Media houses are facing a bumpy road ahead as the government will from July stop placing its advertisements in the newspapers due to what it terms lack of value for money due to dwindling circulation figures.
‘My Gov,’ the weekly government publication that has for the last eight years been running as an insert in the four leading newspapers is going to be killed, a move that will deal a heavy blow to an already fragile industry.
All government departments have since 2017 been placing their advertisements through the Government Advertising Agency (GAA) which then runs them in ‘MyGov’ for onward distribution in the mainstream newspapers.
GAA has never been popular among media owners who have consistently argued that the centralisation of government advertising by retired President Uhuru Kenyatta’s administration was “the single biggest threat to editorial independence and sustainability of the media.”
In its defence, the Kenyatta administration argued that the centralisation of government advertising had enabled it to save Sh6 billion by reducing ad spending from Sh8 billion annually to Sh2 billion.
Now that Sh2 billion a year that the mainstream newspapers have been getting is set to be withdrawn altogether. Instead, ‘My Gov’ will be distributed through Posta and through digital platforms.
When making submissions on the budget for the 2023/24 financial year, National Assembly Information, Communication and Innovation Committee told the Budget and Appropriations Committee (BAC) that distribution through Posta would enable government agencies to monitor and evaluate the impact of their adverts.
“The State Department for Broadcasting and Telecommunications is in the process of reviewing the distribution of MyGov from the current model of using daily newspapers to using Postal Corporation of Kenya in the distribution,” said the Budget and Appropriations Committee, reporting on the submissions by the Committee on ICT and Innovation in a report to Parliament on the budget for the next financial year.
“This is aimed at streamlining the modality to enhance value for money in government advertisements. This shall also serve to institute a monitoring and evaluation framework since in the current existing advertising strategy, it is difficult to establish the distribution and delivery of the issued advertisements.”
The media industry is already facing a possible Sh2 billion loss if a proposed 15 percent excise duty on fees charged for the advertisement of betting, gaming, and alcohol-related activities is maintained for the second consecutive year.
Taking away another Sh2 billion on top of the 15 percent excise duty fees charged on betting, gaming and alcohol advertisements, will push an already fragile industry almost to its knees.
Like elsewhere in the world, Kenyan media have been laying off workers in a bid to cut costs as circulation and advertising revenues dwindle. Digital media has been partly to blame for this. But because making money from digital is extremely hard, media companies have for long focused on the easier money – print.
Unfortunatelly, Kenya’s mainstream media remain financially exposed due to their increasingly fragile business model. The reliance on advertising revenue and benevolence from wealthy owners subjects most local media to significant structural and operational constraints and weaknesses.
Governments and big business – often closely linked to the state – remain some of the biggest advertisers in the media market. For this reason they are a powerful influence in determining the news agenda directly, through proxies, or through advertising.
Kenya Kwanza has never hidden its disdain for the media which it accuses of being one sided. Infact one of the first things the government did when it came to power was to slash 75 percent of the annual advertising budget.
Withdrawing any further state and regional government advertising from mainstream media, as Kenya Kwanza appears intent on doing, will therefore hit it hard.
