Ghafla, Kenya’s popular entertainment is building a new business model as a new growth strategy away from online advertising that the founder says is going to grow very slowly.
According to the founder Sam Majani, “Web advertising is cheaper, unassailable because web companies have better cost structures than traditional media. Web advertising is much more measureable than traditional advertisers are slowly opening up to online advertising opportunities.”
He added that most of the money going to online ads end up on Google Adsense and Facebook Ads which are very efficient, cheap and available. It’s even more tricky as most firms have just 2% of their total advertising budgets set aside for online ads and there is no solid proof yet that the web converts. Large companies are reporting disappointing results from online advertising and e-commerce too.
It also holds true for all the other internet revenue models: transactions, e-commerce, subscriptions etc, that they are going to grow very slowly. The conclusion is that for an internet company to thrive in the African market, it must seek more than one revenue stream. That is what Ghafla! now seeks to do.
Earlier, there were debates in the tech scene on viable business models for startup founders. It hit hard when Cheki Africa Carey Eaton said that a website is not a business in days when even kids in junior primary have personal blogs and websites. This is one move to prove that an audience can be monetised apart from blogs having paywalls.