Internet Access and Advertising to Dominate the Entertainment and Media Sector in Sub-Saharan Africa’s Largest Markets

Revenue from digital advertising has been on the rise recently, with numbers expected to climb even higher in the coming years. Currently, Africa’s total annual advertising investment has exceeded US$10 billion, of which digital advertising accounts for 40% of that number, although this is far lower than Europe and the United States of America, where digital advertising accounts for 80% of all advertising investment. It is estimated that in 2025, Africa's Digital Advertising budget will account for more than 70%, and the digital advertising market will well exceed 10 billion U.S. dollars. 

The major reason for this development can be attributed to Africa’s increased internet access. The continent had around 570 million internet users in 2022 alone, a number that more than doubled when compared to the numbers in 2015. Nigeria, perhaps by measure of the sheer population, has the largest number of users in Africa, contributing over 100 million internet users in 2022. South Africa follows with 41 million internet users.  

Although advertising was one of the sectors most hit by the effects of the pandemic, it also experienced significant bounce-back in 2021. A further breakdown of PWC’s, Africa Entertainment & Media Outlook saw that of all the subsectors in Advertising, the Internet Advertising segment will see the largest gains in revenue across the five-year forecast period from 2022 to 2026.  

79.7% of South Africa’s Entertainment & Media (E&M) revenue gained from 2021 through to 2026 will come from Internet Advertising and Internet Access, as consumers and advertisers further prioritize digital advertising over physical media. South Africa’s E&M market post-Covid (2021) performed at a better level than pre-Covid levels (2019) with an industry spend of R163 million and R141 million respectively showing a 15.4% annual growth.  

Spending on Internet Access reached R81.09 million in 2021, rising from R61.19 million and R68.01 million in 2020, while the Internet Advertising was responsible for spending totaling R18 million in 2021, from 13.07 million and 14.60 million in 2020.  

Internet access is the largest E&M segment in South Africa, more than three times the size of the Traditional TV and home video segment, which takes the second spot. Over the next five years, PWC expect this hierarchy is set to change, as Internet Advertising expected to overtake traditional TV and home video spending by 2026. This is perhaps inevitable, as more customers across Africa are opting for streaming over traditional TV and video, as outlined by Mustard insights in an earlier article. 

In Nigeria, Internet Access is the largest segment in the Nigerian market and gains in this segment will account for 89.5% of total E&M revenue growth through to 2026. Nigeria’s E&M revenue is projected to reach $64 million by 2026, with Internet Access seeing the largest fraction of that at $52 million. Internet Advertising is also expected to generate $3.3 million through to 2026. However, Nigeria’s trends will parallel South Africa’s, "with Internet advertising expected to overtake traditional TV and home video by 2026”. 

In Kenya, rapid gains in Internet advertising will mean that by 2026, this segment will be just $1.2m behind Traditional TV and home video, paving the way for Internet advertising to overtake this segment in later years. Kenya has seen continued growth since 2017, with E&M revenue reaching new heights in 2021 with a 12.6% annual growth rate. Prior to this time E&M revenue in the country performed below the $2 million limit. Projected E&M revenue through to 2026 is estimated at $14million. Internet Access is estimated at $7.7 million, while Internet Advertising is estimated at $1.6 million. 

“Traditional TV and home video will maintain its position as the second-largest segment in Kenya’s E&M market over the forecast period, rapid gains in Internet advertising will mean that, by 2026, the former will be just US$1.2m larger than the latter, paving the way for Internet advertising to overtake this segment in later years. Despite these shifts, Internet access will remain the largest segment in Kenya’s E&M market across the forecast period”.