Over the last 15 years, Africa has seen significant mobile telecoms growth and now data is being viewed as the ‘new oil’ on the continent.
Founder of the Terragon Group, Elo Umeh, a 35-year-old Nigerian with a knack for mobile, digital innovation and creative solutions, has made overcoming data access and reach on Africa’s most pervasive device the mission of the company he founded 8 years ago. With a vast amount of experience in the mobile telecommunications industry having worked in different countries in Africa – Nigeria, Kenya, Uganda, Ghana and Cote d’Ivoire – Umeh has consulted widely for various organisations in the telecommunications and banking sectors, including the International Finance Corporation (IFC) on management of rural telephony initiatives, mobile payments in West Africa and the deployment of new products.
A keynote speaker at TMT Finance Africa which recently took place in London, Elo Umeh is the current co-chair of the Mobile Marketing Association in Nigeria. He talks to me about being a significant player in a fast-growing market.
What has fuelled your entrepreneurial drive?
My love for digital has come from the iPhone. As an undergraduate in Lagos people couldn’t communicate unless they queued along with 30 or 40 people for hours to use a public phone. The government held a monopoly on phone lines and provided relatively substandard service, so not much was happening from a commercial standpoint. The development of mobile communications was a real gamechanger and from the beginning it began to make a significant impact across the continent. I realized it was going to change everything.
Why create a technology business?
I saw the potential of reaching an untapped market, that struggled due to the lack of basic infrastructure, therefore, development of communications, transportation, power and could be bridged through the innovation that potentially was being heralded by the launch of the smartphone in 2007. Passionate about exploring the possibilities of the aggregation of media channels on mobile, we sought to transform the way companies reached their customers across Africa, in the early years, and more recently, as data capabilities grow globally, we have focused on innovating with data by paying attention to the local realities within African markets.
This passion resulted in the creation of Africa’s digital powerhouse, Terragon Group, eight years ago in Nigeria. Based in the heart of Africa, Terragon is considered a leading data and marketing technology group and houses two independent but complimentary business units – Terragon Digital and Twinpine Network – serving various multinational and local brands. The company operates in several other countries in Africa, including Kenya, Ghana, and Cameroon, and beyond Africa to India.
Terragon has experienced unprecedented growth in the past year and there’s more opportunity on the horizon, following the launch of Adrenaline, the company’s proprietary platform which presents a plethora of opportunity for firms across verticals to engage, interact and acquire users via the internet and mobile operator generated media channels. Adrenaline, the company’s flagship software which is a cross platform mobile ad serving and data monetization platform specifically developed for the African market uniquely characterised by relatively low internet penetration (30%), high mobile penetration (84%) and a high percentage of prepaid subscribers (97%); presenting prolific mobile operator media inventory which when combined with rich data from mobile operators makes mobile users reachable and identifiable.
How does it work?
Adrenaline, is redefining the advertising landscape by plugging mobile operators in Africa into the existing web ecosystem, targeting previously unidentifiable consumers and allowing for personalized ad serving and monetization of the data.
Using a unique mix of web and non-web inventory (as well as data sources from both inventory) and delivered via a programmatic technology, the software enables advertisers to access a variety of channel options at scale. This has been achieved by plugging mobile operators in Africa into the existing web ecosystem, targeting previously unidentifiable consumers and allowing for personalized ad serving and data monetization.
Adrenaline boasts of unrivalled access to data on the continent and can reach targeted mobile audiences in Africa, as well as the 70% of consumers who are not connected to the internet. The software leverages media that sits within the operator environment, generated by the 97% of mobile subscribers who are prepaid, and their interactions on their phones.
Why is it important that the technology is home-grown?
Adrenaline was developed by a knowledgeable team to be globally competitive within a local market context and has provided access to vast customer base and rich data sets:
The following key points are characteristics of the peculiar African market which make data and digital services the new frontier:
- Young population (70% < 35 years)
- Low Literacy levels
- Low and unstable incomes
- Prepaid market amounts to 97% of the mobile market
- People use mobile phones differently in Africa – data is often switched off, people check credit balances, voucher usage
These challenges mean a cut and paste or inherited approach will not work in Africa. Terragon has built these continent specific challenges into all its products including Adrenaline. The impact of overcoming this customer targeting, identification and reach challenges for the commercial market, has given international and pan-African businesses new potential for customer engagement and more personalized targeting which will lead to staggering growth on the continent.
International advertisers have been fastest to see the potential to penetrate African markets via locally relevant channels and demand a local product which enables them to access the data.
One of the key benefits is that you can reach more people, what’s the current customer reach?
Through the deployment of the Adrenaline mobile advertising platform across leading mobile network operators on the continent, Adrenaline currently has 3.58bn monthly impressions across its mobile operator channels, publisher and ad-exchange network. Terragon is directly connected to 150m in Sub-Saharan Africa. To put this into context, Facebook has around 80 million subscribers in Sub-Saharan Africa; Adrenaline has 80 million subscribers in Nigeria which again outstrips Facebook’s 18 million Nigerian subscribers.
What is the potential?
Opportunities for growth are high on the continent, with a growing middle class, and with market penetration of mobile higher than access to the internet and bank accounts. The company is currently executing a joint project to monetize MNO channels across 13 African countries having achieved the mandate to monetize their SMS, USSD, IVR, Notification and Web channels.
The deployment of the Adrenaline mobile advertising platform across the continent allows advertisers to reach a significant amount of existing mobile users in Africa. With further potential to capture the over 70% of Africa’s 1.2bn population currently outside digital services, Terragon aims to reach 500m subscribers by the end of 2018.
How do you see the sector changing in the foreseeable future?
Having identified data and digital services as growth drivers regionally, the opportunities for TMT players are manifold. This has made it attractive to serve both international and pan-African businesses, looking to penetrate the emerging middle-class African consumer.
Data in the age of mobile and digital is relevant to every business vertical and so in the next 12 months, I see Terragon serving multiple clients across several industries, being in the middle, and powering something very dynamic and invaluable.
What are your hopes for the TMT landscape in the next few years?
Partnerships and cross-industry collaborations will be key to unlocking the potential in the African Market. The private sector can only grow as far and as fast as the public sector will let us. No single company can meet this challenge alone, therefore we must engage with the public sector to deepen the innovation we are currently leading.
As the commercial landscape continues to evolve in Africa the ability to deliver measured, guaranteed results will be the differentiator to grow Africa’s untapped market potential. As the world evolves to data and mobile eats Africa, we must continue to innovate in Africa for Africa.
Terragon is transitioning from being a pure digital media business to becoming more focused on productive and valuable ways to use the data we have access to generate significant value for our clients and partners.
Our story exemplifies how African problems can be solved by African companies; often in the best position to resolve them. We have solved several of them already and we’ll continue to draw strength from our history.