• Wednesday, May 29, 2024
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Advertising practitioners tasked to find industry real size

Nigeria’s creative industry on global map again as X3M Ideas’ work tops in ACT Good Report 2024

With a strong conviction that the value of Nigeria’s advertising market is in the region of N500 billion ($1b) far higher than the figure of about N120 billion believed in the industry, an international media executive, Ronan Redmond, has tasked stakeholders in the industry to engage in appropriate research towards establishing the real size of Nigeria’s advertising market.

In order to do this correctly, he said the industry needs to define what sectors such as Nollywood, Fintech, Film Production and video streaming and others to be included in the computations as done in Europe.

Ronan Redmond spoke on “Advertising industry, size and data” at the National Advertising Conference in Abuja where over 200 advertising practitioners and government officials converged to chart a course for the industry.

“Advertising is now much more than just 60 seconds spot adverts. Today clients invest as much budgets into branded content creation, sponsorships and real-life activations and we need to include these spends into our market size findings.

“When we have established the real size of the advertising market then we need a reputable study by a Deloitte, PWC or one such other firm to establish the multiplier effect of the Nigeria advertising industry on the GDP of the Nigeria economy”

Ronan said that in most territories, the reason why stakeholders want to know the size of their advertising market is because by having a comprehensive understanding of size, helps them to present a case for investment (usually by advertisers) and financial support and funding (usually by legislators)

“Calculating market size can help convince those potential investors and financial supporters that the advertising industry is a sector in which they can put their trust and finances into”

Citing the World Advertising Research Centre (WARC) which estimates that Global advertising spend this year to be $655Billion, Ronan who also quoted Africa Index / Group M) said USA accounts for 35%, China / Japan / South Korea 20%, Europe 15% followed by South America and Canada of total advertising spend.

But Africa only accounts for up to $6Billion or 1% of Global Advertising Spend and Sub-Sahara Africa only accounts for $3Billion or 0.47% of the total Global Advertising Investment.

Read also: Noah’s Ark, X3M Ideas shine at 2022 LAIF Awards

Addressing how to grow the size of the total Nigeria advertising industry, the communication expert wondered why there is such disparity in size between Europe and Africa.

“ Could it be that the advertising practitioners in Europe are better at compiling the real size of the advertising industry there? Could it be that when calculating size, they take into account the blurred lines between traditional media and new media?

“Maybe the European practitioners are just more focused on demonstrating and making the case to their legislators on how their industry is an engine for growth to the European Union and in turn elicit support and funding that helps their advertising industry grow”

To unlock the true potential size of the advertising market in Nigeria, he suggested that Nigeria should take insight from elsewhere and work done in Europe to find this link between the size of the advertising market size and contribution to GDP.

For Europe, a report done by the Deloitte identified that for every Euro spent on advertising it is estimated to add an additional seven Euros to Gross Domestic Product. This means that the 92 Billion Euros spent on advertising at the time in the European Union would have contributed a staggering 643 Billion Euros to Gross Domestic Product there, representing 4.6% of the overall Gross Domestic Product in the European Union.

Another multiplier effect is employment benefits. The Deloitte report finds that advertising provides almost six million jobs in the EU, that is equivalent to 2.6% of all employment in the European Union and thirdly, it provides personal and social benefits by funding media services, he said.

He said Nigeria can become an African hub for advertising companies where the State can be more attentive and receptive to the industry like UAE and Egypt who invest back into the media and entertainment industries and have established Creative, Media and Production Free Zones, where advertising and media companies operating in these zones are exempted from all types of taxation such as Value Added Tax (VAT), Income Tax, Corporate Tax and Customs

But he cautioned that this must start by getting an accurate figure for the size of the advertising market in Nigeria, research to find the multiplier effect and really demonstrate the positive impact of all of this on the wider Nigerian economy.

Also speaking at the conference, the President of Association of Advertising Agencies of Nigeria, AAAN, Steve Babaeko who said as at 2014, advertising contributed about $3. 4 billion to US GDP which was about 19% of the GDP regretted that “Today, Nigeria advertising industry is grossly under- performing.

He buttressed his point that with Nigeria’s GDP of about $450 billion, advertising is doing about 1 % of the GDP. According to him, “It is sad news but also a good news because it shows there is room to grow”.

He said the industry needs to come together to create a better economy and a better advertising eco-system. He therefore endorsed the advertising conference which is charting ways for growth of the industry.