East Africa's Branding Boom: The Intense Rivalry between Telecoms Providers in East Africa Is Driving the Advertising Industry to New Heights. Mark J Sorbara Reports

By Sorbara, Mark J. | African Business, October 2007 | Go to article overview

East Africa's Branding Boom: The Intense Rivalry between Telecoms Providers in East Africa Is Driving the Advertising Industry to New Heights. Mark J Sorbara Reports


Sorbara, Mark J., African Business


Most African sectors and industries are reaping the benefits of an unprecedented international demand for natural resources, but in East Africa the advertising sector is riding the coat-tails of a buoyant telecoms sector.

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Thanks to the growth in telecoms, the much overlooked advertising sector has been able to move beyond the ubiquitous Coca-Cola billboards to creating strong multi-medium brand-power representation across a wide range of sectors in East Africa. According to George Waititu, managing director of the Steadman Group Ltd., an integrated market information company; the East African advertising sector was valued at Ksh20,388bn in 2006 and represents a 34% increase over the 2005 total of Ksh15,179bn and almost a 100% increase since 2003's total of Ksh11,280bn.

Radio was the first mainstream outlet for broad based advertising in Africa and as Chris Harrison, chairman of Young & Rubicam Brands Africa suggests, "the medium built the first brands in Africa". His company is represented in 13 African markets, employs 120 people, and has retained clients such as Air Tanzania, Diageo, Co-operative Bank of Kenya, Del Monte, SAB Miller and Colgate Palmolive.

In 2006, radio presented 47% and 50% of advertising expenditure in Kenya and Tanzania respectively and TV and print expenditure made up the rest with little percentage change over the past few years throughout East Africa.

Nandkishor Buty, the managing director of Scangroup, an umbrella firm representing various international advertising agencies, which employees over 300 people and hold accounts such as Coca-Cola, Vodacom, Uganda Breweries, Toyota, Standard Chartered, Kenya Airways and Emirates, suggests that although Radio is still the lead medium in East Africa, outdoor advertising "in the region is extremely professional and in fact better than some first world markets" and "contributes 50% of all advertising sales".

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Telecoms operators dominate

Whether on radio, in newspapers, on billboards or on TV, telecom operators are the dominant players in terms of advertising expenditures. In Kenya, Safaricom and Celtel spent the most on advertising in 2006 with expenditures of Ksh801.8m and Ksh796.2m, respectively, according to the Steadman Group.

In Tanzania the two biggest advertisers were also in the telecom sector, with Celtel and Vodacom spending over Tsh5.6bn and over Tsh3.9bn respectively. The same trend can be seen in Uganda as well, with Celtel and MTN Uganda leading in spending with ad expenditures of over Ush8.7bn and over Ush6.1bn respectively.

Due to the massive injection of advertising dollars from the telecoms sector, Young & Rubicam Brands Africa has been able to double its business over the past three years. …

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