Media investment group GroupM’s inaugural Africa Media Index study on the African media landscape has found that sub-Saharan advertising to GDP ratio is still very low at 0.15%, but there are immense opportunities for growth. This is due to an expanding middle class, urbanisation and mobile-first technology. The report also shows every medium is still growing in Africa: internet, TV, radio, out of home (OOH), plus print in some regions.
Sub-Saharan Africa (SSA) hosts 17% of the world population today but only represents 2% of world GDP, and even less when looking at advertising investment, which is US$2.6bn or 0.47% of global investments. However, due to mobile and internet expansion, strong urbanisation and a booming middle class, the next 30 years should tell a very different story.
The study aims to provide insights on trends and knowledge of the media sector and how it affects investment, governance, local business and economies. The index study comprises data from 14 African countries: Ivory Coast; Ghana; Nigeria; Kenya; South Africa; Uganda; Zambia; Namibia; Zimbabwe; Tanzania; Mozambique; Botswana; Angola and Ethiopia. It identifies trends that are relevant to industry investors looking to increase their footprint and reach multiple audiences in a meaningful way across Africa. The report focuses on five key categories: economy and business; media landscape; media consumers; technology; and governance and legislation.
While the African middle-class population is growing impressively, so is their access to technology and media consumption. This is demonstrated through the rising sales of televisions, which now replace radio as a preferred purchase option in places where electricity supply is increasingly available.
Access to the internet also accounts for a large growth in the media landscape; however, internet use is restricted by high data prices in various regions. More than 83% of respondents believes online media is growing significantly, while 75% thinks radio, through internet broadcasting, is on a high trajectory. However, the same respondents are also bullish on TV, with nearly 62% of positive growth. In addition, print media is experiencing positive growth, contrary to what is happening in the rest of the world. For example, in Kenya newspaper consumption has grown by 14% in 2018 vs the previous year and 12% in Nigeria according to ‘This Year Next Year’ report, by GroupM Global.
Of the surveyed respondents, 49% of East Africans and over 36% Southern Africans think media corruption is “highly prevalent”, while 41% of West Africans says the media is hopelessly corrupt. Corrupt state media, bribe-taking journalists and self-censorship by the independent press were cited as examples of corruption. As a result, the risk impact of changes in legislation and regulation has increased considerably as many African governments continue to implement laws governing information and ethical operations of businesses.
When investors seek media investment opportunities, a holistic knowledge of the investment environment is required, including the relevant forces at play in governance, local business and economies that affect the media sector. The sector is influenced by the society it services and, in turn, the media influences the societies that hear, read and see its output.
Investment indicators, as opposed to business confidence, for southern Africa are good overall. Leading in this is South Africa with an overall score of 65.97, which takes three of the top five positions in overall economy and business rankings. However Ghana (51.65) and Kenya (47.67), being in the top five, reflect a mixed regional picture. Meanwhile, at the lowest of the spectrum on the continent is Mozambique, whose overall score is 34.89.
Media access gap
One of the biggest challenges for African governments and media houses will be to close the media access gap between urban and rural areas. If this is left unattended, there is an increased risk of widening inequality between those who have access to a plethora of innovative and rich media options (TV and video in all forms: linear, VOD, SVOD, OTT and all online platforms) and those who aren’t exposed to it.
Electricity is a necessity for new media expansion for all regions, and West Africa is seen prioritising urbanisation more than others. Southern Africa is viewed as prioritising fibre lines, according to 17.66% of respondents, particularly with the South Atlantic Cable System arriving in the region. These respondents have, however, reported the highest data prices, with three-quarters classifying prices as expensive and 33% says data is somewhat expensive; 40% says it’s very expensive.
“The 21st century new-media wave has been driven by the African people as they are choosing preferred mediums and content,” says Federico de Nardis, GroupM SSA CEO . “Investors in Africa’s media industries can be assured that African media consumers are the same as media consumers in other markets ,who are perpetually craving better media services that are interactive and advertising that is created to each market’s unique nuances.”