Categories: Interactive Advertising
Will Kenyan brands benefit from digital migration?
I recently watched a recording of the first ever televised presidential debate in the 1960 elections between Senator John Kennedy and Vice President Richard Nixon, and I was amazed at how that type of television content has become a defining moment in how Americans decide on their leaders at every general election. It also become clear to me that presidential candidates that embraced and used communication technology in innovative ways got elected, and the 3 examples that I can think of are President Kennedy with television, President Carter with the telephone and President Obama with social media.
Back home we saw tremendous changes in our political landscape following the liberation of the airwaves in 1992, which also happened to be the period of my awakening into the media. Some say that the topple of the ruling party in 2004 was possible because of the rise of independent media and especially FM radio stations around the country. But more importantly the increase in the number of radio and TV stations in the country offered an opportunity to advertisers to reach consumers more effectively and more efficiently. Audiences were pleased at the diversification of content and growing number of genres that were not previously broadcast on terrestrial TV & radio. Both the tax man and investors benefited from the incredible growth rates that the industry saw over 2 decades with some years seeing over 40% per annum growth rates in advertising spend.
We have recently been the unfortunate witnesses to a bruising fight between the regulators and a association of media houses around the subject of the digital migration of TV. This episode could have been avoided if the process began with a consultative approach between all the stakeholders, as numerous examples of the same initiative have shown in countries around the world. Don’t get me wrong, I am not underestimating the sensitivity of this issue as I am aware that the local media industry commands up to a billion dollars in gross advertising expenditure, which is about 2% of our GDP. Any unnecessary changes to the modus operandi of the industry could have serious repercussions within the stakeholders, and that is why it was necessary work very hard on the stakeholder management, which wasn’t done. You’d rather spend more resources on the right things at the beginning rather than on the wrong things at the end, which is what happened.
That not withstanding the ship has sailed and digital migration of TV touches the various stakeholders in different ways and here I would like to focus on what it means to brands. The media companies will now focus on developing content rather than a combination of content development and content distribution as it was in the past. This means that, as we saw in the mid nineties to the early 21st century, we will see diversification of content, both local and international. There are a few genres that will rise in Kenya and those are local sports coverage, Kenya music and entertainment shows, comedy, and romantic and dramatic local soap operas that air everyday.
The increase in content generation for TV is a boom for TV programme producers especially those who are able to deliver exclusive content that touches the hearts and minds of many, and it will also benefit those who are able attract niche markets that are very attractive to brands, such as the elite audiences and middle income mothers. What it means for brands is that they are able to target audiences with laser focus, and pay a commensurate amount for those audiences. The beauty of it though, is that they can reach a truly engaged audience, especially at the beginning of this new phase in history.
Under the new system the content developers send their programmes to the content distributors, who then deliver it to the audiences around the country and from what we hear, there is the ability to delivery unique content from one media house to each base station. This means that localized content is now possible, and by the fact that’s the media houses can now focus on content, we may very well see localized news segments to start with and at later stages completely localized news bulletins for each region in the country. This is the same with advertising placements, which can be delivered as per the region. Breaking down advertising distribution in this way makes it cheaper to reach audiences in specific regions for the smaller companies, but increases the investment for brands that wish to reach national audiences. The best part about this is that the return on investment would be greater and more accurately measured for the national audiences and the advertising reach plans that can be tailored according to a companies marketing objectives.
The Kenya Audience Research Foundation (KARF) has embarked on improving the media research in the country based mainly on the fact that the TV digital migration requires better measurement which can only be done with new technology. Historically we know that that better media measurement leads to more advertising spend because brands have evidence of the media effectiveness. That is why even though Nigeria’s economy is 6 times larger than Kenya’s their advertising spend is only 30% more. This is because the industry in Kenya was able to agree on media measurement earlier than the Nigerian counterpart, which has led to a standard media currency that builds industry confidence.
Improved measurement leads to increased investment in adversing and the ad agencies are talking about moving to programmatic advertising which improves the optimization of media spend, mainly based on automation of audience targeting through complicated algorithms that calculate budgets, audience reach goals, segmentation and rating points objectives. Programmatic media purchase for TV requires additional software investment from both the media and the ad agencies as we develop a integrated system for media trading which is likely to be tailor made to suite local needs and nuances.
Overall the digital migration of TV has the potential to be the catalyst to take the local entertainment industry to the next level in terms on increased investment, talent development, content creation, ROI measurement and satisfying audiences above all.