The Managing Director and Chief Executive Officer, Terragon Group, Mr. Elo Umeh, says mobile and digital services have the capacity to further grow Nigeria’s Gross Domestic Product, among other benefits. He spoke with STANLEY OPARA of Punch newspapers.
Given the level of development in digital and social media globally, where would you place Nigeria in this light?
There is the extensive use of social media and many brands locally have come to include it as part of their marketing strategies. However, social media is just a part of the scope of digital marketing and a lot is yet to be explored by brands locally. Many have yet to fully explore the route of developing tailor-made digital solutions, which can be deployed using Short Message Service, Unstructured Supplementary Service Data, and the social media. This is particularly useful when you consider the fact that 65 percent of Internet users access the Internet using their mobile phones and only 25 percent of this population uses smartphones. It then becomes apparent that digital solutions need to take into consideration the prevailing market elements.
Currently, what works in other countries in terms of the digital platform may not necessarily work here, and conversely, what doesn’t work may actually be effective here. Take for example the use of apps. Experts in Europe and America are talking about a decline in app usage as a consumer engagement tool, but here the use of apps has not been fully explored and as such still hold a lot of potential in reaching the consumers.
What we do in our case is to create apps across platforms that will be suitable to all consumer demographics that fall within the client’s target audience.
Mobile communication in Africa is expected to grow further this year after a record of over 80 percent penetration last year. What impacts do you think this growth will have on the economy of Nigeria?
Certainly, we cannot underestimate the potential that lies in mobile communication especially now that the government is looking to develop other avenues of boosting the Gross Domestic Product outside the oil and gas sector. Information and Communications Technology and its related sectors, which include mobile and digital services, have the potential to generate significant earnings and boost the economy. The risk factor in the digital economy is lower; therefore, its knowledge base puts our huge labour force to work in acquiring skills to help in growing the sector. However, before this can be achieved, we have to organise the digital space in collaboration with the ministries of communications technology and education.
According to recent research reports, African telecoms firms specifically are predicted to generate over $1.3bn in mobile advertising revenue alone by 2016. Research from Gartner Incorporated also shows that the global market for mobile advertising will reach $18bn in 2014 and grow to $41.9bn by the end of 2017. This information goes to show the potential that mobile advertising has, not only in Africa but globally.
A lot of those estimated mobile advertising spending can actually come to Africa if the continent can position itself well and show the potential benefits for advertisers and mobile platform owners. Now, the growth may not be as high as that of a mature market as the United States, but it just goes to show the level of potential that the digital media market could contribute to the economy if properly supported.
The private sector has recorded significant feat in the area of mobile and digital advertising. Do you think the government is doing enough to support the growth of the industry?
I believe the government is making significant efforts in ensuring the growth of the industry. The Internet is at the heart of what we do and one significant thing I should mention is the government’s drive to increase broadband capacity through improved infrastructure. The National Broadband Policy spearheaded by both the Nigerian Communications Commission and the Communication Technology Ministry, if implemented, would give a further boost to the digital and mobile industry in Nigeria as more and more people would have Internet access and things that were seen as challenges would cease to exist.
Also, in 2011, Twinpine won a grant from the Nigerian government to grow capacity and employment opportunities under the YOUWIN initiative supported by the Ministry of Finance, Ministry of Communications Technology and the Ministry for Youth and Women Affairs. The effort of the government to support indigenous organisations in this manner is certainly commendable and I see greater things happening in the digital sphere if the trend continues.
Your organisation recently participated in the 2014 Mobile World Congress. What influence will this exposure have on the industry given our local challenges?
Terragon as a group focuses on digital and the new media in Africa and as such, we exhibited products and services, which cut across our three major business units. We were the only Nigerian company at the Mobile World Congress.
One major thing that we wanted to come through to people at the conference was our technology, which we use to power all our operations internally. One drawback of most digitally focused companies in this part of the world is the lack of technological capacity – whether in terms of skill or infrastructure – to power digital processes.
Last year, we processed a record one billion SMS transactions, which are significant for any digital outfit running in Africa. And currently we manage about two billion mobile impressions monthly.
Considering the vastness of contemporary technologies, do you see foreign investment entering Nigeria in the area of digital marketing and advertising?
Indeed, the mobile and digital media sector in Africa is growing rapidly and there are opportunities for global players if they tap effectively into the local digital ecosystem on the continent. The market here is very unique from what obtains in other continents and so are the challenges. In Africa, there are more mobile phones per person than there are television sets or even desktop computers. So, this tells a lot about the reach when it comes to advertising opportunities for international brands looking to invest in this market.
Digital advertising in regions like North America has reached its maturity stage especially in online advertising, but here we have an industry that is still growing and there exist opportunities for investors to plug into the local ecosystem to grow the industry. The potential for growth is immense and this is part of what we showcased to the world at the MWC. From an African perspective, we were able to show the world what is possible within the digital industry, what opportunities exist and this we intend to do through our success stories.
Last year we achieved a minimum of one billion mobile ad impressions per month on our mobile ad network, Twinpine, and also achieved a total of 900 million page hits for our clients through our digital marketing agency, Terragon Media Limited. If the market was more robust with global players coming into the value chain, the results could have even been greater for the industry.
With the exit of a big player like InMobi from the African mobile advertising market, what has been the experience of your mobile advertising network in Nigeria and Africa at large?
The African digital market is unique and with that uniqueness comes an equally distinct set of challenges. At Twinpine, we have been able to develop a deep understanding of the indigenous market along with the trends of mobile users and consequently we have developed locally relevant solutions that enable us to reach out to consumers, which in turn translate to revenues for mobile platform owners on our network. So I would say that our knowledge of Africa is one thing that has given us the ability to innovate and kept us in the game. Technology powers virtually everything we do and this provides a solid base for offerings.
There are a lot of players in your kind of business especially when it comes to the digital marketing scene as well as in mobile content aggregation. How has it been competing?
Excellence will always put you ahead of the pack no matter which market you are playing in. Our technological capability has ensured that we are ahead in terms of not only delivery of quality work but also swiftness in meeting deadlines.
One other thing that we have as a benefit is the cross-pollination of ideas and expertise across each of the business units- for example, using mobile advertising or SMS marketing to support digital marketing campaigns. This also helps to give a more wholesome experience to clients.
Would you say your industry is well regulated here in Nigeria?
I believe the regulatory bodies are playing an active role in the industry with the likes of the NCC overseeing activities in the mobile content aggregation industry and ensuring that content provided conforms to regulatory standards. I believe that as the industry evolves, there will also be a need for regulation to evolve so that the respective components of the sector can reinforce each other to the ultimate benefit of the consumers and the country at large.
Technology will continue to evolve speedily. Do you see this as a strength or weakness for the Nigerian industry?
The advancement of new technologies while giving the industry new hurdles to cross will also provide new opportunities to innovate and provide even better services than is currently being done. As an organisation in the digital/mobile service sector, innovation should be the second nature as the industry and consumer lifestyles are ever changing