November 26, 2008


By Hisham Isa, Vice President (Marketing)

South Africa is a unique market, yet one that offers good lessons to mobile enthusiasts and advertising/marketing executives worldwide.

Less than fifteen years after the fall of apartheid, economic disparity in this country of nearly 50 million is acute.
First World and Third World economies live side by side. Yet while some workers from the townships and rural areas earn a living inside the wealthy enclaves, the rich and poor in South Africa are generally more separated and live more apart than in any other country I've visited.

This presents a challenge to consumer businesses that aim to serve the entire country, a challenge accentuated by the presence of nearly a dozen different official languages and the fact that many South Africans at the bottom of the pyramid do not have access to the country's mainstream media.

Let's take a look at an example: mobile phone providers. Companies like Vodafone were particuarly hard hit by the “missed call phenomenon”. Consumers without sufficient phone credits who needed to reach someone by phone, routinely hung up after just a couple rings. This was a signal to the other party to please call back.


Carrier networks were inundated by millions of missed calls each day.But rather than write off this segment of the market, Vodafone saw a business opportunity. They introduced “Please Call Me”, a free ad-supported SMS service. Instead of calling and hanging up, South African consumers can now send the free “Please Call Me” text message. Grocery stores, insurance companies and other businesses quickly signed up for the programme, seeing it as a way to connect with difficult-to-reach consumers. Vodafone now serves some 20 million ads a day along with the Please Call Me messages.

Vodafone has tapped businesses who wouldn't advertise otherwise, like providers of funeral insurance. AIDS is unfortunately still a major killer in South Africa, particularly among lower income groups. Funerals are expensive, often out-of-reach for the country's poor. Insurance companies offer funeral insurance, which the poor can afford. But insurers had trouble advertising the service, since their target audience rarely access mainstream media. Mobile marketing provided the perfect solution.

Companies across South Africa are now integrating mobile advertising into their marketing strategies, more so than in other markets. Replies to a survey of executives attending BuzzCity's South African roadshow provide an insightful snapshot:

  • Only 3% of respondents had not tried any form of mobile marketing
  • SMS campaigns have been used by 34%
  • Mobile Internet campaigns have been implemented by 31%
  • 81% of respondents say it's important to own a mobile site
  • 93% believe that mobile sites increase interactivity between a brand and its users
These responses are significantly higher than what we've seen at BuzzCity roadshows in other countries.

Digital agencies are springing up in major markets. Cape Town in particular has a healthy online publishing industry and by some accounts, there are now more than thirty digital agencies there alone. A number of these digital agencies are making a business out of developing mobile sites for their customers.

Mobile downloads have decreased and content providers are turning to ads for revenue. South Africa ranks #3 globally in the BuzzCity Mobile Advertising Index with more than 540 million ads served from July to September 2008.

More South Africans meanwhile access the internet from mobile devices than computers. Nearly twice as many in fact, according to Vodacom, which says there are close to 9.5 million mobile users in South Africa. Along the same lines, Google reports greater usage of its mobile site in South Africa than its website.

Next on the horizon is the 2010 World Cup. South Africa is undergoing an infrastructure boom in the build-up to the Cup. Virtual infrastructure should profit as well. This represents a great opportunity to produce new content introducing the country to the expected influx of visitors. I also wouldn't be surprised to see South Africa become the first market to see the rise of boutique mobile ad networks. Boutique networks – that serve one genre, like hotel sites, adult sites, local language sites, etc. -- exist for the internet, but not for mobile.

In “Africa Rising", Vijay Mahajan argues that 900 million African consumers “offer more than you think”. While this may be news to many, South African companies know it well. They are finding business opportunities where others have just shrugged their shoulders. And at BuzzCity, we appreciate and admire their innovation.