OPINION: Why media must look beyond advertising

OPINION: Why media must look beyond advertising

In early April, global news agency Reuters announced what was perhaps expected widely years earlier- the world renowned news feed would be placing its content behind a pay wall.

This to join ranks with peers such as Bloomberg and the Wall Street Journal which had already established the walls on content, with the latter being the first for the industry.

The decision reported world over has re-opened the book on new innovations to achieve sustainability for a media industry quickly revolving under not only just technological and cultural changes but also under the cloud of Covid-19.

Back at home and on the continent, the diversification of revenue by media entities is becoming an increasing concern by the day as the industry, just like any other goes through its ups and downs.

The sustainability of the industry is not just a concern for media owners and journalist but also the wider public.

Described as the fourth estate, the role of the media in informing and entertaining the country cannot be understated even as newer communication platforms pop.

For Kenya and the world to be reliably informed, educated and entertained, the media must therefore remain in business while being profitable while at it.

Thinning ad revenues

Traditionally, media has relied on advertisement placements by firms and their respective agencies for earnings.

This dictating that the entity with the greater market share captures the bulk of earnings offered on the day.

The old model which has with respect worked over decades is nevertheless witnessing a new disruptive force.

Firstly, new technology-based mediums are rivalling traditional media in earnings. For instance, while it costs hundreds of thousands of shillings to buy limited airtime or space of television, radio and newspaper, a well composed social media campaign is costing barely a fraction of the former.

This means that business particularly start-ups and small and medium enterprises (SMEs) are more likely to go for the cost-effective medium to market their goods and services.

Today, even the sizable and most profound brands are ditching traditional media for the nascent channels.

Social media personalities, commonly regarded as influencers are now taking a pie from the media’s cake with even lower start-up and overhead costs as they sign on endorsement deals with companies just like media houses would.

The direct placement of advertisements on social media sites such as Facebook and Instagram is negating the need for running marketing campaigns on traditional media.

As millions of Kenyans make the transition to the online space, companies might as well significantly truncate advertising and marketing budgets with media houses.


Wrapped up around disruption and competition is the Covid-19 pandemic which continues to evolve by the day.

The adoption of restrictions to combat the spread of the global health crisis has had the knock on effect of slowing down economic growth and subsequently cutting off part of revenues from advertising and marketing.

With firms forced into cost conservation statistics, marketing budgets were the first to be cut and along followed jobs in agencies culminating in the reduction of advert placements.

According to a global report on the outlook of global entertainment and media, revenues by the industry contracted by 5.6 per cent last year as the 2.1 trillion dollar industry caved under the weight of the pandemic.

Categorically, advertising revenue tumbled by 13.4 per cent and in tandem with falling consumption.

Revenues from advertising are expected to struggle through the next few years and in particular placements in traditional media.
With the key revenues virtually slashed in half, while the other half its split with emerging players, this means media houses no longer have the surpluses to invest in rich content and meet routine costs such as wages and other operating expenses.

This means that media must therefore innovate to keep churning out quality content to consumers.


The uphill task to make media best respond to the changing environment will be premised largely on reconfiguring for digital.

As the world shifts to the digital eco-system, media houses must follow in the same footsteps by ensuring the availability of their content and products online.

In May last year for instance, Australian News Corporation owned by the renowned media mogul Rupert Murdoch turned the lights off in printing physical newspaper copies to full digitize its paper offering.

Secondly, media houses must endeavour to enrich experiences for consumers anchoring it in new technological advancements such as virtual reality (VR), augmented reality (AR) and mobile mixed reality (MR).

Beyond reconfiguring business models towards the digital end, entities must look at ways to monetize their new mediums to steady the much needed cash flows.

While unveiling their paywall, Reuters stated it would be targeting its content to professionals by offering deep level coverage and data.

As the rest of the industry looks towards monetizing new channels, the decision to price must be preceded by an analysis of audiences/target groups.

Moreover, media houses must lean towards diversifying into new business to grow their top lines and substitute reliance on pure subscriptions and ad cash.

Reuters has previously proved this fete is possible through Refinitiv, a financial data specialist firm, now a client of the news agency but which contributes to about 50 per cent of the media house revenue.

Locally, Kenya’s three main media houses have already made moves towards adjusting to the new normal.

Royal Media Services (RMS) has been a pioneer of video on demand with its Viusasa platform.

Nation Media Group (NMG) has for instance monetized part of its website carrying premium content with Standard Group monetizing its news website.

I have been seeing so many changes in the top media group since I started my career in the commercial operations 31 years ago, but fact is, digital marketing and digital business is what will transform super-fast more with artificial intelligence.

Internet of things among other technology platforms both profiling and making the customer feel special, pushing and pulling new segments and new business that private and public business that are slow on these tech-changes will see their brands and products slowly die off or lose heavy revenue due to lack of product and service new developments. Simply put, transform or die!

By Chris Diaz
Business Leader

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