In July, Facebook officially launched its first office in Joburg, South Africa, Africa. With over 120 million Facebook users on the continent, it was about time. But why Africa and why now?
Facebook’s VP for Europe, the Middle East and Africa, Nicola Mendelsohn believes that Africa is where their next billion users will come from. Not only does Africa have a young population (70% of Africans are under the age of 25), but it is also a mobile first continent with over 80% of Facebook users accessing the site via mobile.
Facebook goes way beyond checking what your friends and family are up to. It provides unprecedented access to audiences that traditional advertising could never reach and it is all data driven. It is able to serve these ads without annoying the user. This seamless integration of ads is known as native advertising, and it has a much higher response rate.
Advertising is also how Facebook makes most of its money. In the first quarter of 2015, Facebook generated $3.54 billion in revenue, and mobile advertising accounted for 73% of total ad revenue. Mobile advertising is big business. The objective of the SA office is to increase ad revenue in South Africa, Kenya and Nigeria.
Facebook has already had success working with brands, agencies and SMEs on the continent. From working with large MNCs like Coca Cola to launching new businesses, Facebook produces real business results.
Yet doing business in Africa is very different from the rest of the world. Most Africans use feature phones and all of us are airtime/data conscious. We simply don’t have the infrastructure yet for free wifi everywhere, like our American and European counterparts. However these constraints have led to some remarkable innovation:
- internet.org – surrounded in controversy because Facebook was accused of violating net neutrality, this does give internet access (Facebook and some other sites) to those that would not necessarily have it.
- Facebook lite – this version of Facebook uses much less data and is able to function on a 2G network.
- Mobile ads – these challenges in Africa have forced Facebook to come up with innovative mobile ads. For example you can get please call me ads for mobile. The user dials the number and a voice recording plays.
Constraints lead to innovation, and it will be exciting to see what Facebook comes up with in terms of mobile advertising. It’s also a bonus that their Africa office is headed up by Nunu Ntshingila. Say what you want about the social media network – they constantly put women in strong positions within the company – LOVE.