Fortune News | Jan 05,2019
Long before the military conflict began in Tigray, Ahadu Promotions Plc's hunt for potential clients in the city of Meqelle was a challenge. A sprouting city with growing businesses and industries, Meqelle was vibrant as it was lively.
Things spiralled out of control in November last year. Businesses hit hard and could no longer afford to keep employees on their payrolls. Public offices were closed while the whole region was cut off from the rest of the country for months. Established in 2020 in Meqelle, Ahadu managed to live through a complete telecom blackout, not to mention a full-blown conflict in the region. It has led to the closure of hundreds of businesses, including factories, and three billion Birr in damage to infrastructure, based on an estimate made by the Federal Police Commission.
"The internet shut down in Tigray – to put it properly, the war in Tigray – wasn't a market-friendly space for any company," said Amanuel Sisay, chief executive officer (CEO) of Ahadu.
Morphed into a digital marketing agency before the war while also providing all-around marketing services, Ahadu looked to expand to Addis Abeba in hopes of widening its market share. In contrast to Meqelle, the capital is a more crowded market with more opportunities towards outsourcing digital marketing services. Its efforts bore fruit, and the team managed to sign on 13 clients, making use of everything from cold calls to personal connections.
Branding, design, content creation, and marketing are the basic packages Ahadu offers to clients, ranging from clinics and factories to beauty salons and taxi companies.
For Amanuel, "the hunt for what's trending" is why he loves digital marketing.
The digital marketing industry remains in its infancy. Nonetheless, online advertising agencies and services have mushroomed over the years, and the kinds of services they provide have also been diversifying. This comes in the face of the growing number of internet users in the country, which increased to 23.5 million by the end of last year.
This stream of marketing creates a relatively level ground for small businesses as well as big ones. Companies spend billions of dollars globally for such services. The world's largest digital advertising market, the United States, garnered 43.53 billion dollars in revenues in 2020 alone. Optionally, businesses, especially small ones, can cater to their respective customer segment with Ad-free (organic) advertisement strategies.
In Ethiopia as well, thousands of businesses use digital advertisements, both organic and paid.
One of the beneficiaries as a small business owner is Yoseph Tiruneh, who runs a shoe store in Merkato. Business had been good for the past five years until things changed recently and his business started to slump. Realising that social media marketing could help him turn things around, he created a Telegram group a few months ago to promote his business. A Russian cloud-based instant messaging app, popular in Ethiopia with more than one million users, Telegram is a preferred channel for small businesses to promote their products and services.
Yoseph started posting photos of his products and began an online delivery service for customers, saving his business from crumbling.
"I could get many orders even if the shop were closed," says Yoseph.
This is not simply the experience of one businessman but a spotlight on the growing effectiveness and viability of digital marketing.
Studies show that almost half of the world's population uses at least one form of social media platform with an average usage of two and a half hours a day. There were 6.7 million social media users in Ethiopia in January 2021, 8.1pc higher than the figure from 2020.
The volume of marketing and promotion done through these platforms has been swelling alongside the number of users. Among some of the sectors that are actively subscribing to digital marketing services are alcoholic beverage companies, clubs and hotels, e-commerce platforms, media houses, and real estate developers.
The growth of digital marketing came in handy to beverage companies since the government banned the promotion of alcoholic products on broadcast media, effective in May 2019. Alcoholic beverage companies spent over 100 million Br a year for media advertisements before the ban. They have had to shift to print and digital media since and some outsourced their digital marketing to firms while others took on the challenge with their in-house team.
One of these is Heineken, arguably the world's largest brewery. It entered the Ethiopian market in 2012 after acquiring two previously state-owned breweries, Harar and Bedele. Following the prohibition on promoting alcoholic beverages through broadcast media outlets, the company has had to rely on social media to reach its potential customers.
"It's hard to say the social media campaigns have been a hit," said Fikadu Beshah, business manager at Heineken. "It's only a better option that is available right now."
Some use an alternative means of online presence through which an entity serves a niche group of people, building a consumer base organically.
Sheger Gebeta, a food blogging social media app, has gained popularity since it was founded in 2017. Comprising a team of five, Sheger Gebeta posts information about various restaurants across the capital on Facebook, Instagram, TikTok and Telegram. Elshaday Wubetu, the founder and managing director, sees what his team does as very limited work in the way of paid or requested promotions. Instead, the team goes around tasting food at restaurants and posting about their experiences. They also take suggestions from their followers on which restaurant they are to review next.
“We don’t do promotions; all followers and engagements are organic,” Elshaday told Fortune.
Their blog is seeing substantial growth on Instagram and Tiktok in particular with more than 32,000 and 85,000 followers, respectively
Looking at the behaviour of disruptive businesses, the mainstream media companies follow. Several are now using a digital marketing platform to share their content, trying to monetise their digital media activities.
Seven Communications first registered as a company in early 2018, starting as more of a design firm working mainly with non-governmental organisations (NGOs). It became a digital marketing agency a year after its founding.
"Digital marketing takes a lot of research and planning," said Robel Yohannes, one of the company`s founders. "Especially in a country like Ethiopia where the whole concept of digital marketing hasn't completely been established. There are still many avenues that need to be looked into."
The services Seven Communications provides consist of branding and design, photography and video work, digital marketing, and consulting. It also handles some forms of offline marketing services such as publication design and printing. According to Robel, payment depends on various services ranging from branding and design to the photography and videography work that goes hand in hand with digital marketing services. The fees it charges for the services range from 15,000 Br to 300,000 Br monthly.
Seven Communications has seven clients, among which only three subscribe for full services. For Deliver Addis, a food delivery platform, Seven Communications provides photography and graphic design services for its home page and social media. Tilla, a popular and upscale health club, is also getting social media management and content production services from Seven Communications.
Kassmasse, an artist who fuses Ambassel and Tizita sounds with international rhythms to create a genre dubbed ANSAR, also works with the company for social media management and video editing.
Still, the company sees a lot of room left for improvement.
"Since most business owners have yet to see the full potential of this service, they aren't willing to spend a lot of money on it," says Robel, observing the challenges the company faces.
Nevertheless, Robel remains upbeat that digital marketing has a high potential for growth as the number of people with smartphones grows, which has reached 44pc among the 49 million mobile subscribers.
The start-ups are not the only ones taking advantage of an opportunity in an industry that was non-existent a few years ago. Legacy companies such as Berry Advertising have also been leveraging the blossoming digital marketing industry.
Founded seven years ago, Berry Advertising gives general services in both the traditional and digital marketing avenues. It started as a small design studio but has expanded to include separate studios for digital media and production since.
Melaku Bahiru, managing director at Berry, which works with some heavyweights, including Ethiopian Airlines, the World Bank and BGI Ethiopia, remains challenged due to unreliable and slow internet access, frequent internet shutdowns due to political unrest, and forex issues. These companies need foreign currency to pay companies like Facebook and Google to run advertisements and sponsor their comments on these platforms.
This makes it difficult to say that there is a full-fledged digital marketing system in Ethiopia, according to Mekdela Mekuria, business and finance coach at the E4Impact MBA programme of St. Mary's University. The national online payment system is not fully operational, while the tax regime is far from addressing digital systems.
These limitations, however, have not deterred more companies from joining the digital market space.
YenePay, established in October 2015, is one. It started the business with 30,000 Br in capital and is now worth around 1.2 million Br, currently processing over 20,000 annual online transactions, averaging 80 a day. It works with banks such as the Commercial Bank of Ethiopia, Dashen, Anbessa, Wegagen and Awash, and the mobile money service M-Birr. It provides services through a wallet account and is waiting for approval from the National Bank of Ethiopia to introduce card and core banking payment systems in which payment is made directly from bank accounts.
For Nurhassen Mensur, business development and communications director at YenePay Financial Technologies, digital marketing is a bit scattered in professional practice.
“The relatively small size of the market and the shortage of access to strong data about digital media users hold the industry back,” Nurhassen told Fortune.
The current market is going through a significant shift as a result of the changing demography leaning toward the young who have enough spending power and are digitally adept, according to Nurhassen.
This demography is small in size and resides in urban areas, particularly in Addis Abeba. Still, it is expected to grow in the coming few years, and businesses will have to transform to meet the demands of the evolving market segments, according to Nurhassen.
PUBLISHED ON Apr 30,2021 [ VOL 22 , NO 1096]
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