It’s become a fairly well established fact that large parts of Africa present a viable business opportunity for multinationals looking for untapped markets. The gates are open and key areas are demonstrating relatively sound political and economic scenarios for investment. Simultaneously, technology is facilitating what was previously impossible. The scene is set for big brands to stamp their presence on the market and Africa is almost the ideal stage for an increasingly evolving advertising medium – outdoor.
“Outdoor in Africa is in a unique position, because its role on a continent where there are widely varying degrees of literacy is invaluable,” says African Extension’s Rob Phillips, whose business involves selecting, purchasing and monitoring advertising space for both South African and international brands within the African market. “In effect, outdoor set the pace in Africa as early as the 1930s, when Unilever famously put signs up outside cafés advertising basic staples like soap powder, tea and coffee. People couldn’t necessarily read the copy, but they could recognise the branding. That’s what outdoor brought them; identifiable visuals.”
One of the first outdoor companies to venture successfully into Africa was Alliance Media. Conceived by Zimbabwean brothers Greg and Anthony Benatar, the company was launched in Zimbabwe ten years ago. The model was erecting bus shelters and using them for advertising opportunities. “Initially, the idea was simply to provide bus shelters; the spin-off was the advertising,” explains Greg Benatar. Alliance Media then moved across to neighbouring countries Botswana, Malawi and South Africa, using bus shelters, billboards, suburb signs, road arches and ultimately airports (in which they now have a strong presence across Africa). “The challenge facing advertisers worldwide has over the past ten years become one of how to speak to the target market without media wastage. I think the outdoor medium addresses this issue in one of the most cost effective ways.”
Certainly, advertisers are catching onto the value of this medium in the African environment. Barry Sayer, CEO of Clear Channel Independent, says his group’s African business is growing exponentially. “Africa has always been a challenge, yet its robust and relatively unregulated environment provides huge opportunities for the development of outdoor opportunities.”
But despite Sayer’s sentiment, Clear Channel recently disposed of its trading operations in both Kenya and Cameroon. “With the multiplicity of opportunities in Africa we don’t feel compelled to flog any dead horses. We would rather move from a country like Kenya, while it sorts its legislative issues out—and train our resources on a new or existing territory that can provide us with the appropriate returns,” he says.
Sayer’s comments are relevant according to Phillips. “Some countries in Africa have a very controlled regulatory environment, involving layer upon layer of paperwork. Add to that the fact that there may be no client demand in a particular country, and one has to ask oneself ‘why have a presence there’? It’s not necessarily a vote of no confidence in Africa, it simply means a reassessment and reallocation of investments.”
So it would seem, then, that the legislative milieu has proved more of a challenge than initially intimated? Many countries have retained their colonial paperwork heritage, and outdated bureaucracy translates into arduous form-filling and a setting that lends itself to bribery and corruption. “Licences are needed for just about everything in Africa, which forms part of a bureaucratic minefield where everything takes longer and costs more,” says Mike Thomas, general manager of Primedia Outdoor’s international division. (Primedia Outdoor currently operates in Lesotho, Swaziland, Botswana, Namibia and Mozambique, the latter being one of the most difficult countries in terms of legislative paper trails).
Benatar is philosophical about the issue. “I think you have to understand the culture of the country in which you are operating. It’s common to use bribery and corruption as a cop-out when what’s really at issue is understanding local business practice.
“Don’t be mistaken into using a South African model in Africa. We take advantage of local teams that understand the language – spoken and unspoken – in each of the countries where we do business. This makes the facilitation process much easier.”
And it would also be a gross miscalculation to view Africa as an “us and them” scenario. Each region differs in terms of economic and political stability at any given time. Gavin Mehrotra, continental media manager for Coca-Cola, emphasises that Africa is extremely diverse and “varies from region to region, from sophisticated—to [areas] where there is little or no data or research.”
Adds Sayer: “Today you can experience a flood like we did in Mozambique, or a coup as happened to us in Cote d’Ivoire, or a council simply cutting down our billboards that they had approved—as happened in Accra, Ghana. Generally, though, with the exception of the West Coast and Kenya on the East Coast, we have enjoyed stability and growing markets in most of sub-Saharan Africa.”
The technology explosion that has done wonders for outdoor worldwide is another reason why the medium works on the continent. Pierre van der Hoven, CEO of Three Blind Mice Communications (TBM), a business largely based on technology, says that while each country should be evaluated separately, there are great possibilities for his model across Africa. “We will definitely expand into Africa. The opportunity for TBM’s technology is huge, especially given the satellite reach capabilities.”
Says Benatar: “Globalisation and the massive growth of communications in the last five to six years have created a far more stable platform for marketers.”
Such advances can make production and monitoring processes more viable, but Phillips warns against taking technology in Africa too much for granted. “The benefits new innovations like Primedia’s ‘Primelites’ and Clear Channel’s ‘Citilites’ brings to the outdoor medium may be positive, but the viability is impaired if, for example, there isn’t a consistent supply of electricity.
“Technology may have environmental limitations. In the face of the almost total collapse of the Nigerian electricity provider, technology has progressed to the extent that there is not a business without its own generator!”
But what’s long been the major disadvantage to the outdoor medium on the continent is accurate research and measurability capabilities. Thomas points out that “the cost of research is often prohibitive and linked to that is the high cost of travel and accommodation, with many companies unwilling to share these costs for objective and unbiased research.”
Sayer expresses similar frustrations. “Research is a hindrance as Africa is almost devoid of any good audience measurement information, particularly information that can be used for inter-media comparison.” Benatar feels that, “advertisers are often not given what is promised by disorganised suppliers,” but says, “the industry recognises this difficulty and businesses like African Extension have turned this problem into an opportunity, as they offer a world class media monitoring system to Africa.” Thomas also concedes that organisations such as African Extension and East Africa’s Steadmann and Associates have made steady progress in recent years.
So what are the most viable regions for advertisers and marketers in Africa? Phillips lists the top regions as being sub-equatorial Africa, East Africa, Nigeria, Ghana and the North, particularly Egypt and Morocco. Sayer considers sub-Saharan Africa as best positioned to offer Clear Channel sound business potential. For Alliance Media, Benatar says Central Africa is not worth considering due to continual political upheaval. Well versed in African trends, however, Benatar says Alliance Media takes a “balanced risk” approach. “By investing in more countries in Africa, we spread the risk rather than increase it. Generally, one country will always be doing better than another, so by juggling it, we offset the risk.” Benatar cites Tanzania as a good example of this: “Ten years ago no-one wanted to touch Tanzania – it was a hardship posting. Now people are clamouring to get in there.”
The sense one gets when gets when talking to the big players is that while the optimism regarding Africa is tangible, an element of caution has crept into the equation. Less gung-ho and more softly-softly is the order of the day, and there is general consensus that there are considerable frustrations. Agree with him or not, Thomas doesn’t mince his words when he cites some of the challenges Africa presents. “Africa is the only continent that continues to grow poor. It is estimated that 40 percent of private wealth is held overseas. Many governments are effectively bankrupt and would collapse without massive injections of donor funds. Good governance in Africa has a long way to go. There are major discrepancies between what governments and their investment promotion agencies say and the reality of actually doing business. The message is that one should not believe anything until one has actually confirmed for oneself on the ground.”
Despite these observations, the indicators are still that there is a lucrative market out there. Mehrotra admits that while administration in certain parts of Africa is a challenge, for the Coca-Cola company market growth has been tremendous over the past several years. “We have been growing substantially across Africa and attribute this to factors such as optimism within the continent, development and global investment. On a global basis, there is substantial growth in developing markets and Africa is no exception, it’s a market waiting to be tapped.”
Benatar agrees. “I am hugely optimistic about Africa. The impact of the telecommunication revolution is already bearing fruit and as globalisation infiltrates deeper we will see sustainable growth being enjoyed in more parts of the continent.”
Culturally diverse, frustrating, potentially lucrative. This is nothing new, we could be talking about our own country. The message is: come prepared.