The informal economy is Africa’s new frontier for growth. Previously forgotten and disregarded, the informal economy on the continent is alive and growing into a significant contributor to the bottom line for many businesses. “This is where the next surge of expansion is,” says The Creative Counsel (TCC) joint CEO Ran Neu-Ner, “and if you are not playing in this space then you’re missing out.” [hidepost=9][/hidepost]
Africa has a massive emerging middle class which provides an expanding consumer base for business. In a recent Africa Pulse report, the World Bank said consumer spending accounted for more than 60% of sub-Saharan Africa’s buoyant economic growth with a forecast that this would accelerate to more than 5% over the next three years, far outpacing the global average.
Understanding the African consumer is key to the success of brands doing business on the continent. “Multinational brands cannot adopt a cut and paste approach to marketing locally. Although Africa is a huge continent it is made up of small cluster communities whose buying trends and behaviour are unique.There has been a complete shift in the go to market strategies of companies,” says Neu-Ner.
Although many are still struggling financially, Africa’s population remains very aspirational. From the latest fashion labels, mobile phones to banking services and food brands, cars and clothes to financial services and entertainment, it is at the bottom of the pyramid that businesses need to invest in having conversations with this group of consumers.
A change of strategy
“The classical approach of kicking off a marketing campaign with above-the-line like a major television or radio advertisement, then erecting a billboard and after that generating below-the line initiatives based on the above-the-line concept is no longer the norm. Just five years ago 80% of campaign budgets were allocated to television adverts and billboards but now the trend has shifted to below-the line – in-store promotions, out-store promotions and field-marketing.
“The use of community members as brand ambassadors and sales promoters in peri-urban and rural areas is a growing trend. This business model is changing the marketing landscape. Its success in using field operatives to market brands to their own communities on a mass scale is causing brands and advertisers to commit more of their funds to activation projects than above-the-line advertising.
“Today’s marketing is more about dialogue than one-way communication as represented by above-the-line advertising. In developed societies, the dialogue tends to happen online or via smartphones. In African rural and remote communities, it happens face to face. And the dialogue is not just with and within consumer communities. It flows back into the brands.”
TCC’s operating model has a positive spin off in South Africa as it provides jobs for people who are otherwise deemed unemployable – by using them as brand ambassadors and sales promoters in peri-urban and rural areas. And it does so at a rate of 15,000 people at any given time.
In addition, TCC’s way of triggering employment is important because it is not a corporate social investment initiative. It is a fundamental part of the way TCC makes its own living – providing activation, marketing and advertising services to large companies. In other words, TCC succeeds if the unemployable succeed. It makes development an attractive commercial option in which everyone involved wins – from the severely disadvantaged to the most sophisticated creative talents and the brands they promote.
At the same time, TCC’s business model is changing the marketing landscape. Its success in using field operatives to market brands to their own communities on a mass scale is causing brands and advertisers to commit more of their funds to activation projects than above-the-line advertising.
TCC co-founder and group CEO Gil Oved has a number of examples in which rural women working as brand ambassadors have caused experienced marketers to adjust entire campaigns. Although the women have no education, they do have enormous insight into the needs of their own communities and how those communities respond to particular products.
A strong technology component underlies the story, as TCC uses a bespoke system to enable some 500 people to manage the 15,000 field operatives and ensure that the result promised to clients are both measurable and deliverable. However, the story is predominantly one of human interest – with powerful positive consequences to business and the economy at large.