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Companies cut spending on ads

BUSINESS
By Rawlings Otini | March 12th 2020

Advertising expenditure fell 19 per cent in January as companies cut spending following the end of the December festive season. 

A survey by Ipsos shows the spending on advertising dropped from Sh8.8 billion in December to Sh7.1 billion in January. 

Kenya Breweries and Coca-Cola made the biggest cuts in ad spend by 60 and 54 per cent respectively. 

“The third week of the month (January) had the highest spend driven by communications, betting and gaming, financial services, publishing and education and corporate and multibrand,” Ipsos said in a survey commissioned by one of its clients.

Biggest cuts by industry were observed in the office equipment and services sector, which had an 83 per cent drop, and foods sector by 76 per cent. The retail industry cut back its spending by 70 per cent, clothing fabric and footwear by 61 per cent and the beverage sector dropped by 60 per cent.

The cut in advertising budgets was in anticipation of reduced household and business spending after the festive season.

Safaricom was the biggest spender on advertising, pushing its budget up by 86 per cent to 1.2 billion in the period under review thanks to its Lipa Na M-Pesa promotions.

The Lipa na Mpesa campaign alone increased ad spending by 100 per cent in January.

In the banking sector, Equity Bank was the biggest spender on ads at Sh127 million, which represented a 43 per cent drop. Barclays followed at a distance with 15 per cent drop to Sh49 million in the period.

KCB spent Sh47 million while Co-operative Bank splashed Sh39 million on ads in January.

In insurance, the government, Britam and Gachicho Insurance Brokers were the biggest spenders.

 

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