Digital Advertising: So Much for So Little

Billboards, radio, television, and press advertisements are still fundamental forms of advertising, particularly in traditional economies with poor access to digital media. Digital advertising is, however, becoming more common in metropolitan areas due to the rising usage of smartphones and internet connectivity. Businesses use social media sites like Facebook, Instagram, and TikTok to connect with younger, more technologically adept audiences and customers. Traditional techniques continue to be essential for reaching larger audiences despite this transition towards digital advertising, but some argue that in a few years, digital advertising will dominate the market. In this article, EBR’s Eden Teshome tells the story of the evolution of advertising practices. 

Advertisement has come a long way in attracting customers: from the steel engravings created by the Egyptians back in the day to the contemporary digital era. Advertising enables businesses to target customers more precisely and helps them gather crucial customer data points. Although the earliest known examples of advertising are considered steel engravings made by the ancient Egyptians in 2000 BC, the first print advertisement was produced in 1472 when William Caxton, an English merchant, diplomat and writer who is thought to be the first person to introduce a printing press into England in 1476, printed advertisements for a book and nailed them to English church doors.

Advertisements in Ethiopia started in the 19th century in the era of Emperor Menelik II. At the time, the “Negarit” [a traditional war drum] was used to proclaim official announcements in public spaces like squares and streets. Although media advertising started sprouting during Emperor Haile Selassie’s reign, mainly after the Second World War, the handful of agencies doing advertising and the activity itself disappeared with the fall of the monarchy and the seizure of political power by the “Dergue” in 1974.

In the early 1900s, advertising on radio and television became a trend. It felt more individualised because it addressed people directly through their radio and TV sets. The introduction of new platforms and media and a marked change in motivation were characteristics of the next era. The evolution of advertising has shifted the emphasis from selling to brand recognition and problem-solving. The consumer was now the focus of the advertisement rather than the product.

The late Wubshet Werkalemahu, a pioneer advertising business owner, could not go unmentioned in Ethiopia’s advertising history. Records show that Wubshet established Anbessa Advertising Agency and created over 10,000 commercials. Wubshet’s business stood apart from other advertising firms not only because he was the founder of the first advertising company, he thought building a close relationship between the brand and the customer was the secret to success. He sought to develop advertising campaigns that told stories and promoted items. Wubshet’s business established a successful reputation recognised by many in the public and private sectors as a viable means of promoting the services and products. Anebessa was renowned for its meticulousness and capacity to design successful marketing programmes.

The evolution of advertising has recently reached some significant turning points since it has continuously had to modify and adapt to fit new platforms and audiences. The internet, which creates the capacity to gather billions of data points on users, is a medium that has had the most significant influence on the evolution of advertising and advertising personalisation.

It all started when internet usage took off in 1992 with the introduction of online services like America Online and Prodigy. When everyone at once started using the internet for personal reasons, marketers seized the chance to connect with customers. They started focusing more on digital content, mainly display advertising.

Facebook alone possesses 98 personal data points, or 215.6 billion data points, on its 2.2 billion users. Over a year, Google collects enough personal data from its users to equal 569,555 sheets of paper among the company’s seven distinctive products, each of which has over one billion, monthly active users. With so many data points available to advertisers, they can create highly targeted and personalised ads.

Data from portal.com shows that at the beginning of 2023, Ethiopia had 20.86 million internet users, with a 16.7Pct internet penetration rate. Analysis shows that between 2022 and 2023, internet users in Ethiopia increased by a little over half a million (+2.6Pct), with 6.40 million social media users and 66.80 million cellular mobile connections, or 53.5Pct of the population.

Ethiopia is placed 137th in ICT adoption and 100th in digital skills among 141 nations in the 2019 World Economic Forum Global Competitiveness Report, trailing its African peers such as Gabon, Zambia, Mauritius, Mali, Lesotho, Botswana, and Uganda, demonstrating poor digital literacy in the respective countries.

According to the same data, the Digital Advertising market in Ethiopia will grow by 7.48Pct from 2023 to 2027, resulting in a market volume of USD81.38 million in 2027. Advertising significantly impacts the economy because it informs consumers about available goods and services and allows them to compare features, advantages, and costs. Consumers and businesses frequently acquire additional goods and services when provided with more comprehensive information.

The promotion of the industries’ goods and services causes an economic chain reaction that generates a net gain in direct sales and jobs, creates indirect sales and employment among the first-level suppliers to the industries that incur the advertising expenditures, and creates indirect sales and engagement among all other levels of economic activity as the sales ripple throughout the economy.

Esayas Gashaw, the founder of Esayas Advertising, established his business twenty years ago. Esayas owns many giant billboards and light boxes throughout Addis Ababa advertising big corporations. Esayas is not worried by the fast-growing digital marketing trend: advertisements on Facebook, Instagram, TikTok, and other social media platforms.

One of Esayas’s giant billboards in Addis Ababa might cost an advertiser up to ETB 700,000 in annual fees. Following the bill that prohibited the marketing of certain products, such as alcohol, Esayas had to adapt specific ways of showing ads to the public. With his new garment business, Esayas now focuses on manufacturing aprons and small light boxes for indoor display.

“I have had a chance to visit other countries where digital marketing is robust,” Esayas says during an interview with EBR at his new garment factory. “In those countries, huge billboards and LED screens displaying ads of corporations are still relevant.”

Founded by Abel Hailu and Girum Mekura, Awaj is a digital marketing business. Awaj runs ads for other companies on social media platforms, mainly Facebook and Instagram. Girum, unlike Esayas, thinks that digital marketing can threaten the growth of traditional advertising practices.

Awaj offers a variety of packages to its clients. One offer costs ETB 1,500, lasts 1–5 days, and can reach up to 40,000 people. The maximum package costs ETB4,000 lasts for about 1–15 days, and may typically reach up to 110,000 people.

“In digital marketing, you can decide which geography, demography, or social class you want to reach,” Girum explains. “The greatest benefit is the evaluation of its outcome.”

How many people viewed the ad, liked it, commented on it, or called the business to ask about the service or product—all this data recorded can help make better marketing strategies and decisions.

The changes in advertising practices will continue for a while. As Ethiopia has yet to catch up with digital marketing practices, the trend is changing again. Now, advertisers want storytellers—social media influencers to tell their brands’ stories to the public.

A famous TikToker named Bertemios told local media he earns up to ETB 100,000 to integrate a brand story into his comic content. Having famous TikTokers with hundreds of thousands of followers include the story of a brand on their pages is catching the interest of some advertisers who offer products and services for mass consumption, changing the advertising trend yet again.

Jason Pitters is a marketing communications expert who has spent the last eleven years working in areas of communications and digital marketing in Addis Ababa. He argues that traditional advertising is already in extinction in the [urbanised] global market. He claims a similar trend will follow the rest of the world.

“These days, unless they are unaware of digital marketing, no one should go to a local TV station to promote or advertise their recently built hotel or other product that they are looking to advertise or promote and pay ETB190,000/60 second,” Jason says on one of his TikTok videos. “Now telling the story of a brand is also fighting for a space replacing digital marketing as we know it.”

According to a statista.com analysis and opinion, digital marketing has surpassed traditional advertising. With more than half of all advertising expenditures occurring globally in 2018, digital marketing became the primary advertising medium. Because people’s behaviour has shifted from the offline to the internet world, the market for digital advertising is expanding equally. Internet users increased from 2.3 billion in 2012 to 5.1 billion in 2022.

Numerous significant tech firms lead the market for digital advertising. Alphabet, Meta platforms such as Facebook & Instagram, Microsoft, Facebook, Amazon, Tencent, Baidu, ByteDance, and other significant businesses are among the market’s key rivals. As a result of the quick rise in social media usage and online purchasing, growth in the markets for video, banner, social media, and search advertising is comparable to that of the classifieds market. It is higher than it is for these media.

“The digital advertising market was exhibiting signs of strong growth before the pandemic,” says Girum. “However, the pandemic has accelerated digital adoption, and the effect will last indefinitely. As a result, the market for digital advertising will grow more robustly in the years to come.”

Digital advertising has emerged as one of the most crucial marketing instruments. According to statista.com, a German online platform specialising in data gathering and visualisation, which offers statistics and, reports, market insights since 2007, Global digital advertising spending will hit an all-time high of USD 680 billion in 2023 as a result of increased internet penetration rates and the ongoing demand for online content, particularly during the pandemic.

This number is even more astonishing, representing almost 70Pct of all global advertising investments in the year. Even though this innovative and exciting kind of advertising has seen significant growth in many regions worldwide, the digital advertising market is steadily consolidating and becoming more competitive.

Although it’s necessary to understand the changing dynamics in the advertising of services and products globally, it’s also very wise to notice the degree of digital literacy, level of urbanisation, people’s culture and availability of modern communications technologies and overall lifestyle of the specific markets we operate to decide on advertising platforms. In a recent study by an American international NGO about how and where people source their information, news and media reports in Ethiopia, 98Pct of the respondents said that they get their news information from mainstream media; in fact, from the three state and party-affiliated television stations. Only two per cent, primarily urban-based digital natives, young people to be precise, source their information from social media, where most digital ads circulate. This development shows that, although the global advertising trend is more inclined towards online platforms, in developing countries where urbanisations, electrification and telecom penetration are still low, most people still depend on traditional media for content.

11th Year • July 2023 • No. 119 EBR