Saturday, July 5, 2014

Using Facebook's Audience Insights to Estimate East Africa's Digital Market Size

Global social media giant Facebook has over 1Billion monthly active users. The immense popularity of Facebook reflects easily in internet usage patterns among people in East Africa. Back in 2010, a research by Synovate indicated that 79% of internet users in Kenya had Facebook accounts. The Communications Authority of Kenya( CA) - formerly CCK places the number of internet users in Kenya at 21 million as at December 2013.

I am skeptical about the CA's estimation formula for estimating number of internet users in Kenya. However if the trend highlighted by Synovate in 2010 remained, and CA's number was close to accurate, there would be about 16 million Facebook accounts belonging to Kenyans. That said many people having a Facebook account reflects how many people became aware of it and signed up, not necessarily those who use it actively (eg. at least once a month). The 16million estimate on Facebook users would therefore not be a reliable benchmark for market estimation among start ups or corporate marketers.

Of Facebook's Audience Insights

Shortly after the PIVOT East conference in June, I had a chat with Matthew Papakipos - Facebook's Engineering Director that was an eye opener. Matthew took me through Facebook's new audience insights tool that helps to reveal not only Facebook user demographics (anonymised) but also inferences about the general internet market place. The tool which was launched for US markets early May, and is now available in other markets will change how regional digital entrepreneurs estimate their market sizes.

To feed my never ending curiosity about mobile devices used in the East African market place, I used the tool to quickly generate a table comparing some key numbers. The tabulation below begins to tell how East Africa, though with much potential falls behind Egypt, Nigeria and South Africa on active internet use.



Country

Population (million)²
Facebook Monthly Active People¹
TotalOwn Mobile DevicesOwn Android Devices
1Kenya 43.184m-4.5m3m-3.5m1m-1.5m
2Uganda36.351m-1.5m1m-1.5m250K-300K
3Tanzania47.781.5m-2m1.5m-2m600K-700K
4Rwanda11.46350K-400K300K-350K100K-150K
5Burundi9.85100K-150K70K-80K20K-25K

East Africa³148.627m-8m6m-7m2m-2.5m

Ethiopia91.731.5m-2m1.5m-2m500K-600K

South Africa51.1910m-15m9m-10m2.5m-3m

Nigeria168.810m-15m10m-15m3m-3.5m

Egypt80.7215m-20m10m-15m7m-8m

¹ Facebook Audience Insights as at 4th July 2014

² World Bank 2012 Country Statistics

³ Aggregate numbers for 5 East African countries

A further glance at the audience insights roughly hints at the popularity of feature phones across East Africa at about 50%. From the insights, about a third of mobile devices owned by Facebook's monthly active users run on android - by far leading other smart phone operating systems such as Windows and Apple IoS. Popularity of android in Egypt stands out, estimated at about 70% of mobile devices (using the lower limit data points).

A promising market place for digital entrepreneurs 

A closer look at the figures above indicates much potential for East Africa as a common market place among digital entrepreneurs. The region's close to 150 million residents compares only with Nigeria's population of 170 million. East Africa's 150 million people coupled with the prospects of integrating the traditional East African economy with Ethiopia (92million people) portends even much more for regional digital entrepreneurs.

Assuming that  East Africa's people will rapidly embrace internet and mobile technologies, the next few 3-5 years may deliver a digital revolution to the economies involved. This is especially if the regional economies persist at increasing coverage of 3G and 4G across the countries. The promise of this increased mobile network coverage is quite evident in Ethiopia and Rwanda.