Growing local advertising spend great news for young media houses

Last year, firms across the globe spent an estimated $518.8 billion on advertising, with the US pocketing the lion’s share of the cash, China topped in the Asia-Pacific region, and Germany was the leader in Western Europe, according to Adage.com, a US ad tracking site. When compared to the Middle East and Africa to the other regions of the world, firms are spending far less on adverts, but these regions are considered the fastest-growing markets globally especially as they have growing population of young professionals and widening middle-class. Companies now have opportunity to reach out to large audiences than before, thanks to the increasing number of affordable smart phones (with options for radio or even TV) on the market. Despite the proliferation of TV and print media in Africa, radio still rules on all fronts - advertising spend, media consumption, and penetration. With the high penetration of smart phones, the dominance of radio in Africa is unstoppable, giving the medium huge potential to attract huge advertising revenue. Presently, the radio penetration rate in Africa is at about 90 per cent. In East Africa, Kenya took the lion’s share of the advertising spend, thanks to its regional positioning, competitive media industry and a stronger economy. The telecoms industry, consumer goods and beverage firms were the highest contributors to the $1 billion spent on advertising in the country. In Rwanda, corporate, financial services, communication, tourism and entertainment, respectively were the biggest spend during the first half of last year. However, it is projected that the beverage, publishing, education, and transport sectors will fall into the top 10 spenders in the country, which should be good news for media outlets. According to Ipsos Rwanda survey, the corporate firms spend close to Rwf2 billion, followed by the financial services sector, which parted with Rwf1.24 billion on advertisement, with the communication category coming third place after spending Rwf1.14 billion on ads during the period. These figures are based on advertising rate cards from the different monitored media houses. The actual figures may be different because of factors such as discounts and premium charged by the various media houses. Last year, there were also several budget cuts and increased rate cards by media houses that altered the advertising landscape, but this did not affect much the advertising spend generally because it was the World Cup year. Advertisers dug deep into their pockets and spend Rwf8.5 billion over the year, with the second quarter grossing Rwf2.3 billion, highest ad spent because this was the same period the 2014 World Cup was staged in Brazil. Full year results indicate that the corporate and multi-brand category were still the biggest spenders on ads, extending the lead from half year, the communications industry was second and third was financial services, switching positions recorded in half year analysis. The corporate multi-brand category includes government - ministries, parastatals - as well, as NGOs; the communication category includes mobile service providers, internet service providers and mobile phone dealers and manufacturers, while the financial services category covers banks, insurances and micro-finance. According to Ipsos Rwanda study, the commonly used medium is radio, which is highly favoured by most advertisers. The study focused on radio and print media. Ipsos has also recently released its audience measurement study, Rwanda Audience Measurement Survey (RAMS), which studied media consumption habits, trends and preferences across various media platforms - radio, TV, print, online and billboards. Ipsos launched its media monitoring services in Rwanda in August 2013 and is also involved in Media research, market research and social research. As the globally spend on online platforms continues to soar, thanks to the huge numbers of the people going online, media in Rwanda and Africa could strengthen their marketing energies to this somewhat new area to cash-in on revenues spent on these platforms. With the rapid improvement in infrastructure and increased penetration of the Internet facilities and smart phones, this should provide huge market potential for media houses to boost their revenues. In fact, mobile advertising is slowly taking shape in Rwanda and region generally. Compared to other regions, Africa and Rwanda in particular, has not taken advantage of this avenue previously to augment and diversify their revenue streams. For instance, the Asia-Pacific region previously commanded the largest share of online ad spend because Japan and South Korea have advanced mobile advertising markets. Their dominance is, however, poised to end soon as Western Europe and North America have had increased penetration of smart phones and tablets. The writer is the country representative Ipsos Rwanda Abraham.nganga@ipsos.com

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Growing local advertising spend great news for young media houses