display.io part of the IAB Open Measurement working group
The IAB Technology Laboratory today released its Open Measurement Software Development Kit (OM SDK), a set of tools designed to seamlessly facilitate third-party view ability and verification measurement for ads served in mobile app environments—without various measurement provider SDKs and systems previously required. Market adoption of the OM SDK will support scaling in-app measurement, increase confidence and flexibility for buyers, and consolidate fragmented inventory. Major app publishers and ad SDK providers, as well as third-party measurement/verification providers tested the OM SDK in a limited release period that kicked off in October 2017 to ensure that it is fully functional and ready for industry-wide use.
Version 1.0 of the OM SDK includes:
Availability on iOS and Android platforms
“Begin-to-render” impression measurement
Viewability verification, as per the Media Rating Council (MRC) definition
Multiple ad types (display, native, native video, HTML video, etc.)
Video verification via all versions of the Digital Video Ad Serving Template (VAST)
Simultaneously, the IAB Tech Lab is launching a voluntary compliance service that validates a company’s OM SDK integration and ensures that the measurement provider tags will work within an organization’s deployment of the OM SDK.
“This release finally brings standardization to the in-app measurement landscape for brands. We look forward to rolling out this update into the display.io ads SDK so that both our brand advertisers and publishers can benefit from enhanced transparency and performance”, said Stephen Caffrey, CEO of display.io
Measurement providers across the ecosystem are already taking the necessary steps to implement the SDK within their distinct protocols. In addition, the IAB Tech Lab has published the “Open Measurement SDK Onboarding Guide for Integration Partners,” which will provide guidance for deployment and use.
After several weeks in development the new display.io SDK has been released for developers to integrate. This huge product update promises better stability, performance and of course increased ad revenue for our all developer partners on both Android and iOS.
New Android SDK developments:
1. New Ad Units : Native Ads and Rewarded Video
2. Improvements to interstitial Ad Unit UI / UX
3. Extended support for rich media on Interstitial
4. MoPub and AdMob Adapters support for Native and Rewarded Video in
New iOS SDK:
1. Support for the Interstitial ad unit
2. Richmedia (MRAID 3.0) Support on Interstitials
Download the latest SDK by registering here (New Accounts) or logging in here (Existing Accounts)
We’ve also updated our Support Portal so that its easier to find answers to your technical questions. Check it out here.
Programmatic – Ineffective measurement is holding back marketers from spending more
Marketers are holding off on increasing their programmatic budgets as a majority of them believe that poor measurement is still a major issue in programmatic.
According to a survey among 214 marketers with programmatic budgets of $100k a year by programmatic agency Infectious Media, almost 90% said they would justify increasing their expenditure if measurement was improved.
Measurement is the top digital challenge among marketers. 66% of respondents said that measuring campaigns was either ‘very’ or ‘extremely’ challenging.
Another dominant issue holding back marketers from higher programmatic investment was high viewability, followed by brand safety protection.
“It’s clear from our study that advertisers are waking up to the fact that the measurement model most have relied on for their programmatic campaigns is broken and digital ad spend is being held back as a result,” explained Martin Kelly, CEO and co-founder of Infectious Media. “Advertisers are looking to agencies to show greater leadership on how the system can be improved.”
Additionally, 64% of respondents added that a lack of education and transparency were adding to the difficulty in accurately measuring programmatic campaigns.
“Unfortunately, most have been content with the easy option of spending advertisers’ money on cheap inventory that meets a given target on clicks, regardless of the risk of fraud or the limited ROI this delivers. Agencies have a responsibility to educate their clients on the more sophisticated approaches that are available, offering them metrics that better fit their business objectives and challenging them to think beyond clicks,” Kelly added.
Meanwhile, advertisers are still considering clicks to be the most important measure of success of a campaign. This comes despite reports on fraud distortion of such clicks that have shown it is a flawed metric.
56% of respondents consider clicks the most important metric, whilst 45% consider cost per click more valuable and 43% voted for click-through rate.
John Gillan, Manging Director for the UK and Northern Europe at Criteo, said:
“These findings certainly highlight the heightened demand for improved measurement, and programmatic marketers need to look at new ways of doing this. For example, assessing Customer Lifetime Value (how much value a customer delivers to one retailer throughout a period) rather than just looking at CPCs and CPMs. However this comes with its own challenges, meaning marketers should be considering better data collaboration in a bid to accelerate their ability to develop a complete, holistic view of their customer-base. Only by doing this can marketers start to think beyond short-term, transactional gains and look towards maximising the lifetime value of their existing customers.”
Mobile app advertisers were subjected to 30% more fraud throughout Q1 2018, according to the latest State of Mobile Fraud report by AppsFlyer, the mobile ad company. Based on 10 billion installs of 6,000 apps, the report found that financial exposure to fraud during the first quarter of 2018 reached $700-$800 million globally.
Overall, fraud increased 15% compared to AppsFlyer’s previous study. Part of this is driven by an ever-morphing and adapting fraud ecosystem. When one strategy fails, fraudsters are quick to adapt and launch a different type of attack.
The findings also highlighted the types of fraud causing the greater damage. As such, device farms were generally more damaging over the summer. However, the launch of Protect360 resulted in volume loss and instead click flood rates increased. For Q2 2018, bots are predicted to be the leading drivers of mobile ad fraud (30%).
However, AppsFlyer warns that fraud is not only targeting specific apps. Instead, 22% of apps now have over 10% fraud, whilst fewer than 12% are exposed to less than 30% of fraud.
Unsurprisingly, shopping apps are those hit hardest. Given their high CPI and large scale, they were the most heavily hit app type, followed by finance and travel apps.
In terms of operating system, Android continues to be under greater attack than iOS. Fraud on Android was 3x that of iOS. This is partially due to Android being an open OS rendering it easier to attack. At the same time, the sheer reach and scale of Android make it a more attractive target.
What can businesses do to stay protected against mobile fraud?
AppsFlyer recommends to regularly update SDKs, monitoring one’s data and getting a comprehensive fraud assessment.
Machine Learning – A Q&A With our very own Data Scientist – Sergii Nechuiviter
Name: Sergii Nechuiviter
Title: Senior Data Science Engineer
Favorite Food: fried potatoes
Favorite Music Genre: epic music from movies and games
Where and what did you study at university?
Moscow Institute of Physics and Technology (State University)
Wide study of physics and deep study of machine learning.
Who are the influences in your professional life and why?
I learned a lot from my MIPT lecturer of machine learning – Konstantin Vorontsov. He gave me a deep understanding of theoretical and practical principles of data mining. I returned to those lectures and seminars multiple times during my career.
What got you interested in pursuing data science as a career?
Actually, I am interested in Computational Intelligence. But, being a more practical than theoretical person, I like to work in the field of data science and machine learning as it involves me more tightly in the real implementation of machine intelligence.
What are some of the projects you currently working on at display.io?
At display.io I am involved in the engineering of new predictors of the probability of conversion for the given ads.
What are the techniques you are using to solve these challenges?
For training of those predictors the Python-based tools are used: numpy for linear algebra, scikit-learn for some simple machine learning, dask for pure python distributed computations and resource management and our own implementation of more complex machine learning algorithms like FFM.
In your opinion what are the issues affecting mobile marketing that applied data science can improve?
I think applied data science boosts and speeds up abilities of “classic” analytics to select the best marketing strategy. With machine learning tools data scientist can analyze available data deeper: makes audience targeting more precise, quicker reacts to changes in trends and moods.
CONSUMERS HAVE LONG wondered just what Google and Facebook know about them, and who else can access their personal data. Internet giants have little incentive to give straight answers — even to simple questions like, “Why am I being shown this ad?” On May 25, however, the power balance will shift towards consumers, thanks to a new privacy law in Europe that restricts how personal data is collected and handled. The rule, called General Data Protection Regulation or GDPR, focuses on ensuring that users know, understand, and consent to the data collected about them. Under GDPR, pages of fine print won’t suffice. Neither will forcing users to click yes in order to sign up.
Instead, companies must be clear and concise about their collection and use of personal data like full name, home address, location data, IP address, or the identifier that tracks web and app use on smartphones. Companies have to spell out why the data is being collected and whether it will be used to create profiles of people’s actions and habits. Moreover, consumers will gain the right to access data companies store about them, the right to correct inaccurate information, and the right to limit the use of decisions made by algorithms, among others.
The new privacy law protects individuals in the 28 member countries of the European Union, even if the data is processed elsewhere. That means GDPR will apply to publishers like WIRED; banks; universities; much of the Fortune 500; the alphabet soup of ad-tech companies that track you across the web, devices, and apps; and Silicon Valley tech giants.
As an example of the law’s reach, the European Commission, the EU’s legislative arm, says on its website that a social network will have to comply with a user request to delete photos the user posted as a minor — and inform search engines and other websites that used the photos that the images should be removed. The commission also says a car-sharing service may request a user’s name, address, credit card number, and potentially whether the person has a disability, but can’t require a user to share their race. (Under GDPR, stricter conditions apply to collecting “sensitive data,” such as race, religion, political affiliation, and sexual orientation.)
GDPR has already spurred, or contributed to, changes in data-collection and -handling practices. In June, Google announced that it would stop mining emails in Gmail to personalize ads. (The company says that was unrelated to GDPR and done in order to harmonize the consumer and business versions of Gmail.) In September, Google revamped its privacy dashboard, first launched in 2009, to be more user-friendly. In January, Facebook announced its own privacy dashboard, which has yet to launch. Though the law applies only in Europe, the companies are making changes globally, because it’s simpler than creating different systems.
The law’s impact will extend well past the web giants. In March, Drawbridge, an ad-tech company that tracks users across devices, said it would wind down its advertising business in the EU because it’s unclear how the digital ad industry would ensure consumer consent. Acxiom, a data broker that provides information on more than 700 millionpeople culled from voter records, purchasing behavior, vehicle registration, and other sources, is revising its online portals in the US and Europe where consumers can see what information Acxiom has about them. GDPR “will set the tone for data protection around the world for the next 10 years,” says Sheila Colclasure, Acxiom’s chief data ethics officer.
Beyond such moves, the law’s emphasis on consent, control, and clear explanations could prompt users to better understand and reconsider the ways they are surveilled online. Meanwhile, privacy activists plan to use GDPR as a weapon to force changes in corporate data-handling practices.
In short, the new privacy law is a chance to flip the economics of the industry. Since the dawn of the commercial web, companies have been financially incentivized to hoover up data and monetize later. Now, EU consumers will have the freedom to opt in, rather than the burden of opting out. That emphasis on consent creates a financial reward to building consumer trust.
GDPR presents “a real chance to renegotiate the terms of engagement between people, their data, and the company,” rather than mindlessly clicking away a terms-of-service agreement, says David Carroll, associate professor of media design at The New School. Carroll says data collected by activists “might be the basis for new investigations and ways to keep the companies accountable.”
The need for transparency and accountability is more vital than ever. Clicking to accept an impenetrable terms-of-service document once seemed like a no-brainer. The upside was incredible efficiency and the downside, it seemed, was just some annoying shoe ads stalking you around the web. But the past year has shown how the same personal data has been weaponized to suppress minority voters, radicalize young white men, exploit political beliefs to sow division, and possibly swing elections. In a white paper called “Corporate Surveillance in Everyday Life,” researcher Wolfie Christl diagrams how personal data is used to influence behavior and determine what products you see, what services you have access to, and what prices you pay in areas from shopping to banking. “Every time we click, these companies are trying to figure out, is this a valuable person or this is a worthless person?” Christl says.
Of course, the law has its share of detractors, who dismiss GDPR as more protectionism from the EU, which has challenged American tech platforms on antitrust and privacy grounds with expensive consequences. Then there are concerns about cost. Colclasure from Acxiom calls the data industry the backbone of “free content and free knowledge” online. “It’s either hit a pay wall or these sites are ad-supported for the most part,” she says.
There are potential loopholes in the law. It allows businesses to process personal data without consent for limited reasons, including a business’s “legitimate interests,” which the European Commission says includes “direct marketing,” through mail, email, or online ads.
However, even then companies must take into account a consumer’s expectation of how their data will be used and can’t infringe on the other consumer rights guaranteed under GDPR. In the digital realm, EU consumers also have the added protection of a companion set of rules, called the ePrivacy Directive, that govern electronic communication. Under those rules, which are in the process of being ratified into law, consent is the only legal basis for collecting personal data.
Programmatic native ads – Why you should be using them
Contributor Grace Kaye extols the benefits of programmatic native ads and walks you through how to deploy a successful campaign.
Programmatic native ads have so much potential that I don’t believe is being explored enough today. True, they may not seem all that interesting if you only focus on your bottom line. A good retargeting strategy for display ads might generate more conversions if you’re looking to sell a product.
However, in comparison to display prospecting, case studies from our agency’s clients have shown me that native ads truly shine when it comes to driving traffic and boosting brand engagement in the long term.
Don’t get me wrong; I love display ads. Display is a great way to keep your brand name out there while measuring effectiveness by tracking impressions and reach. But with marketing strategies like business storytelling peaking in this age of content, advertisers should really make better use of the goldmine that is programmatic native.
vs. display prospecting
Native ads are more cost-effective than display ads
Doing native ads programmatically means you get many of the benefits of programmatic display: automated media buying, effective targeting and audience insights for further optimization. A 2016 Think With Google report found that when the “Flex Frames” native format was introduced by The New York Times, “click-through rates increased 6x compared to equivalent banner ads, and viewable impressions jumped 4x.” According to a DoubleClick analysis of traffic across its network in 2017, users are twice as likely to click on a native ad as they are to click on a traditional banner.
We’ve been seeing similar results in our campaigns. A campaign we ran for a client in the banking industry saw a 158 percent higher CTR (click-through rate) for native than for the display prospecting ads. Conversion rate was 450 percent higher for native than for display prospecting.
Here’s the kicker: Cost per attributed site visit was 36X more expensive with display ads as compared to the native placements.
Native ads excel at driving traffic
The goal of a well-implemented native ad is to lead the user to a piece of content that will capture their interest. With that in mind, native ads are great for both prospecting new audiences and promoting content. They can improve brand perception and eventually build a stronger relationship between your brand and your audience.
You should take advantage of the fact that native ads are more likely to be read and shared by their audience, according to Nielsen and IPG Media research conducted on behalf of Sharethrough. Rather than driving traffic to a product page with the aim of a sale, engaging your audience with an interesting article or video that fits the initial context will make a long-term positive impact on your branding.
And I’m not just talking about driving virtual traffic. According to a joint study by Sharethrough and Placed, programmatic native ads are also better at driving in-store traffic than standard display ads.
Native ads are a nicer experience for the user
Say goodbye to the ad-blindness effect of obnoxious banner ads. The abovementioned Nielsen study for Sharethrough found that native ads receive double the visual focus of banner ads. Because Programmatic native ads blend in with the surrounding content, they are adaptable to their environment and therefore look less disruptive than display ads.
At the end of the day, the reason a good native ad is of value to users is that it provides the user with compelling content, which leads to conversions like video watching and signups.
As a bonus, the adaptability of native ads means that they perform particularly well on mobile. Knowing that mobile use is constantly growing and rapidly outpacing desktop, this should be a good incentive to focus more on programmatic in the long run.
How to get programmatic native right
We use DoubleClick Bid Manager (DBM) to build native campaigns. In our experience, DBM allows for programmatic native advertising that gives you greater control over audiences and placements than other tools. It’s also a good inventory source for reach, though there are other platforms to consider, such as AdYouLike, which uses AI to assess the tone of the content of the site to match your ads better to the sites it will be published on. One could also go directly to networks like Outbrain.
To conduct a successful campaign, first, prepare multiple assets. Of course, you’ll need a brand name, a headline, a 128×128 logo and an image (I recommend 1200×627). You can experiment with different CTAs (calls to action), headline length, a longer body or a square image. DBM has a toolthat lets you mock up custom native ads.
Make sure the relevant click-through URL for each creative is associated with the correct ad. This is where you need an engagement piece that fits the context of the ad — something that ties into your long-term branding strategy. As I’ve mentioned, to truly benefit from native, you need to focus on long-term engagement rather than a hard sell, so I suggest linking to an interesting article or video you want to drive traffic to.
Integrate contextual targeting with your ads to make sure they are showing on pages with relevant content. I highly recommend targeting more for content than for audience — in the same client case study I discussed above, content targeting yielded a 3x higher CTR than we saw with audience targeting.
It makes sense that your native ads should work better if they fit the page they show up on. Moreover, if your ads linking to interesting content appear on informative websites (e.g., blogs), information-seeking audiences will be more enthusiastic about clicking through and engaging with the linked content. The more relevant the site category targeting, the better the ad will perform.
As always, A/B test your ads, measure performance and optimize!
Conversion rate- In the Play Store, users have the ability to review and rate all the apps they have downloaded on their devices. We know it helps increasing a conversion rate, but how much?
What we are looking at here is what percentage of the listing viewers are installing the app.
Conversion Rate = # of Installs / # Listing Visitors
It matters a lot since creating traffic to a listing page has a cost — buying traffic or spending time creating it — so getting the most out of it will optimize the budget or the time you invested into it.
Of course, all parts of a listing page can affect the conversion rate: title, app-icon, short description, screenshots, video, feature graphic, etc But there are some elements on a page, like ratings and reviews, that are untestable and difficult to gather data from.
Ratings & Reviews
It is a great way for users to provide feedback to app developers and it also gives an honest indication (not marketed) to new visitors looking for new apps.
Logically, the better ratings and reviews an app gets the better its conversion rate should be, as it shows the app’s likeliness to bring satisfaction to users.
So, how much?
To get a fair comparison, we have selected a Google Adwords non-branding campaign, ran (and still running) in one country, over the last 3 years (launched before we started increasing our ratings), it helped cut away a lot of noise in the data. Its budget was constant, always limited, and its design was updated constantly to follow our listing page and app branding.
Ratings at 3.9, our conversion rate was 36.56%
Ratings at 4.0, our conversion rate was 41.62% (+13.84%)
Ratings at 4.1, our conversion rate was 44.23% (+6.28%)
Ratings at 4.2, our conversion rate was 47.85% (+8.18%)
Ratings at 4.3, our conversion rate was 47.70% (-0,32%)
The strongest gain was made by reaching 4.0
The weakest, a loss even, was by reaching 4.3
Overall, we got a clear increase of our conversion rate, from 36% to 47%, getting a 30.5% growth of our listing performance.
Why was there no increase from 4.2 to 4.3?
Our hypothesis is that in our field — Wi-Fi — the best apps are getting ratings from 4.2 to 4.3. So maybe 4.2 is reaching a point where the ratings are no longer a key distinction. By gathering more data, now that we have raised to 4.4, we should soon be able to understand that part better.
Yes, an app’s ratings and reviews clearly have a huge impact on the conversion rate.
But once a level of quality is reached, it seems that it no longer makes a difference. Our hypothesis is that the exact level depends on the category and what other apps users will compare your app to.
Positive results in the conversion rate is a very long journey — for us, the process of improving our rating took over two years. But solid feedback through ratings and reviews is a sign that an app, by its design, features, and functionalities, properly solves a problem and is worth the struggle of a download.
AdExchanger Talks – The mobile app space remains a silo, thanks to the unique logic of installs and post-install engagement. But that will inevitably change as cross-device identity and omnichannel measurement take hold.The guest on the podcast this week, Tune CEO Peter Hamilton, positioned his company early on in the mobile attribution niche. Now he’s looking ahead to a future when app-tracking tools are merged into large marketing technology platforms.
“ExactTarget’s not just going to lie down and let this happen without them,” he says. “We’ve always thought there needs to be these independent platforms that are ultimately the ones that help police the supply and operate on behalf of the demand.”
The only problem: Independent measurement remains an unrealized dream – and one that’s not at all guaranteed. After all, marketers for the most part trust Google Analytics.
“The way things are going, it’s a less likely dream,” Hamilton says. “If one of the large publishers can provide it free, and their brand of measurement can be trusted, then it’s going to be a difficult competition for those that need to charge for that software.
Also in this episode: Mobile fraud, Hamilton’s stint with the Seattle Opera and lessons learned after Tune lost its Facebook certification.
The intensifying battle for Africa’s burgeoning tech landscape
Long gone are the days when Africa was disparagingly regarded as the White Man’s Burden. Today, is the continent with the youngest demographic in the world, on the brink of a technical renaissance — yet the world’s tech titans are floundering to understand and gain a foothold in this market.
The scale and complexity of Africa’s technical landscape sits at the heart of the problem, and connectivity issues are particularly prevalent. Internet users in Africa represent only 10 percent of the total users in the world, despite representing 16 percent of the world population, according to Internet World Stats. And only 31 percent of the total population has access to the internet, which represents a penetration that is well below the rest of the world at 52 percent.
Africa’s technical future depends on widespread connectivity. As a result, both Eastern and Western businesses are eager to get Africa online. But for every proposed solution, myriad challenges spring up that are unique to the region. For example, when Facebook’s co-founder and chairman Mark Zuckerberg announced plans to connect 100 million people in Africa through the now infamous Internet.org initiative, the proverbial can of worms opened.
The Free Basics app (aka Internet.org) is giving African users free access to a limited number of websites, WhatsApp and Facebook itself — without charging data costs. It works through partnerships with mobile operators (which are left to cover those data costs) and is now available in 63 countries, 27 of which are in Africa. Facebook’s partnership with the Airtel Africa mobile carrier in 2015 has certainly boosted its dominance in Africa.
While Facebook’s popularity in the region is growing, Google isn’t going down without a fight. It is focusing on improving Africa’s infrastructure and, in particular, its last-mile connectivity. Through its Project Link initiative, Google is building links between undersea cables, ISPs and mobile networks. Its first metro fiber network rolled out in the Ugandan city of Kampala in 2015 and has expanded into Ghana, where it plans to build more than 1,000 kilometers of fiber in Accra, Tema and Kumasi. Project Link has subsequently evolved in the independent CSquared business and recently committed an additional $100 million to further its expansion in the African region. And that’s just one of a handful of initiatives Google announced in 2015 to bring the internet to a further seven billion people. How and when will the Western tech giants ever get a return on the investments they are currently making in Africa?
Facebook and Google are also fighting for connectivity over African skies. While Google announced plans for balloon-powered connectivity through Project Loon, Facebook’s plans to bring connectivity to Africa using satellite systems were left in tatters in 2016 after the SpaceX rocket carrying its payload exploded.
Such ambitious plans are laudable, but let’s hope they do not suffer the same fate as the Iridium satellite venture. The company filed for bankruptcy in 1999 after having spent $5 billion to build and launch its satellites and provide a worldwide wireless phone service.
The Iridium service was hit with several setbacks. It was viewed as too expensive for users, and mobile phone adoption was beginning to gain traction in the emerging markets. Also, the service would not have given users complete coverage and would not have worked inside moving vehicles, buildings and many urban areas. This highlights a dangerous assumption that many Western companies tend to make when providing Africa with new technologies: that a watered-down service is better than no service at all.
Another oversight from Facebook and Google is that the same business models will work in Africa and Western nations. A prime example is the revenue models for both tech giants, which rely predominantly on online advertising. However, an ad-supported internet is unlikely to thrive in Africa due to a range of factors, including a lack of digital footprint for many consumers who still carry out most of their transactions offline in cash (with a few notable exceptions such as the widespread use of M-Pesa in Kenya, for example) and low disposable incomes.
While Facebook and Google do earn enough in the developed world to subsidize the growth of their user base in these emerging markets, this does not seem to be a sustainable business model.
So, we are left with a conundrum: How and when will the Western tech giants ever get a return on the investments they are currently making in Africa?
On the other side of the world, China has become Africa’s most important economic partner over the last two decades. With the exception of Chinese telecommunications giants Huawei Technologies and ZTE (who have helped deploy the continent’s mobile networks infrastructure for almost 20 years), China is taking a more cautious approach to entering Africa’s technology scene. However, it could still beat Western technical businesses on two important fronts: cost and innovation.
For example, Tecno is a smartphone maker under the Hong Kong parent company Transsion Holdings. It supplies handsets geared toward African markets, with longer battery life, dust-resistant screens and handsets costing between $50 and $100. Tecno has grown fast, and according to Transsion Holdings’ website, its collective brands in Africa have a more than 40 percent market share in Sub-Saharan Africa. According to CNBC Africa, Tecno itself has a 25 percent share of Africa’s total smartphone market.
We’re also seeing Eastern businesses squaring up to Western rivals with Tencent’s dominant WeChat app, for example, now available in Africa as a direct rival to the Facebook-owned WhatsApp service.
However, I believe tech giants (whether from Western or Eastern locales) need to work closely with African businesses to gain a thorough understanding of the unique challenges and opportunities the continent presents. It’s not enough to land in Africa with a flashy launch and a product that’s completely unsuitable (and unaffordable) to the continent’s population.
We’re already seeing signs of increased collaboration from both sides of the globe. For example, China’s biggest e-commerce group Alibaba recently hit the headlines in Africa as its founder and executive chairman, Jack Ma, used his first visit to the continent to announce the creation of a $10 million African Young Entrepreneurs Fund. Under the scheme, the company will help 200 budding African entrepreneurs and fly them to China to learn “hands-on” from Alibaba.
Innovation through collaboration is the best and only way to succeed in Africa’s technical landscape.
This may seem like a drop in the ocean compared to the established education and training programs run by Western tech companies in the region. For example, Microsoft launched its $75 million 4Afrika initiative four years ago, Google runs its Digify program in partnership with Livity Africa offering a free three-month full-time course on digital skills, IBM funded a $60 million computer skills program and Salesforce.com is also a strong philanthropic force in the region.
However, Alibaba (along with China’s other internet giants Tencent and Baidu) is only just starting to extend its reach beyond China and, as it does so, it will be a force to be reckoned with. Its decision to dip its toe into African waters through an educational initiative is a shrewd move, compared to the heralded and somewhat elaborate projects some of its Western counterparts are trying to introduce to Africa.
To use a clichéd phrase used all too often in the context of traditional aid given by Western countries to populations perceived as desperate and helpless in Asia and Africa, and for many years considered the White Man’s Burden: “If you give a man a fish, he will eat for one day. If you teach him to fish, he will never be hungry again.” In the 21st century, perhaps this concept deserves a digital makeover. While the context in which the saying has traditionally been used is quite patronizing, there is, after all, an element of truth in it, which applies universally, not just to emerging markets.
This is the lesson both Western and Eastern tech companies need to take into account when working in Africa. Innovation through collaboration is the best and only way to succeed in Africa’s technical landscape.
It’s also a premise that we’ve seen played out by Africa’s mobile payment platforms such as M-Pesa, M-Shwari and M-KOPA. These three are Kenyan success stories, where innovation is being fostered through incubator spaces such as iHub and supported by companies like Google, IBM and Intel.
The secret to success in Africa is not just to hand someone a smartphone and hope they use it. We need a scattergun approach where technical and socio-economic constraints are addressed under one umbrella. There is more than one way to fish.
This may be more difficult for Western businesses than their Easter counterparts, as Africa, being an emerging region itself, tends to relate more to those coming from other emerging markets (like China) that understand the challenges the continent faces now and in the years ahead because of their own more recent and relatable journey toward economic development.
Africa is at a technical tipping point. To survive and thrive in this diverse and highly complex marketplace, we need businesses that are flexible and capable of adapting both their products and their business models, which can most effectively work with local companies and talent to develop and promote local content and digital solutions while leveraging the power of the smartphone and widespread connectivity.
As is the case in other emerging markets, the key to enduring success in Africa is education and innovation through collaboration. Not Manifest Destiny.