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.

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.

Display and search are directly correlated, judging by a Specific Media study of comScore data. Brand- and segment-related searches (for cars, automakers and vehicle classes) jumped by more than 100% in several categories after consumers were exposed to display ads for those brands.

“Display advertising significantly impacts search, site visitation and engagement,” said Chris Vanderhook, COO at Specific Media, in a statement.

Search clickers exposed to display advertising were 22% more likely to produce a sale than those who were not exposed, according to a September 2008 study of Microsoft’s Engagement Mapping system by Atlas Solutions.

In a ClickZ article, Microsoft’s Young-Bean Song said the study results suggested that search alone was not a cure-all for customer acquisition.

“The issue we have with navigational search is that it completely obliterates the value we’re creating from other digital marketing we’re doing,” Mr. Song told ClickZ. “The idea that search is this magical fountain of customer acquisition—in many cases it’s not.”

David Hallerman, senior analyst at eMarketer, agreed that display can boost search.

“There is a connection between display and search ads,” he said. “Marketers know this intuitively. Often it’s not the search ad alone that gets consumers to act, but the context of all the marketing that preceded it.”

eMarketer predicts that search and display ads will retain the highest share of online ad spending formats through 2013, and will be the only formats to maintain double-digit share through that period.

“Profile means business.

But profile is very, very expensive, most of the time. Few small businesses can afford hundreds of thousands of shillings for advertising. Even brochures can be a stretch, although it’s a cheaper way in. However, as the world moves online, ways are opening of capturing buyers and sales that did not exist before, and that rate as cheap by almost any standard.

Internet

Setting aside the pace at which the Internet is being adopted in Kenya, it’s a forum that has opened a massive world market, now structured and sophisticated around means of putting buyers in touch with sellers.

And buyers there are, aplenty. Nielsen, the world’s leading monitor of Internet use, reported in its world survey of Internet users for this year that more than 875 million consumers are now shopping online worldwide.”

The Kenyan media landscape is no longer what it was in the 1990s; holding a television screen in your palm is now a reality; the Internet continuously keeps online readers updated with breaking news at every turn. The digital era has led to renewed competition, as consumers look for comfort and speed.

Business Daily Africa reported that after many years of trailblazing modern media, television globally seems threatened; especially the free-to-air that heavily relies on advertising to survive.

In a bid to stay ahead of the curve, more than 200 African broadcasters and filmmakers met in Nairobi last month to ponder their fate in the imminent digital shift and particularly to discuss ad-spend in the digital era.

Even though David Campbell, the producer of television drama Makutano/Junction is convinced that TV advertising makes more sense— in comparison to other Kenyan media— global statistics show that the big money is shifting to online media.

Pamoja Media: An African Ad Network

Erik Hersman of White African has just published an article on a new vertical ad network geared towards the African market. Pamoja Media makes it easier for marketers to reach the highly fragmented African market within the continent and in the Diaspora. This is achieved by partnering with the largest African media houses and premium niche sites that carry unique content and a faithful audience. By advertising on these online properties, advertisers access highly appropriate and targeted consumers for their products within any geographic region in the world.

Started by Joshua Wanyama and Benin “Mwangi” Brown of African Path, the network will serve African publishers by offering their inventory to marketers world wide. This will include large global brands and smaller companies within specific geographic regions.

White African writes:

Publishers

Pamoja is brand new, and just starting to get going. That hasn’t stopped them from gathering an impressive list of publishers with a total of 10 million impressions dedicated and another 10 million more confirmed impressions if ad inventory is filled. That’s impressive, but more interesting is to see some of the names on their list of publishers, including: Mail & Guardian (South Africa), the Daily Nation (Kenya), Modern Ghana and Stock Market Nigeria.

Other publishers are welcome to apply, as long as they meet the following requirements:

· Be focused on Africa, or the African diaspora

· An Alexa ranking of 250,000 or better

· Have a minimum of 2000 pageviews per day

· Be aesthetically pleasing (or at least not embarassing)

Advertisers

as whoever has been involved in this knows, getting publishers on board is the easy part. Everyone of them is happy to go with the media outfit that will provide them with a solid amount of advertising income. Getting advertisers is the hard part, and that’s where Pamoja Media is focusing their work now that they have the initial 20 million impressions. Current advertisers include Pingo, PoaPay, Accents Telecom and Zain.

Advertisers joining so far have come in because they’ve seen the brand name portals available through the network. Pamoja can get them on board at a better rate for a smaller advertiser than if they go to the Nation or M&G themselves, because they do a bulk buy with multiple advertisers. As the network grows with other large portals giving up excess inventory, Pamoja will become even more attractive than it already is.

A qualifying publisher can join the network from here

An advertiser can inquire and place ads on the network through this link