by Fintechnews Africa
8 April 2024
In Nigeria, fintech companies are harnessing sophisticated digital marketing tools to drive growth, enhance brand visibility and build lasting relationships with customers in today’s digital-first world.
Recent findings from the Africa Fintech Summit reveal that in 2023, Nigerian fintech enterprises predominantly relied on paid advertising, programmatic advertising, and content marketing as primary channels for customer acquisition. This underscores the strategic emphasis placed by Nigerian fintech firms on digital marketing methodologies, recognizing their effectiveness in efficiently reaching expansive audiences with precision targeting.
Released on March 21, the Nigeria Fintech Marketing Outlook 2024 report provides a comprehensive view of the state of fintech marketing in Nigeria. It delves into the marketing strategies and growth initiatives adopted by industry players to fortify and expand their product offerings. Drawing upon interviews with fintech companies in Nigeria and online surveys to gather quantitative data, the report sheds light on key metrics, preferences, and prevailing trends in fintech marketing strategies.
According to the report, digital marketing emerged as the primary marketing strategy for Nigerian fintech companies in 2023. Paid advertising was the dominant channel in 2023 (33.3%), followed by programmatic advertising (19%) and content marketing (19%). These statistics underscore the rising prominence of digital marketing as a powerful tool for fintech companies to attract and retain customers, as well as drive business growth in the digital-first landscape.
Paid advertising involves paying for online ad placements on search engines results, social media feeds, websites or platforms such as YouTube. It aims to reach the target audience and prompt specific actions such as clients on the ad or making purchases. Paid advertising enables businesses to target ads to specific demographics and track ad performance effectively.
Programmatic advertising is another method for businesses to promote their products and services online. However, it defers from paid advertising in that programmatic advertising offers automation, advanced targeting options, and access to a broader range of ad inventory. Instead of manual negotiations and placements, programmatic advertising uses automated technology and algorithms to purchase ad space in real-time. This means that ads are bought and sold instantly, often in the milliseconds it takes for a webpage to load.
Lastly, content marketing adopts a strategic marketing approach focused on creating and distributing relevant and consistent content to attract and retain a target audience. Instead of directly promoting a product or service, content marketing aims to provide valuable information, entertainment, or education to potential customers, ultimately building trust, credibility, and brand loyalty.
Outlook for fintech marketing in Nigeria
Looking ahead, the report anticipates that persistent foreign exchange fluctuations may impact marketing campaigns, potentially raising customer acquisition costs. This will likely translate to increased reliance on owned media channels with organic avenues such as search engine optimization, content marketing and social media, expected to garner prominence for their cost efficiency and ability to yield sustainable engagement, the report says.
Nigerian fintech companies may also reduce their reliance on above-the-line advertising such as radio, billboards and TV to favor digital and targeted approaches and focus on strategies that drive return on investment (ROI).
Moreover, analyzing customer data will become increasingly crucial for fintech companies, enabling them to discern churn patterns and optimize retention strategies. Through segmentation and personalized interventions, startups will proactively mitigate attrition, maximizing customer lifetime value and sustainability.
The report expects economic headwinds and funding constraints to increase pressure on marketing budgets this year. This will lead fintech companies to take a more cautious and disciplined approach to their marketing expenses, and prioritize initiatives that produce clear results and which contribute to long-term profitability.
Finally, the report anticipates Nigerian fintech companies to accord high priority to user experiences across diverse mobile devices, aligning their evolving expectations of their clientele.
Nigeria boasts one of the highest mobile phone and Internet penetration rates in the world. In 2023, the country was home to more than 226 million active phone lines, with 156.9 million subscriptions to active Internet services, data from the Nigerian Communications Commission show. These metrics indicate a robust mobile penetration rate exceeding 94%.
Other fintech marketing trends
In Nigeria, fintech has emerged into the most prominent sector in the tech ecosystem, making up approximately 36% of all tech startups in the country, according to a German data platform Statista. These companies consistently attract the largest portion of startup funding, capturing nearly 40% of all transactions in 2023, data from a 2024 report by Disrupt Africa shows.
In this competitive landscape, companies in the fintech sector are required to make significant investments in marketing and customer acquisition efforts to gain market share and maintain growth.
The Africa Fintech Summit report highlights that across all fintech verticals studied, payments, wealth management, and digital lending are the categories with the highest customer acquisition costs. This can be attributed to intense competition in these segments and the need for consumer education.
On the other hand, verticals such as business financial management, savings, and investment record moderate customer acquisition costs. This could be due to their larger target audience or the less complex nature of their offerings.
Featured image credit: Edited from freepik