Like many possibly millions(?) of viewers in Kenya, Uganda, Tanzania, Rwanda, South Sudan and Burundi last night I tuned in to watch the currently on-going Tusker Project Fame (TPF) TV Show which I normally catch every Sunday evening. Its been something of a ritual for me during the past few years to watch and listen to the contestants who range from the very good to those who clearly will never make it. Whatever the case, there is no doubt that TPF is East Africa’s biggest reality TV Show. Therefore, it was something of a surprise last night when I saw not one or two ads but actually three different TV ads for e-commerce startups in Kenya.
The first ad I spotted was for Rupu which is a daily deals web site that has been operational in Kenya for 3 years or so. I have to admit that their ads seem to be one of the cleverest ones in terms of its use of simple slapstick humour that anyone can get. They are short and to the point. The next ad I saw is for Cheki which is arguably the leading web site in Kenya for buying and selling cars goes into a humorous and digitally animated short clip that shows you how to use their web site – its very practical. Lastly, the big daddy of all the ads has to be OLX which has signed up popular comedian Eric Omondi as their brand ambassador who has different long form ads every week on TPF. The OLX ads are elaborate and focus on testimonials as well as how their web site works, in detail. The amount of money all of these e-commerce players must be spending to advertise on TPF must be a fortune and especially OLX who have a spot that runs for significantly longer than Cheki’s or Rupu’s – ALL the big boys of e-commerce in Kenya are slugging it out on TPF with the exception of Jumia.
This TPF TV Ads trend as explained got me thinking about the dot-com bubble in the US when e-commerce startups spent upwards of US$ 1 Million each to buy slots during the Super Bowl 2000. Below is an except from the web site Motleyfool on this phenomena:
The Super Bowl is more than just a championship sporting event. It’s also a national holiday of sorts, and for dozens of companies, it’s the perfect annual showcase for their brand. The Super Bowl is the one time of the year when millions of viewers actually pay attention to the commercials. On Jan. 30, 2000, at the height of the dot-com bubble, those millions who tuned into Super Bowl XXXIV were treated to one of the most start-up-saturated ad blitzes ever seen. During breaks in the action, a cavalcade of dot-com darlings paid $1.1 million per 30-second ad spot to sell a nation of newly minted market millionaires (and many more who had missed out) on all manner of dubious enterprises.
Now, I am not saying explicitly that this is exactly what is happening in Kenya but for sure we are seeing a situation where there is a massive land grab of sorts for the digital consumer in Kenya. One thing to note though is that Rupu, OLX and Cheki are all part of much larger global businesses that have deep pockets to invest in the long haul so as to effectively lock-in Kenya’s e-commerce consumers. Rupu is owned by Ringier which is a Swiss based company with a global presence in publishing and digital content. OLX is owned by South Africa’s MIH with investments in digital content businesses globally. Lastly, Cheki is owned by One Africa Media which received major funding earlier this year from SEEK, Australia’s and New Zealand’s largest careers web site.
Going forward, the caveat for Rupu, OLX and Cheki is whether or not they will be able to generate revenues that are anywhere near what they are currently spending on marketing both offline and online to grow marketshare. At the moment, it seems that their marketing costs to drive growth must seriously outweigh revenue as it stands which sounds very similar to the dot-com bubble of 13 years ago. On the surface, it would appear that Kenya could be headed for its very own “.KE” bubble on this basis and perhaps it may take a few years to see whether this is indeed the case at hand. However, one thing is certain, the TV Ads from Cheki, OLX and Rupu are certainly as entertaining as they get on TPF and I am happy to watch them when they do come on, just like the now legendary annual Super Bowl TV Ads in the US. Game. On!