Timeous data retrieval on advertising expenditure in Africa is no easy feat. While figures are typically only made available 9 – 12 months following the end of a fiscal year and even then, they may only be available to a select few countries. Advertising expenditure is reflective of a country’s overall economic wellbeing and thus worth exploring.
In this article, we will be discussing 2021’s advertising expense stats for Kenya. By digging into the signs and signals, we may get a glimpse into the future of what advertising expenditure will look like this year.
Current Ad Stats
Stats provided by the African Development Bank in their 2021 African Economic Outlook study predicted a 3.4% growth in real GDP within the continent. Last year, our economy saw definite improvements from the 2020s 2.1% contraction. Most, if not all, African countries are still recovering from the economic damage brought along by the pandemic.
According to the first half-year (H1) figures provided by the International School of Advertising and ReelAnalytics, the advertising expenditure of Kenya grew by some 15%. This is a stunning improvement from H1 in 2020 but still 4.4% lower than H2 in 2020. It is important to note however that H2 is typically where we see a boost in advertising expenditure across the globe. Advertising expenses have been increasing across Africa as the continent begins to recover from the biggest recession it has experienced in over 50 years.
Let’s break down the advertising expenditure in Kenya across all types of media:
- Print: KS700 000 000 (R95 766 436)
- Out of Home: KS1 700 000 000 (R232 575 631)
- Radio: KS23 000 000 000 (R3 146 611 480)
- TV: KS35 100 000 000 (R4 802 002 737)
- In total: KS60 500 000 000 (R8 276 956 285)
Decreases and Increases Create a Balance
Even though TV still reigns supreme in terms of overall expenditure, expenses were decreased by 9%. Radio has also seen a drop of 4%. Taking advantage of the recently increased foot traffic following the revocation of lockdown restrictions, advertising expenses for Print and Out of Home increased by 9% and 25% respectively.
The list of the top 5 spenders among Kenyan TV stations is as follows:
- Citizen TV – 15.2%
- KTN Home – 13.8%
- NTV – 12.1%
- Kameme TV – 8.9%
- K24 – 7.8%
The fact that these top 5 TV stations account for only 50% of all advertising expenditure in this realm of media can be seen as an indicator of market fragmentation. The vernacular TV station Inooro TV also saw its place among the top 5 taken as the network decreases its ad spend.
The sector with the biggest advertising spend was communications and betting in Kenya, with numbers dropping by 14% in H1 of 2021. This is said to be a matter of indecisiveness within the mobile market.
In terms of digital expenditure, an increase of 20.4% from the numbers in 2020 was anticipated. The increase is expected to ruffle the feathers of the TV sector given that it is currently responsible for most of Kenya’s advertising expenditure. This sector’s ad spend is yet to be integrated into the overall figures, however. Kenya’s Media Council released 2020 survey analyses stating that 10% of the country’s population uses social media for their news consumption while a staggering 47% still rely on TV.
The full-year figures released by Nielsen Holdings in South Africa show that Kenya’s ad spend has indeed bounced back by as much as 29% from figures at the end of 2020, the total being R47 000 000 000.
As digital spending continues to increase, we see a lot of pressure now being put on the ad spending on TV. Both Print and Out of Home, it appears, are under the most pressure to keep up in this regard.
Not all Good News
From the outside, this may all seem well and good as signs appear to be pointing towards reinvigorated growth between 2021 and 2022. But it is not all sunshine and rainbows. Global economic afflictions will be causing domino effects that will adversely influence the economies of Sub-Saharan Africa. The prevailing lockdowns in major Chinese cities will, for example, slow down mineral trading. Additionally, the ongoing war in Ukraine is still driving oil prices through the roof.
Another issue is the fact that these stats do not include factors like the discounts made by media owners to take home their cuts. Given the amount of fragmentation in the Kenyan advertising market, discounts can be expected to be on the higher end. The same goes for many other Sub-Saharan countries.
In conclusion, we should expect advertising expenditure growth to prevail in 2022. But for Print and digital news, there may be tough times ahead over the horizon.
