Companies cut back on advertising cash

By Eronie Kamukama

Kampala. Less money was spent on advertising this year than in 2017, a new report has revealed.
Advertising spend in Uganda surged 14 per cent after reaching Shs309b for the first half of 2018 down from Shs360b in the same period last year.

According to a report on media consumption and usage habits compiled by Ipsos, radio stations were the most affected after advertising dropped by 19 per cent.
However, they took the lion’s share accounting for 57 per cent of the money spent in the period under review.

“Donor fund reduction affected general spending on advertising especially in radio,” the report reads, radio is still in control of Uganda’s ad spends due to its fragmentation and huge discounts.”
Ms Nada Andersen, the Uganda Advertising Association, chairperson, yesterday said told Daily Monitor, that the harsh economic environment had forced companies to cut back on advertising expenditure.

“No matter the kind of business you are in, you either are not making enough money or you are comfortable [only making whatever can come your way],” she said.
Digital advertising, Ms Nada pointed out, had created a shift and is expected to grow as the country goes through the Internet revolution.

The report highlighted a slight rise in television audience, driven by the recently concluded World Cup in Russia.
Advertising expenditure in the television segment was less affected declining by 3 per cent.

Corporate companies, beverage and telecommunication firms are listed as the biggest spenders contributing Shs65.7b, Shs52.1b and Shs43.9b in the period, respectively.
Ms Andersen said advertising agencies have been the most affected as clients continue to cut back bookings and managing their budgets.

“Budgets are smaller and some [companies have created] in-house creative departments who can design adverts,” she said.
However, the report predicts that advertising spend will grow in the last half of the year as new products including soft drinks hit the market.

Tough half year
According to Ms Andersen Nada, the Uganda Advertising Association, it has been a tough half year and the rest of the year could remain gloom as less activity is happening among advertisers such as telecoms and banks.
“Uganda doesn’t have seasonal advertising like in the Europe when by October, shops are coloured with Christmas messages. This causes consumers to buy only what they know.”
To remain relevant, advertising agencies have to innovate more than ever now and provide a range of products, she believes.
“They have to look at costs and probably start outsourcing their work or have a standby team that is paid per project,” she said.

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