Media warms up to political cash

By Jackson Okoth

A leading presidential candidate in Kenya’s March 2013 polls is reportedly to have snapped up all available billboards of a major outdoor advertising company.

This strategy of holding on to all spaces, located on prime locations in Nairobi and other major urban centres, is creating a frenzy as other contenders rush for the remaining outdoor advert spaces.

Demand for outdoor advertising spaces is not only confined to presidential candidates. A candidate vying for the seat of Governor for Nairobi is also reported to have booked heavily on all spaces offered by yet another big player in the outdoor advertising business.

The emerging trend that is expected to heat up towards December and early 2013 will dramatically lift the country’s ads spend, especially outdoor advertising revenue currently estimated at Sh4 billion annually.

With six seats up for grabs in the 2013 polls, advertising spend by politicians is expected to rise through the roof as each candidate struggles to maintain visibility in this crowded field.

 Available figures indicate that in 2008, annual advertising spend was Sh20 billion rising to Sh 62.4 billion in 2011. According to data from Ipsos Synovate, in the first quarter of 2012, Sh 18.3 billion had been spent in advertising. In the same period last year (2011), the figure was Sh 12 billion. These figures are exclusive of online and outdoor advertising.

The Sh18 billion reflects the total value of the advertising booked without taking the discounts and value addition provided by the media houses.

 It would therefore include the agency commissions, which are not quoted separately from the advert price. Media houses quote a standard price for their ads and pay the agencies from this price.

In 2012, ad spent could hit the Sh 100 billion mark being an election year under a new constitution that offers more elective positions. According to ad spend trends; politics has the highest ad spend.

This is expected to peak three months prior to the election.  In the first quarter of 2012, the Independent Electoral and Boundaries Commission (IEBC) ran a civic education campaign that lasted six weeks and it was rated as part of the top five brands with the highest spend. Civic education is expected to be a key component of IEBC expenditure and especially so on media.

At the moment, the biggest beneficiary of the ad spend is radio. In the first quarter of 2012, Sh 8.1 billion was spent on radio advertising, four times higher than the amount spent on print media.  Experts credit the high spends on radio to the over 160 radio stations in Kenya.

Ratings

The closest competition to radio is television. The average television viewer watches up to three stations on a weekly basis and spends an average of 26 hours. In the first quarter or 2012, ad spend on television was Sh 7.8 billion compared to radio spend of Sh 8.1 billion.

In comparing ad spend in the first quarter of 2011 and 2012, radio ad spend has dropped by 6per cent in 2012. Television on the other hand gained 9percent while print advertising dropped by 4 per cent and only accounts for Sh 2.2 billion as at quarter one 2012. Of this, newspapers take 91 per cent and magazines take a partly 9 per cent of the spend.

Fundraising by the presidential candidates suggests they will have plenty of money to run ads at high volume during the 2013 poll. Already, several key Presidential candidates including Raila Odinga, Martha Karua among others have sought the public support to finance their campaigns. Others are said to have billions of shilling in bank accounts ready to spend.

Although local and international companies occupy most outdoor advertising spaces, political parties are quietly shopping for space in December 2012 to February 2013 when intense campaigns are expected to take place. These private firms are likely to be crowded out once the campaigns start.

Even though industry sources point to increased bookings by politicians, there are those outdoor advertising firms that deny the reports.

“We are yet to notice any huge orders from political parties especially on prime locations where demand is high such as Uhuru Highway,” said Lenny Nganga, MD Saracen Media.

Efforts to obtain details on advance bookings made by clients from various outdoor adverting firms were fruitless with most companies keeping this information under lock and key.

“There are clients already making advance bookings depending on their budgets. On average, it costs approximately Sh1,000 per square metre monthly, to place an advert on a bill board,” said Wilson Maina, operations manager, Think Outdoor Advertising.

Outdoor, or out-of-home, advertising is considered the oldest form of advertising, dating back to sales messages chiselled on stone tablets by Egyptian merchants who placed them along public roadways. The development of paper and the printing press made billposting possible in Europe after about 1500. Lithography, a printing method developed in the 19th century, expanded the creative possibilities of advertising design. Posting “bills” on wooden boards in the late 19th century led to the birth of the term “billboard.”

Today the out-of-home category includes not only the billboard, but also “car cards” in public transportation, in-store displays, and displays in airports, sports arenas and transit shelters among other sites.

Industry sources confirmed heavy bookings during the months of December 2012 and March 2013 when the campaign period is expected to officially commence.

Available figures place Magnet Venture as the leading outdoor advertising company in Kenya, controlling over 60 per cent of the entire market. Other top players in this business include Ad Site, Think Outdoor, Live Ad and Alliance Media.

Ad cost

“It costs between Sh1.5 to Sh2 million to put up a double sided billboard, measuring 10 by 12 meters. The presence of neon lights on bill boards and other lighting is usually an additional service given to clients, mostly found within Nairobi,” said Maina.

Location of outdoor adverting billboards is basically determined by human traffic. This is why nearly all outdoor advertising is placed along major highways, which incidentally also experience the worst traffic snarl-ups, such as Jogoo road, Ngong Road, Uhuru Highway and Mombasa road.

The list of some of the prime locations within Nairobi include Uhuru Highway next to Haile Selassie roundabout, Waiyaki Way and areas around Westlands, Mombasa Road, Ngong Road, Thika Road and lately areas in Karen,” said Maina.

Companies are falling over each other to catch the attention and wallet of consumers and outdoor advertising especially on major highways has been a strategy employed by many of these firms.

Top on the list of corporates occupying billboards include mobile phone operator Safaricom-considered the largest advertiser on this platform, soft drinks multinational Coca-Cola, alcohol maker firm Diageo, Nivea and Airtel among others.

Companies selling consumer products are, however, the biggest consumers of advertising and market services. But lately, technology, telecommunications, financial services and entertainment have increased their spends in outdoor ads.

“The main target sites are those with huge traffic such as Uhuru Highway, Thika road, Waiyaki Way and Jogoo road. For those companies selling high end products, their preferred sites are in Westlands area, Karen and Muthaiga,” said Nganga.

The price charged on a billboard depends on its size and location, with those inside the Nairobi Central Business District (CBD) and Uhuru Highway being the most expensive. “We have private companies that have already signed long-term contracts with the outdoor advertising companies and are therefore holding on to the sites here,” said Nganga.

Top of the league in the outdoor adverting business is Magnate Ventures, a company that came into prominence after leading outdoor advertising campaigns for President Mwai Kibaki and the Party of National Unity (PNU) in the run to 2007 polls.