Stunted growth for Kenyan Ad-spending market

By Steve UMIDHA

Fall Ad spending crept back as overall spending experienced a 14% decline in three months to September 2023, compared to the same period a year before due to low consumer purchasing power, anti-government protests and skyrocketing commodity prices.

According to the Communications Authority of Kenya (CA), overall industry expenditure stood at Kes 16 billion during that period with a chunk of that billed to TV advertising.

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To put that into context, total advertising spends stood at Kes 5Billion in July, 5.3Billion in August and 5.7Billion in September last year, compared to the same period 2022 – meaning the quarterly ad spend reduced by 19%.

Overall, CA noted that media spending had decreased due to government budget cuts, with brands currently prioritizing market retention by implementing targeted exposure strategies with minimal spending.

Indeed, brands with a wider product portfolio opt for a range of product campaigns and intermittent exposure. “The expenditure on a combination of TV, radio and print declined by 15% in July and increased by 5% and 8% respectively in August and September 2023,” reads in part the report.

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Digital content, the Africa climate summit, CSR activities, fintech, and real estate media activities accounted for a significant portion of TV media buying.

“Roughly 50% of the participants reported daily engagement with both radio and television. Social media usage was a daily habit for nearly half of the respondents. In contrast, more than two-thirds of the surveyed individuals admitted to not reading newspapers,” it noted.

Globally, still recovering from the disruptions caused by the pandemic, the ad world started 2023 facing threats associated with mixed economic signals. In the face of surging inflation and higher interest rates, consumers have adjusted spending. Consequently, brands and advertisers felt the pressure to review media budgets.

Growth in global ad spending is actually poised to slow this year to about 5.3%, excluding U.S. political advertising, according to a new forecast from media investment group GroupM – a deceleration from the 5.8% increase in 2023, according to GroupM.

GroupM, part of advertising holding giant WPP, forecasts that growth might be adversely affected this year by potential factors such as high interest rates’ effect on consumer and business spending.

The Kenya Media Landscape Report by CA, examines the media landscape in Kenya, covering the supply and demand of TV, radio and online media. In recognition that advertising drives the commercial nature of media, the report provides an overview of advertising expenditure.