Graduate School of Media and Communications
Technology has led to a paradigm shift for industries and consumers alike, altering the way that businesses operate. Traditional media business models have thus been rendered less competitive by the emergence of the digital platforms that are targetcasting and delivering content to niche audience segments. The competition for audience from these emergent digital platforms has not only occasioned a decline in revenues for the legacy media but also audience fragmentation. The biggest puzzle for media executives today is the bulging youth population that is characterised by unique and fluid consumption and lifestyle characteristics. Digital-native content producers have leveraged these unique and fluid consumption behaviours of the millennials and Generation Z (Gen Zs) to stake a claim in advertising. They have done this by targeting the young demographic with targetcast content that is cheap to produce but of interest to niche audiences, which are then clipped away from legacy media. Targetcast content and the audiences it attracts appeal to advertisers because of the ability to deliver a more predictable audience, with a higher percentage of likely product buyers. There are three key factors underlying the reason why this clipping off of young audiences is so financially devastating to legacy media in terms of advertising: 1) First and foremost, advertisers want to reach young audiences (18-34, most and 18-49 second best) because young people do not have established brand preferences and therefore are more susceptible than older people to advertising; 2) young people in those age groups are more desirable to advertisers because they spend a higher percentage of their income, than older people, on consumer goods, particularly if they have children in their households; and 3) because almost any audience clipped off by narrowcasting is a “higher quality” audience for most advertisers than a general legacy media audience. Because of this, advertising revenue has become so fragmented that as legacy media’s main source of revenue, it no longer guarantees viability. So even as media consumption in East Africa has increased and the advertising market expanded, audience fragmentation and proliferation of media outlets has considerably reduced the advertising dollars that go to media houses. Further, the industry continues to be constrained by considerable challenges, such as limited sources of commercial advertising and content monetisation as well as low disposable income among the target population. These factors exacerbate the scarcity of sustainable advertising revenues.
Owilla, Hesbon Hansen, Mogere, Clare and Booker, Nancy. (2023). "Media consumption in an evolving digital world: millennials and digital natives’ consumption habits and implications for legacy media in Kenya. The Media Futures Project." Aga Khan University - Media Innovation Centre
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