tech to be relevant in Africa, it has to be tailored to the specific behavior and expectations and browsing patterns with people in Africa.”
Goodnews doesn’t see South Africa-based publisher co-op SouthernX, founded last year, as much of a competitor. Although the co-op has expanded outside of its founding country, Dochase said its programmatic platform offers more types of inventory in Nigeria and Kenya than the programmatic competitor.
On the supply side, Dochase has connected to hundreds of media houses in the countries it serves, and Goodnews is striking deals with telcos, a huge source of ad inventory in the country. To keep costs for phone access down, many phones come with ads on the lock screen, for example.
Local advertising budgets are low by European or US standards. For example, in Frakem reported revenue of $50,000 in its first year as an ecommerce company.
But local companies like Dochase and foreign ones like Facebook are arriving early to a growing opportunity. With Africa leapfrogging over desktop and going straight to mobile, problems like cross-device matching aren’t as much of an issue. Consumers are comfortable making purchases over their phones, since many never shopped using desktop computers.
Ecommerce companies like Frakem stand to benefit from this explosion and will ramp up advertising spend as more sales flow through mobile.
“Because [mobile users in Africa] are used to doing commerce on cell phones, they will do commerce on smartphones,” Ghose added. “I think it’s a huge gold mine waiting to be tapped.”