But the industry matured and people started charging per impression (number of times an ad shows up on any given site). This type of pricing is called cost-per-impression (CPM). This was better than the monthly sponsorship deals. CPM is usually priced at 1,000 impressions. So when a sales person mentions a $1.00 CPM, it means that an advertiser pays $1.00 for 1,000 impressions of an ad regardless of how many clicks are generated within the 1,000 impressions.

This model was later surpassed with the cost-per-click (CPC). Google has built its whole advertising business on CPC. An advertiser only pays once a click has been generated and traffic sent to their site. CPC are valued more than CPM deals and generally are priced per click. Advertisers prefer CPC to CPM deals as they actually purchase for the traffic that arrives on their site.

Another pricing model is the cost-per-action (CPA) model which has taken off in the last few years. CPA deals are usually set up for affiliates. This system pays a publisher or website once a targeted action such as a sale actually occurs. This model is akin to having a publisher act as sales representative for a company. CPA campaigns work best when they don’t fit the traditional banner ads running on most publisher sites. These campaigns are quite effective whenever ads or links to products are placed within regular site content. Surfers are more skeptical purchasing from an ad than clicking on a product review that directs them to the manufacturer/store website. While a lot of ecommerce stores love this model, publishers shy away from it since an enormous amount of traffic is sent to ecommerce sites without publishers receiving remuneration for it.

In Kenya, leading local websites still price advertising according to sponsorship. Since most advertisers are used to paying advertising on sponsorship deals instead of CPA, CPC or CPM deals; they normally guard campaign targets and information to their detriment. I have been in a number of meetings whereby advertisers will expect a proposal for a campaign they seek to run. Once the proposal it presented, they usually shy away due to the suggested campaign amount as being too high.

At this point, I usually mention that the total amount is not what is important but rather the CPM or CPC rate since the value of the campaign is usually determined by this amount. Some clients comprehend it and are therefore able to move on to the next point in setting up a campaign. On the other hand, others remain skeptical, withhold the target budget amount and mention that this is an entirely new method of pricing advertising and they are not sure they will receive the right value for their money.

For the ones that proceed with placement, we run various optimization tests to ensure that they get the best performing creatives and landing page matched up with the right sites. Constant optimization of a campaign ensures that the goals of a client are met and they in turn want to spend more money with you.

IT training for kids who live in the surrounding farm areas of Stutterheim outside East London in the Eastern Cape. South Africa. Photo: Trevor Samson / World Bank

It has been a famous rallying cry that Africa’s internet growth will continue skyrocketing. Research studies have proved the possibility of a viable market within certain countries in the continent. With the introduction of various fiber optic projects across the continent, faster and cheaper internet will become a major benefit for internet connectivity in Africa.

Internet penetration within the continent sits at 5.6% while the rest of the world enjoys a 26.9% average. Within Africa, the only countries with penetration higher than 20% include: Mauritius (26.7% of 1.275 million people), Reunion (27.4% of 803,209 people), Seychelles (37.0% of 86,595 people) and Tunisia (27.0% of 10.38 million people). Morocco is close to breaking the 20% barrier at 19.2% of 34.3 million people. Penetration within these countries allows the web to play a greater role in the everyday lives of people with access. Other than Tunisia and Morocco, most of these countries have a small population within tiny island nations allowing for greater penetration.

While it is true that the web will become a force in Africa, it won’t be so without a few deliberate decisions on both the part of policy makers and business people. Currently, the web is used to access outside destinations and information in most African countries.

Why is this significant?

Until the internet experience is relevant to day to day operations of a people, it is very hard to make it a must have tool. In the US, the web is used from when one wakes up till the moment they retire to sleep. A single day will have someone checking email, reading the news, catching up on blogs, shopping, interacting with friends, banking, work intranets, learning through research, entertainment, and many more. Within Africa, I have found that the internet is used effectively by a select few. For everyone else, this is a great tool for communicating and meeting people through social networks such as Facebook.

Browsing through the Top Sites per country on Alexa.com is an interesting experience. In the US, the first foreign site ranked that I could identify is BBC at number 55. I think of a foreign site as one where content is created predominantly for a country outside your own. The Google country versions are a special case and I will treat it as such. Outside of the US, whenever you type google.com, the country version shows up instead of the global site. So I treat Google country sites as a similar iteration to the global site. Out of the top 100 sites within the US, I could only identify BBC as a foreign site.

In Japan, China and the UK, I found US sites but also a good amount of local web sites relevant to the country. In China for example, none of the global powerhouses such as Google and Yahoo led the way. These country leading sites cover a wide range of fields from shopping, recreation, local and government services, entertainment, news, resources and many others.

In Africa, this is not the case. The top Nigerian site ranks 16^th among the leading sites. Nigeria though has around 22 sites within its top 100. South Africa’s first site is ranked 8^th with a healthy 42 sites within its top 100. Egypt’s top site is ranked 8^th while Morocco’s is 9^th. Kenya’s top site is 12^th with 25 sites amongst the top 100.

In my opinion, until African governments start investing in better websites to assist its citizenry, until corporations both large and small start delivering services or improve workflows online; we will always trail the rest of the world. While connection speeds and the drop in prices are major factors in the growth of web penetration, so will the delivery of every day services that consumers and citizens expect from their corporations and governments respectively.

Cheaper internet will mean more people will have a chance to go online. But how sustainable will the web be in Africa without great local content? We can all visit Facebook and BBC and laugh at YouTube videos, but we need local content outside of news to make the internet a truly living and breathing organism. Services such as job and real estate searches, car buying, shopping, local entertainment and the like will be important.

This brings me to the final missing piece that I think is as relevant as a conscious shift in strategy by both governments and corporations. Online Payment Services. Discussion on payment services will require a separate post, but until a payment system is established in Africa that is respected and accepted by both locals and the world at large, ecommerce in Africa will be a dud. Fraud has rocked so many banks and online payment services. For every new payment product made available, a hundred hackers try to figure out a way to steal from them. This has become a major pain for most companies and international ones have learnt to avoid Africa like the plague. We need a stable, robust and scalable solution that work in most African countries. Once that is established, I think we will be on our way to realizing the potential of the web and the smart phones in Africa.

Granted, only 5.6% of the African continent is online. Africa is the second fastest growing market in terms of connectivity at 1,100%. When most African corporations think of the web, they don’t see the potential markets this space holds for them. There are two very important aspects of online marketing that I point out to any potential customer looking at the reach an online market:

1. The web allows a company to reach Africans in the Diaspora effectively
2. Within Africa, the greatest concentration of online traffic is based on specific cities within a country and amongst the middle and upper class

Diaspora Africans
I once talked to an entrepreneur who wanted to reach Africans in the Diaspora. I told her that the biggest connection an African has with the continent whenever they are living in Europe, the Americas, the Middle East, Asia or Oceania is online. This is the ready access we all have when we think of Africa. We can read the news, find out which broadcasters have new content, connect with family and friends and keep abreast with conversation regarding Africa or our specific countries.

The Diaspora is a ready market for any product that can be sold or delivered online. Key hurdles often times are based on logistics or payment systems. Most African companies are either restricted within their corporate processes or international procedures and laws that place hurdles in their way of quickly utilizing available opportunities.

As is the case with most business models, success online depends on having the right strategy, knowing where and how to get your audience and figuring out a way to efficiently deliver on your brand promise. The web provides most corporations with an impressive reach into new markets either locally or globally. Africans in the Diaspora are already used to online shopping and have proven to be a constant source of remittances to their respective countries. Companies that utilize the opportunities a Diaspora market offers will be in a good position to reap great benefits.

An Urban Online Audience in Africa
So far, the web is an extremely urban affair within Africa. For instance, In Kenya 80% an internet study by the Communications Commission of Kenya (CCK) in 2006 found that the capital city Nairobi had 80% of all internet customers followed by Coast province with 9%. Kenya has 3 million internet subscribers as of 2008.

Kenya Internet Subscribers by Province

Source: CCK (Internet Market Study)

Nairobi Province’s population is estimated at around 3 million unique machines by Wikipedia. 80% of 3 million internet subscribers equal 2.4 million people*.

This is an extremely high reach for any company looking to sell its products within the urban areas of Nairobi and Mombasa which is within the Coast Province. When a company looks at its marketing targets and the audience they seek to reach, online marketing provides the right reach for them within key specific sectors. While the web is not the right platform for marketing to a rural or lower class audience, it is very effective in selling goods and services to middle and upper classes within any African country.

*The last study done by CCK was in 2006 when Kenya had around 1 million internet subscribers. The number of internet penetration within other parts of Kenya has grown but Nairobi still accounts for the lion’s share.

Erik Hersman talks with Joshua Wanyama, Co-Founder, Pamoja Media.

White African writes, “Joshua Wanyama found himself in a bind. He had just moved back to Kenya after growing a successful web firm in the US.

Now he wanted to put Pamoja Media on the map in Africa, and he realized quite quickly that there was a major knowledge-gap in the interactive marketing space. How could he sell the connections that his ad network gave him if the very people he was selling to didn’t have an online strategy at all?

This realization caused him to change his strategic direction of the Kenyan operations to gain a customers. He changed it from being just about his ad network, and added on 5 more areas of expertise that would really give his clients positive returns:

• Interactive strategy – how to scale a company’s operations and marketing online
• Creative Development – Interactive ads, landing pages, enewsletters & micro sites
• Placement – We run ads on the Pamoja Media Network, Yahoo, Google and Facebook network of sites
• Social Media Marketing – This works for clients seeking long term social engagement with customers. We handle blogging, Facebook, Twitter, YouTube, Flickr and other accounts for such clients
• Online PR – We also handle online PR for companies seeking to grow their reputations outside of advertising African Market online”