Facebook, Google, Twitter: these are all free social media platforms that use an advertising revenue model. Social media advertising is big business, Facebook’s total ad revenue in 2019 was over $70 billion. That’s a global average of $29.25 per monthly active user (MAU). For North American the MAU revenue was $139.25. Advertisers use social media platform advertising because it works – they are able to deliver highly targeted ads to potential customers. Facebook and other social media platforms rely on the fact that their users own a device, a laptop or smartphone, to access the platforms. But what if their users didn’t own devices? Would it be worthwhile for Facebook to put devices in the hands of users to reach them with advertising?
Amazon has already made the bet that advertising has enough value to subsidize the cost of devices, offering the Amazon Kindle at deep discounts if users accept advertising on their lockscreen. Lockscreen ad revenue like what is offered on the Kindle is a growing trend. Apps like S’Mores Lockscreens will pay you to allow and interact with lockscreen ads. S’Mores Lockscreens pays on average $36.50 per annum to users that enable lockscreen ads. Could that income be used to offset the cost of the phone? At KEIPhone we believe that lockscreen advertising revenue can be used to offset the costs of phones, enabling us to provide them free to end users that are willing to accept lockscreen ads.
Lockscreen ads have a bad reputation, customers who pay hundreds of dollars for high-end phones are rightfully annoyed when lockscreen ads pop-up. Huawei faced a global backlash when they accidentally added ads to their rotating lockscreen wallpaper. But these are situations where users weren’t expecting the ads. If receiving ads is part of the deal and users know upfront about the ads we believe they will understand and appreciate the benefits.
In developing markets, customers are more willing to engage with ads in return for incentive payments. There are already models using advertising to give free access to internet, including Zero D Platform in Sub-Saharan Africa which had over 300 million users by March 2021 and expects to reach 400 million by the end of the year now that they’ve entered Nigeria. Zero-D is an ad-funded free mobile internet portal, and has been deployed across eight emerging markets, including Brazil, South Africa, Indonesia, Ghana and Kenya. Similar apps like Gigato and Earn Talktime in India allow users to earn data through the apps. These services prove that advertising revenue can finance the cost of using smartphones, but they don’t put devices in peoples hands. KEIPhone takes the process one step further and uses advertising revenue to cover the cost of the devise.
The KEIPhone business model allows us to sell advertising to both commercial businesses and development agencies which will appear on the lockscreen of our smartphones when the phone is first opened. We believe that through advertising we can generate enough revenue to cover the cost of the phone, a solar charger, distribution, and on-going data incentives to women.
This raises the question, is there enough direct targeted advertising revenue in the African markets to cover the cost of the phones. While Facebook may earn $139 per MAU in North America, it earns a fraction of that in emerging markets. But African markets are showing promising trends. With the growing digitization of Africa, traditional media advertising is being replaced by digital advertising, and that is likely to continue. With the number of internet users growing significantly every year, we can only expect to see an increase in digital advertising spending and revenue in the coming years. Globally, over the past 10 years advertisers have spent 44% more each year on Facebook ads. Increasing the number of people with digital devices like smartphones will only increase that growth. KEIphone is well positioned to take advantage of the growth in digital advertising and to help accelerate it.