Why Kenyan showbiz struggles to attract sponsorship millions

Kenyan entertainment has no shortage of talents or numerous loyal fans, but converting that into hard cash continues to be a tricky move. BONIFACE NYAGA looks at why showbiz is missing out on corporate sponsorship despite having the numbers.

It is an open secret that corporate sponsorship is the backbone of the showbiz industry. Without the names that appear at the bottom of the posters, concerts and showbiz content in general would be too expensive for the average man on the streets.

Though ticket sales, merchandise, and royalties are major revenue earners, corporate sponsorship is where the real money is. In the recent past, however, corporates have been running away from Kenyan showbiz like jilted lovers. After unsuccessfully trying their hand in showbiz sponsorship, many have chosen to use alternative marketing channels.

Every year companies allocate billions of shillings to marketing and advertising, but very little of that money goes to showbiz. Even those that do invest in showbiz do so through internally generated concepts like Safaricom International Jazz, Twaweza Live and Coke Studio.

According to an IEG survey dubbed ‘what sponsors want and where sponsor dollars will go in 2018’, about six out of 10 sponsors said they would end their contracts prematurely. They sighted a dissatisfaction in the way their deals were being handled.

While sponsored entities are focusing on giving sponsors signage and exposure at events, their clients want more digital and mobile exposure. When asked if they would increase their sponsorship dollars 47 per cent of the companies surveyed 47 per cent said they keep it as is, 20 per cent would decrease while only 33 per cent would increase. About 68 per cent of firms surveyed indicated they were looking for new sponsorship deals indicating they were not very happy with the deals they are in.

Misguided investment in showbiz has been cited as a leading reason for this disappointment. Experts hold that some sponsorship deals are doomed from the get go.

Apart from producing multiple hits and being CEO of Decimal, Eric Musyoka has produced many advert gingles and worked with numerous corporates. He contends that there are many companies especially SME’s that don’t believe in the power of using showbiz for marketing and that’s why they don’t invest in it.

Based on research

Most of the SME’s use musicians for activations just because they see the big companies using them, not because they understand how to do it. According to him, this trend of using musicians for marketing was pioneered by the big American multinationals, like Coke and Pepsi.

Their investment however is based on research; before committing millions to showbiz they find out who their market is, and what passion points they can use to increase brand equity.

"In Kenya, most companies invest blindly, they pick artistes simply because someone in the management likes them,” he admits. “As a result they end up spending millions in events and activations but never seeing the benefit. Many companies are struggling to sell a product that no one knows and they focus more on selling instead of getting their name known. Musicians connect you to a wider audience giving you top-of-mind and that is the real value of sponsorship."

Mike Strano is the CEO of Phat Entertainment and has been at the centre of countless local and international concerts. He argues that there are many companies that invest in showbiz without any expert advice; it’s more of an ego thing than a calculated business decision.

Like any other investment, it takes a team of professionals to manage the process; from setting out clear objectives to establishing a work plan to meet the (Key Performance Indicators) KPI. However, when a client becomes a fan of the artistes as opposed to a business partner, that relationship is doomed to fail. He holds that there is a need to engage entertainment experts to help firms reap the best out of their sponsorship deals. He said:

"Brands use passion points for memorable experiences and music still remains a major passion point in Kenya. All the surveys out there indicate that music is still a strategic investment. I therefore don’t understand why some brand managers find music a risky investment.

Maybe the problem is how they are calculating their ROI on sponsorships. The greatest benefit to sponsoring an event is increase in brand equity, not ticket or product sales during the event.”

Give value

Experts are however optimistic that there is still loads of money to be made in showbiz. According to Lenny Ngungi a local Sponsorship Consultant, companies are still spending on showbiz.

He however admits that entertainment players have to give sponsors value for their money. Digital platforms have given companies more channels to get visibility which are not only cheaper and but also more effective and easier to monitor.

"Even small companies like Bonfire Adventures and Bountiful Safaris are investing heavily in showbiz with great results,” he explains. “You really have to be very creative when looking for sponsorships, not all co-operates align themselves to showbiz everyone has their own marketing strategy. The entertainment industry needs to understand it is competing for this sponsorship money with other sectors; they have to present a better deal.”

Though millions are made every year in sponsorship deals, it is nowhere near what the showbiz industry would make if it cleaned up its act. Globally, it is estimated that about 6 trillion shillings will be spent on sponsorship in 2018 with 2.4 trillion shillings being spent in America alone.

Although sports and CSR causes are major competitors, entertainment remains a major destination for this cash. There is work to be done on both side of the aisle, because cooperates will not continue throwing good money after bad.

On their end, firms need to make rational, research based decisions when it comes to showbiz. Entertainment companies however need to clean up their act and offer value to their clients. Sponsorship deals also need to be midwifed by experts who understand both ends of the table, to ensure a win situation for stakeholders.