Why is Facebook opening an office in Africa?

Author

Sophie Curtis

June 30, 2015

Facebook is opening its first office in Africa, in a bid to grow its advertising revenue in the region

Facebook has announced that it is opening its first office in Africa, located in Johannesburg, South Africa, in a move that it hopes will strengthen its presence in developing markets.

The purpose of the office will be to encourage businesses across the continent to advertise on Facebook. The company is enlisting the help of governments, telecom operators, agencies and other stakeholders to help drive the effort.

Given that more than 80pc of Facebook users in Africa access the social network from a mobile phone, it is important that ads are optimised for this format, and the type of network connection being used, if they are to be effective.

Facebook claims that the new African sales team, led by Nunu Ntshingila-Njeke, who previously helped build Ogilvy’s network in Sub Saharan Africa, will help advertisers create and deliver ads that will appeal to customers across the continent.

The sales team in Africa will focus initially on countries in Sub Saharan Africa, including Kenya, Nigeria and South Africa.

“We are committed to creating solutions tailored to people, businesses and specifically for African markets,” said Ari Kesisoglu, regional director for Facebook in the Middle East and Africa.

“Our priority for the next few months is to continue the work we are already doing with some clients in this region. We will work more closely with businesses and agencies to understand the challenges, so that we can build solutions that help grow their business.”

With more than a billion people, Africa holds vast potential for Facebook. The number of active users in Africa has grown 20pc between September 2014 and June 2015, from 100m to 120m.

The company expects this growth to continue as the cost of data services decreases and more people upgrade from basic feature phones to smartphones that are capable of running its full mobile app.

Facebook described the opening of its new office as “the first step in furthering our investment in Africa and its people”. However, the company has been investing in technology products for the region for some time.

In 2013, Facebook launched Internet.org, a global partnership with Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung, that aims to make internet access available to the two-thirds of the world that are not yet connected.

The first product to come out of the Internet.org partnership last year was a mobile app that allows people in developing countries to access basic web services for free over their mobile network.

The app launched first in Zambia and has since rolled out in Tanzania, Kenya, Ghana, Colombia and parts of India. It allows users to browse a set of health, employment and local information services without data charges.

These include AccuWeather, BBC News, Facebook, Messenger, Google Search, Wikipedia, Facts for Life and UNICEF, as well as a number of locally-specific apps such as Go Zambia Jobs and India Today.

By providing free basic services via the app, Facebook says it hopes to bring more people online and help them discover valuable services they might not have otherwise.

As well as the app, the Internet.org partnership is also looking at providing internet access from the sky in places that are currently unconnected, using drones, satellites and lasers.

In March, it emerged that Facebook was testing solar-powered drones, developed by Somerset-based company Ascenta, to beam down laser-guided internet signals to those below.

The drones have a wingspan greater than a Boeing 737 but weigh less than a car, and solar panels attached to the wings mean that they will be able to keep going at altitudes of 60,000 ft for months at a time.

Facebook says this will bring online connectivity to remote locations, previously inaccessible, for the first time.

The ultimate aim of all of these efforts to improve internet access in Africa is, of course, to bring Facebook more advertising revenue.

Over half of Facebook’s total ad revenue came from outside the US and Canada in the first quarter of 2015, and mobile advertising revenue represented approximately 73pc of Facebook’s ad revenue.

Facebook founder Mark Zuckerberg said in February that advertising to Internet.org users was not an immediate priority, claiming that the ad market was still small in many developing countries.

However, Nicola Mendelsohn, Facebook’s vice president for Europe, the Middle East and Africa, told The Telegraph in March that the company was already working with some businesses to help them deliver ads to people in South Africa and Kenya via the company’s Creative Accelerator programme.

Facebook also offers tools for advertisers to target these users. For example, ‘Missed Call’ allows a person to place a ‘missed call’ in return for unique content such as music or cricket scores, alongside a brand message from the advertiser.

Bandwidth Targeting also enables advertisers to reach people based on the type of network connection they usually use when accessing the Internet, so that video ads are not sent to users with 2G connections, for example.

“One of the things that we do is work with agencies and marketers to show what best practice looks like and how they can target people in the right way that can deliver return on their business for them,” Mendelsohn said at the time.

“That’s the thing that we care about – we care about what is the return we can give to marketers and business by using the platform.”

This article was written by Sophie Curtis from The Daily Telegraph and was legally licensed through the NewsCred publisher network.


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