Digital marketing is becoming a major driver for Africa’s small and medium sized businesses

Small and mid-sized businesses are increasingly turning to social networking sites and mobile apps to tap into the burgeoning African internet economy, seen more than doubling to US$200 billion by 2025.

A joint survey, dubbed the Africa MSME Survey Report 2023, tracking 440 small and
medium-sized businesses in Nigeria, Kenya, South Africa and Ethiopia shows more than half of these businesses have gone online.

Some 53% are marketing their businesses over the internet, 45% sell products and services online and 24% use digital platforms to stock up on wares, according to the survey by research firm GeoPoll together with Africa 118.

“Online advertising is dominant across all industries apart from agribusiness, food production and manufacturing, where most businesses use online channels to sell,” said survey researchers.

Social media channels like Facebook, Twitter, Instagram and WhatsApp are the most popular product and service promotion channels used by 67 % of small businesses in Kenya, Nigeria and South Africa. Conversely, most (47%) companies in Ethiopia rely on billboards and traditional media to advertise.

These businesses are looking to spend more on digital advertising in 2023, albeit at a slower rate, bucking similar global trends. 59% of businesses confirmed spending more on digital marketing platforms, which is less than 71% in last year’s study.

Growth in reliance on internet-based platforms was higher in Kenya, Nigeria and South Africa, which recorded a slight increase from 72 per cent the previous year to 75 per cent in 2022.

African e-commerce users have grown at a compounded annual rate of 17.9 per cent since 2017 when there were only 139 million users. According to the United States Department of Commerce International Trade Administration (ITA), e-commerce users on the continent are expected to exceed half a billion over the next three years.
Rising internet, smartphone penetration and growth in the world’s youngest population are fuelling this growth.

“Africa leads mobile device web traffic generation, with 69% of its total web traffic consisting of mobile internet users as of 2021 and is forecast to be almost exclusively mobile-based market by 2040,” said ITA.

These trends are mirrored through the rise in funding towards e-commerce startups, now the second most funded ventures in the continent after Fintechs.

Disrupt Africa’s tech startup funding report 2022 shows the sector’s fundraising, which enjoys a four-year boom, recorded annual growth of 70.7% to US $556.7 million from 74 startups and accounts for 16.7 per cent of all funds raised by African startups last year.

“Over these years, retail-tech has emerged as an area attracting substantial investor interest, and has helped drive the growth in the sector,” said The Disrupt Africa report.

The World Bank estimates that small businesses account for 90% of all businesses in Africa, with data from MasterCard showing that Sub-Saharan Africa alone has 44 million micro, small and medium enterprises (MSMEs).

QUESTION ONE [20]

Explain the key factors driving the growth of digital marketing for SMEs in Africa and how SEO plays a pivotal role in this context. Additionally, discuss the challenges that SMEs may encounter when implementing digital marketing strategies and SEO in the African market.

QUESTION TWO [20]

Discuss how effective keyword research can benefit small and medium-sized businesses in Africa aiming to leverage digital marketing. Highlight the challenges businesses may face in keyword research and explain how to overcome these challenges.

QUESTION THREE [10]

Analyse three specific aspects of this changing landscape of SEO and its implications for Africa’s small and medium sized businesses – providing insights into how they can navigate and leverage these changes for their benefit.

QUESTION FOUR [20]

Examine the significant barriers, considerations, and data protection aspects relevant to implementing digital marketing strategies for small and medium-sized businesses in Africa. Discuss how businesses address challenges in technology, skills, budget, resources, and business priorities in the context of evolving digital marketing practices and data protection regulations.

Answers to Above Case Study Questions

Answer 1: An analysis of the given case study indicates that there are many factors that drive the growth of digital marketing for SME’s in Africa. Some of these are identified as increased penetration of the internet across the country, higher adoption of mobile technology among Africans, rising trends in e-commerce, increasing use of social media and easy accessibility to digital marketing tools.