Last Updated on 12 June 2024 by Naijadazz
In a groundbreaking development, Nigeria’s integrated marketing and advertising arena has etched its name in the annals of history with a seismic impact. Through a harmonious symphony between pivotal industry groups and the Advertising Regulatory Council of Nigeria (ARCON), the industry’s elusive worth has been unveiled at a staggering $605.2 billion. This monumental feat was orchestrated by a comprehensive opus authored by the globally renowned management consulting virtuosos, PwC.
The report, unveiled by ARCON in the pulsating heart of Lagos, delved into the advertising sector’s contribution to the nation’s Gross Domestic Product (GDP), its intrinsic value, and its staggering multiplier effect – a resounding 16.5 times its worth, akin to an economic supernova.
Dr. Olalekan Fadolapo, ARCON’s maestro Director General, exuded optimism about the industry’s recent crescendos, including the launch of an Audience Measurement initiative just last week. He extended his gratitude to the Experiential Marketers Association of Nigeria (EXMAN), the Association of Advertising Agencies of Nigeria (AAAN), the Outdoor Advertising Agencies of Nigeria (OAAN), the Media Independent Practitioners Association of Nigeria (MIPAN), and the Broadcasting Organisation of Nigeria (BON) for funding this groundbreaking symphony.
Emphasizing the need to quantify the industry’s size and impact as an economic catalyst, Dr. Fadolapo remarked, “We cannot continue to improvise the industry’s magnitude. This report lays the foundation for us to assess the advertising realm and its multiplier effect on the economy annually, henceforth.”
The report’s findings underscore the industry’s paramount role as a catalyst for consumer demand, business expansion, employment, and innovation across sectors – a veritable economic dynamo.
Rebrand Nigeria and Beyond
In addition to the Audience Measurement and GDP Multiplier effect report, ARCON is also gearing up to host an event on the ambitious “Rebrand Nigeria” project, alongside other initiatives stemming from the resolutions of the National Advertising Conference.
Tunji Adeyinka, Chairman of the National Advertising Conference, explained the study’s genesis, noting that the 2022 conference highlighted a gap in understanding the industry’s GDP contribution, prompting the decision to engage PwC for a credible assessment. The report examined two key aspects: the advertising industry’s direct monetary contribution to GDP and its multiplier effect – the amplified impact of advertising investment on overall economic output.
A Formidable Economic Powerhouse
Dr. Femi Adelusi, Chairman of the Multiplier Study Committee, revealed the profound impact of Nigeria’s marketing communications industry on driving the nation’s economic growth. Addressing critical industry stakeholders and members of the press, he presented comprehensive findings.
“The marketing communications sector has emerged as a formidable economic powerhouse. The study estimates that for every ₦1 spent on marketing communications in Nigeria, the nation’s GDP increases by a staggering ₦16.5 – a multiplier effect that highlights the industry’s substantial value contribution.”
According to the study, total expenditure on marketing communications reached an impressive ₦605.2 billion in 2023, having grown at a remarkable compound annual growth rate (CAGR) of 18.7% over the past six years, from ₦216 billion in 2018. This trajectory is projected to continue, with spending expected to reach ₦893 billion by 2028, contributing a significant 1.08% to Nigeria’s GDP, up from 0.7% in 2023.
Dissecting the Industry’s Segments
Dissecting the industry’s segments, the study revealed that the top three contributors to marketing communication spend between 2018 and 2023 were cable TV (25.5%), digital media (18.5%), and creative & content production (13.4%). The proliferation of cable TV, driven by diverse content offerings and affordable package options, has captivated a wide consumer base. Additionally, the surge in digital media spend, fueled by increased internet and mobile penetration, as well as the rise of social media and video-on-demand platforms, has reshaped the marketing landscape.
The study also highlighted the growing influence of creative and content production, which recorded a CAGR of 15.8% between 2018 and 2023, driven by the popularity of smartphones, social media engagement, and the appeal of real-time online content. The investment by video-on-demand platforms like Netflix and Amazon Prime in Nigerian productions, particularly in the thriving Nollywood industry, has further bolstered this segment.
Challenges and Opportunities
While acknowledging challenges such as economic pressures, regulatory reforms, and competition from global players, the study underscored the industry’s strengths, including rising digital trends, opportunities for local and international partnerships, the ability to leverage technological innovations like AI and big data analytics, Nigeria’s large and culturally diverse market, and the potential for innovative, locally-tailored marketing approaches.
Recommendations for Accelerated Growth
To accelerate the industry’s growth and development, the study outlined key recommendations. These include creating specific, measurable goals for the sector’s GDP contribution, establishing a Joint Industry Body (JIB) for operational coordination among broadcasters, agencies, and advertisers, encouraging strategic alliances among industry players, embracing a “global” approach that combines international best practices with local initiatives, and utilizing analytics tools to track spending patterns and consumer behavior meticulously.
“The marketing communications industry is an economic force that deserves recognition and support. By implementing these recommendations, we can unlock the industry’s full potential, drive sustainable growth, foster job creation, and cement Nigeria’s position as a leading marketing communications hub in Africa and beyond,” the report recommended.
Industry Stakeholders’ Commitment
Steve Babaeko, President of AAAN, one of the study’s sponsors, alluded to a Chinese proverb, saying, “Having failed to record this achievement earlier, the next best time is now.” Corroborating the ARCON Director General, Babaeko, who envisions the report developing many legs running into the future, promised that stakeholders would continue to improve on this document from year to year. “As members of the stakeholders’ group, we are committed to seeing this happen. We must understand that advertising is central to building a robust economy. For every N1 spent in advertising, the ripple effects across other disciplines cannot be overemphasized,” he noted, reiterating the group’s commitment to improving the work.
Other industry key figures, including Mrs. Tolulope Medebem, President of EXMAN; Mrs. Brenda Nwagwu, Vice President of MIPAN; Kenny Ogungbe from BON; and Mr. Sola Akinsiuku, President of OAAN, among others, also praised the study, hailing it as a move in the right direction. According to them, the study’s findings have sent ripples of excitement through the industry, as stakeholders recognize the immense opportunities that lie ahead. With its proven ability to catalyze economic activity, spur innovation, and create employment opportunities, the marketing communications sector is poised to play an increasingly vital role in shaping Nigeria’s economic future.
