Doing it right (2) – Sponsored Product Ads on Jumia
Last week Jumia, the “Amazon of Africa”, released its Q3 2019 results.
Here are some quotes from the earning call regarding their eCommerce media business:
“Marketing and advertising, which corresponds to the revenue generated from the sale of a broad range of ad solutions to sellers and advertisers, grew by 125%.
The sustained momentum in this revenue stream shows the appetite from both sellers and advertisers for a compelling offer of digital advertising that can reach a broad base of users while driving measurable performance.
While the first few years of Jumia, we were mostly a commission business from the monetization standpoint. This was the time of sellers who were new to our platform and e-commerce in general. We then introduced value-added services and started monetizing them. And we are currently focused on marketing and advertising services.
For us, this is a highly attractive revenue stream as there are almost no variable cost associated with these services. So, it’s almost pure incremental margin. The development of this revenue stream can only happen at the right time in the learning curve of sellers, once they are sufficiently familiar with the platform and are used to its functionalities.
We now feel this is the case and are ready to put more attention behind this initiative. For a better understanding of this revenue stream, let’s please go to Page 17. Jumia Advertising is set up as an in-house advertising agency with dedicated marketing and advertising professionals.
The target clients for Jumia advertising are brand advertisers and sellers, advertising agencies, and other providers of relevant services and products through our ecosystem participants. Leveraging our unique data and multiple touch points with consumers, we offer advertisers a comprehensive suite of ad solutions including sponsored ads or sponsored display banners. We also offer sponsored brands, which are ads in the slider format featuring the brand logo alongside of customized headline and the selection of product.
CRM tools are also leverage through the monetization of placement in the newsletter and notifications to app users. And last but not least, the stores within Jumia Mall are revenue of choice for marketing and advertising purposes as brands have the option to select different visibility and advertising packages. The solutions offer compelling benefits to advertisers including the ability to target their audience in a very granular manner, leveraging the consumer and purchasing data we have.
We are also able to engage consumer at different stages of their journey; prior to the visit of the Jumia platform via our CRM tools, or when they are browsing the platform with a purchase intent, and even when they receive their package as we also have the ability to include samples in the packages addressed to consumer having purchased specific products. Lastly, we offer advertisers measurable results; they can track through specific campaign reporting tools.
Jumia Advertising is a very good illustration of all we think about monetization and all we can leverage on data and usage. It is a compensation for service that enhances the performance of our sellers, helping them engage with the online users in a more effective way to ultimately improve their business online and offline.
on the monetization front, the take-up of marketing and advertising is very encouraging.
Continue to monetize the usage of Jumia with two priorities in mind. One is to drive it gradually because as a marketplace, it’s very important to keep a good balance between the growth you give to the sellers and how much revenue you extract. And two, to focus on services that enhance the performance of our ecosystem participants; like Marketing and Advertising, which is a key priority for us at the moment, or Logistics.
Read the earning call transcript: https://seekingalpha.com/article/4305818-jumia-technologies-ag-jmia-q3-2019-results-earnings-call-transcript?part=single
Ask for a Mabaya demo to learn about the Sponsored Product Ads Platform.