Advertising industry: How the internet is devouring Kenya’s ad revenue
NAIROBI, Kenya- In Kenya, the rapid gain of internet advertising will mean that by 2026 this segment will be only $1.2 million behind traditional television and home video, paving the way for internet advertising to take control of the sector.
An advertisement asking those interested to “join a corruption cartel” appeared in the Daily Nation, November 25, 2016
Digital advertising is the new frontier for the media and entertainment industry as companies cut budgets, track audiences online and learn lessons from Covid-19.
PricewaterhouseCoopers (PwC) Entertainment and Media (E&M) industry report shows segment to account for 79.7% of total industry revenue by 2026 in Kenya, Nigeria and Africa from South.
“The pandemic has accelerated the adoption of e-commerce, ad spend followed by 2026, Internet advertising will become the second largest segment in major African economies,” the report released on Wednesday said.
In Kenya, the rapid gain of internet advertising will mean that by 2026 this segment will be only $1.2 million behind traditional television and home video, paving the way for internet advertising to take control of the sector.
This growth is also attributed to high internet connectivity in all three regions, led by South Africa. The Southern African economic giant had internet penetration of 78.6% in March and is aiming for 90% by 2026.
According to the Nigerian Communications Commission (NCC), broadband penetration in the country in June stood at 44.30% with over eighty-four million internet subscriptions in the country.
There were 23.35 million internet users in Kenya in January 2022. This brings internet penetration in the country to 42% in May this year.
Overall, the report shows that Kenya’s entertainment and media industries have seen continuous growth since 2017, with revenues reaching new highs in 2021 (annual growth rate of 12.6%).
According to the report, industries that were hardest hit in 2020, such as cinema, live music and B2B trade shows, made a strong comeback, although revenues remained below pre-pandemic levels.
Segments such as video games and OTT video (streaming TV) have reached new heights after thriving under lockdown conditions, while other sectors have proven to be great “pandemic resilient”, with podcast advertising, albeit on a low base, showing resilient revenue growth of 12.6% in Kenya.
Alinah Motaung, PwC Africa Entertainment and Head of Media, says what is clear from PwC’s latest outlook is that the pandemic has accelerated changes in consumer behavior and digital adoption in ways that will affect businesses. future growth trajectories.
“Some of the sectors that have seen immense gains during Covid-19 may not be able to sustain this growth, while others are expected to continue to grow from their higher bases.
He adds that some once-niche sectors, such as gaming, will find their way to the forefront, while other once-dominant sectors such as traditional television, newspapers and mainstream magazines are likely to see their positions erode.
Analysts expect future E&M growth to manifest in the development of the metaverse and the use of non-fungible tokens (NFTs).
For example, Meta said the Metaverse could bring about $40 billion to the economies of sub-Saharan markets like Nigeria and Kenya.
”The overall growth trajectory is both clear and solid. The vast E&M complex is growing faster than the global economy as a whole,” the report states in part.
Indeed, more and more people are devoting more time, attention and money to the complex and increasingly immersive E&M experiences available to them.