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This is a little spoiler for our upcoming African Tech Startup Funding Report (Coming soon!) – 2022 was a big year for marketing tech from an investment standpoint. That fact may get lost in the big headlines, but the future looks bright for this increasingly important sector.
Twelve marketing tech startups raised funding last year, up 20% from 2021. This equates to 1% of him in Africa overall, an increase of 242% from 2021. 2021 will see a 281.5% increase from 2020, continuing strong growth in this regard within the marketing space.
So why do we hear so little about this universe? occupy a part.
Chibuike Good News is the co-founder of a Nigerian company do chase, a cross-channel digital advertising platform for emerging markets. The platform enables businesses and agencies to leverage data, technology and AI to reach their target audience. Businesses use Dochase to increase awareness, attract customers, increase online sales and app installs.
According to Goodnews, the focus is on TV because the primary spenders are traditional businesses whose main purpose is to raise awareness. According to him, the space is ripe for chaos for some time.
“Disruption must be a gigantic technology solution with the ability to aggregate first-party audiences, leverage deep-targeting technology, and improve performance. There are bright entrepreneurs,” he said. “Martech is a huge capital-intensive sector and there are currently no African giants in the sector, mainly due to high technical requirements and lack of funding. But the market is huge and promising.”
Another challenge besides funding is the proliferation of the Internet. With over 60% of Africa’s population still offline, it makes sense for businesses to focus on primarily offline channels such as direct-to-customer sales, flyers, radio and television to reach their customers. increase. Digital alternatives are also thin on the ground. But Goodnews says it’s been a period of increased usage since the pandemic and, as we’ve seen, increased funding.
“When people couldn’t go outdoors, digital technology solutions for marketing went mainstream,” he said. “Many people who explored digital technology solutions have continued to use them ever since, often reaching more people, measuring their performance, being creative, and not being able to see them offline. I just realized I can access the functionality.”
A digital solution like Dochase can tell you the source and cost of every user you acquire.
“Our target audience is moving online, reaching all existing and potential customers across our website, apps, social media and mobile phones,” said Goodnews. “So companies that want to reach them will have to go digital with technology solutions. Technology will continue to grow in its share of marketing wallets as it capitalizes on the growth of the Internet.”
The main advantage of online marketing is cost. That means startups in particular are more likely to adopt a digital-first approach to marketing. Demand is therefore growing and investor interest is still in its early stages, but in the last few years he has had notable rounds such as Adzily, Terragon and Wowzi.
“Local investors do not understand martech, so they take cautious steps. With limited funding, most investments are moving to fintech and other less complex sectors,” said Goodnews. said.
The total advertising market in Africa is around US$5 billion, not a big enough number to tempt most VC firms. Still, there are signs of progress and Goodnews is optimistic about the future.
“Investor interest in marketing technology will change as more investors see success stories. You’ll find that you’ve become,” he said. “With 70% of the mobile phone market in Africa, Transsion has become an advertising giant. Amazon has generated over US$6 billion in advertising revenue in just three years. We see a future where we can generate our own advertising revenue to power the free internet.”
He says the space needs visionary founders and investors.
“Despite the huge opportunity, there is a huge funding gap in marketing technology. But when investors see success stories, they look more closely. Succeeds on top of leading direct-user or first-party solutions such as , social media, data and mobile hardware.”
If more African start-ups are able to build these solutions than ever before, there are signs that customers and investors will follow suit.
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