It’s a hard time for the African consumer and an even harder time for retailers and small business owners. The last 18 months have seen purchasing power drop across the continent. Inflation figures in Sub-Saharan Africa are approaching upwards of 6% ( Reuters, 2021) while Nigeria has one of the highest rates at 17.38%. Retailers and small businesses on the continent are rationing resources and using the same advertising budget to promote several products in one campaign. Advertising budgets are shrinking and there is less money to spend on ineffective or experimental campaigns. What can retailers and small business owners in Africa do to maximize advertising budgets? Here are five principles to guide spending decisions.
Spend on Data-driven and Credible Stories
Wise spending implies investing in advertising that weaves credible stories around insightful data. Spending on the right stories matter. Stories have to match the target audience at the right time and place. Consider the case of Airtel Nigeria, a telecommunications giant. Airtel, one of the four major telecommunications brands in Nigeria was declining prior to 2015. To make matters worse, all telecommunications brands had established 4G infrastructure in the country except Airtel who was on 3G.
Research showed the brand that a lot of consumers at the time did not even have smartphones that could maximize 4G technology. In addition, 4G was not in every location and Nigerians cared less about the number behind the “G” at the time as long as the internet worked on their phones. These research insights led the brand to play up the purpose of data in the first place, regardless of the bells and whistles of 4, 5, 6, or 100G. The iconic campaign titled “Data is Life” emerged from this effort. The brand continued to refine its customer focused research until it came up with the cultural inspiration of sharing the African family experience. The resulting campaign milked culture to its fullest expression. Credible and data driven adverts come from detailed research on industry trends, consumption profiles, consumer lifestyles and purchase dynamics. Although Airtel is not a retail or small business, the story of its success offers some thoughts on how to spend wisely.
Spend on Simple Messages: Less is More
There is always the temptation to say too many things often rather than few things consistently. However, campaigns with simple and clear messages have a higher chance of success in Africa. Here is the example of Tusker, a leading beer brand in Kenya. The brand’s 2020 campaign “Here’s To Us” simply summarizes the brand idea “Kenya Milele” which is translated as “Forever Kenya”. It is a campaign rich in cultural diversity while displaying cultural unity. The simplicity of the message increases its life span. When Airtel created the “Data is Life”, it was a single campaign to address a problem. Little did the brand know that this idea was going to run for another 5 years (and counting). Spending on simple messages that amplify the brand essence can deliver worthwhile returns.
Spend to make your brand relatable and consistent
Customers see themselves, friends, families and experiences in their favorite brands. Relatable messages are more consistent and long lasting in the minds of customers. Tusker is a relatable brand in Kenya that consistently uses cultural stories to emphasize ethnic diversity and unity. The brand created campaign premises on these dimensions and consistently emphasized this narrative in multiple campaigns over the years. Consistent spending on relatable messages can help retailers and small business owners focus on differentiation rather than short term benefits.
Spend on Campaigns Involving Creative Democratizers
Africa is full of consumers experimenting and making their own adverts using tiktok videos and other platforms. These consumers democratize advertising and make it easier for retailers and small business owners to bypass advertising agencies. Engaging creative democratizers alongside advertising agencies can reduce costs and yield high returns when done strategically.
Spend More to Spend Less
Done right, substantial advertising investment can not only deliver long term benefits but also reduce long-term spending. In 2017, Airtel decided to address an existential threat through substantial advertising investment. The 2021 results show that Airtel’s initial investment has dramatically lowered its advertising spend. Below is a graph that shows the decline of CPV (cost per view) of Airtel Ads since 2017.
Source; Google Ads.
As you can tell from the graph, Airtel today pays far less for digital ads (Google) than it used to, saving cost, and increasing profit. There is still a lot of sense in the adage that says that you have to “spend money to make money”. This article suggests that wise spending does not necessarily imply cost-cutting. Spending more on advertising can lead to spending less in the long term if done strategically.
Authors: Uchenna Uzo, Faculty Director, Retail and Consumer Expert, Lagos Business School and Ekeno Eyo, Chief Operating Officer, Noah’s Ark Communications Limited.