Outdoor advertising: Kenya’s media sector is set to become a new frontier for investment as global giants cash in on increased demand for services. Photo/FREDRICK ONYANGO
Kenya’s media sector is set to become a new frontier for investment as global giants move to cash in on increased demand for specialised services.
Over the last year, global communications firms have upped interest and investment levels in the African market, which is viewed as having higher growth potential than traditional markets such as the US and Europe due to its relative stability.
“Kenya’s rising profile as a commercial hub is attracting more multinationals and companies who require specialised communication solutions. We intend to take advantage of that need to increase our presence,” said Jack Leslie, Chairman of Weber Shandwick, a US-based public relations firm that is part of the Interpublic Group (IPG).
Kenya’s media landscape is currently undergoing the most radical shifts in its history.
As media channels continue to fragment and cover a wider range of products, companies are faced with an increasingly complex consumer environment that has stimulated demand for specialised communication skills.
The increased need for services by companies keen to communicate with their consumers has led to a growing number of investors in the field.
In total, over seven deals have been completed over the last years as agencies move to remain relevant in the changing media landscape.
The largest of the deals involved two of the biggest players in the space —Ogilvy & Mather and Scangroup —who announced last year that they were consolidating their operations on a regional basis, in the process creating one of Africa’s largest media group.
At the time, the move worried several small players in this market who feared that the merger would translate to reduced earnings as well as hand the two agencies an unfair competitive advantage.
But the deal has ignited growing interest by international communications agencies such as the WPP Group, IPG and Omnicom, who are increasingly turning to the African continent in search for new markets.
Facing the global economic crisis that dented earnings in the sector, a growing number of multinationals have intensified operations in markets where growth was unaffected or minimally affected by the crisis to cushion earnings.
In the process, international competitors such as WPP, IPG and Omnicom, who respectively are the forces behind companies such as Scangroup and ZK Advertising, have localised their global rivalry.
