COVID-19 impact on advertising spends in Kenya

Marketing and media intelligence firm Reelanalytics has released data showing advertising expenditure on mainstream media rose by Sh1 Billion in rate card value over the first five months of the year buoyed by a rise in joint advertisement campaigns between the government and the private sector.

Between January and May, government and private sector players spent Sh 52 billion to buy advertisement space on radio, television and print media compared to Sh 51 billion a similar period in 2019.

“The social industry which has over the years been a subtle industry sprung up to be among the most advanced industries from March to May highly influenced by the shift in advertising strategy as the government and the private sector joined hands to educate the masses to help curb the spread of COVID-19,” said Reelanalytics Senior Researcher, Enock Mokaya.

Corona Virus Awareness, Safaricom Skiza Tunes,Viusasa, GoK Kazi Kwanza and KCB and MOH Komesha Corona were this year’s top five campaign spenders respectively. Safaricom has consistently remained among the top spenders in the three years highly buoyed by its diverse campaigns. The company maintained the top slot spending Sh 6.7 Billion in the first half of 2020.

Royal Media Services was second with a spend of Sh 3.3 Billion followed by the Standard Group and KCB both at 1.9B while Betting firm, Lotto was fifth with a spend of Sh 1.7 Billion.

Between April and May 2020, the Ministry of Health emerged the top spender accounting for Sh 1.9 billion pushing exposure of messaging around COVID-19 related publicity.

Most of the billions in advertising went to television stations that recorded Sh 31 billion worth of advertisement between January and May 2020 compared to Sh 24 Billion in 2019.

At 15 per cent, the media industry emerged as the top advertisement spenders in 2020. Communication industry followed closely at 14 per cent.

Finance and betting firms came third and fourth respectively at 13 per cent and 11 per cent respectively while firms in household and personal care segments accounted for a combined 9 per cent share.

Beverage industry, Agriculture and state bodies tied at 4 per cent.

However, advertising spending by corporates tanked by Sh 9.12 Billion between April and May 2020, translating to a 77.34 per cent drop.

Brands in manufacturing and hospitality industries were the hardest hit recording little to no advertising activity over five-month review period.

“Other companies have had to revise their brand awareness messaging in order to be sensitive and relevant at a time when at least 90 per cent of media publicity is on COVID-19 pandemic,” said Mr Mokaya.

There was a general fall in advertising expenditure from communication, finance, media, betting and gambling as well as industry players in Fast Moving Consumer Goods.

“Looking at the three-year period, betting and gambling has posted significant drop in ad spends highly influenced by a drop in some of the major players in the second half of 2019” Mokaya added.

Betting and gambling that accounted for 24 per cent and 25 per cent of overall advertising revenues between Jan and May of 2018 and 2019 respectively only accounted for 11 per cent of estimated revenue in the first five months of 2020.

The stay at home directive had a direct impact on the Out of Home (OOH) platform that posted over 50 per cent drop in activity in April 2020 compared to March 2020.
Beverage industry topped the list as the most exposed on billboards and other outdoor advertising platforms highly buoyed by the diverse campaigns by EABL and Coca-Cola.

Among the outdoor advertising firms, Magnate Ventures has the highest number of OOH sites with a network distribution across the country and offering a wide array of Ad types.

Radio continues to be the most preferred platform where Kenyans seek information. Despite the lowered ad spending during this period, advertisers targeting different audiences have capitalized on the relative affordability of radio platform to churn out messaging.

TV on the other hand, has attracted fewer ad volumes but command the highest figures due to the cost of rate cards. Campaign exposure on print is the lowest.

“Due to the state of the economy, ad spends for the better part of Q3 and partly Q4 2020 will sustain with the low expenditure streak. Advertisers will only place their money on extremely unavoidable circumstances. Normalcy that will see a relatively increased spending by advertisers is expected to pick up towards the end of Q2 in 2021,” Mokaya said.

The ad scene is expected to hit an excess of Sh140 Billion in rate card value in 2020