Some of the major sectors hard hit by the coronavirus (Covid-19) effects are aviation, vehicle transport business, hospitality, travel and tours, event centers and the downstream oil sector.
Many airlines, both local and international have grounded their fleet while commercial vehicles, inter and intra city busses have stopped operation on account of rules on checking the spread of Covid-19.
The Nigerian hospitality sector, which is still recovering from the traditional lull in business between January and early February of every year, is facing even more difficult challenge occasioned by the coronavirus (Covid-19) pandemic.
From occupancy rate of between 50-60 percent in late January, hotels are now recording below 25 percent, the worst in the history of the sector due to lockdown over coronavirus.
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The pandemic is also affecting the downstream sector. The operators are battling with fundamentals such as low margins, source of forex, rate of forex and transportation logistics. Education sector is also affected.
What all this means for marketing communication industry is that media agencies, both creative, PR and outdoor, among others that have clients in these sectors as primary source of business sustenance are also in for hard time. This is in addition to heavy burden placed on them by the difficult operating environment occasioned by slow economic growth at 2.27%, marketing communication budget cut, multiple taxation, delayed payment by clients and competition.
It is expected therefore that companies operating in hard hit sectors are likely to sit down with their media agencies for review of marketing contracts, renegotiation of payment due to the lockdown and slow business over Covid-19, says an analyst who prefers anonymity.
The analyst who looked at this scenario said this is where collaboration and alliances among media agencies becomes significant. “A pre-alliance between agencies in different specialties such as creative, digital, PR and who separately have clients in different sectors is expected to pay off now”
This collaboration, it is believed will enable agencies that are facing difficulty with their clients over Covid-19 to leverage opportunities with agencies that have clients in other sectors such as banking, Telecom and FMCG that are not so much affected by the pandemic.
Mergers and Acquisitions are yet to gain popularity within the marketing communication industry in Nigeria as many of the operators value it in the theoretical terms while others are satisfied with CEO title than growing their businesses.
Across sectors, much integration is yet to take place. A report in BusinessDay said ‘The cases recorded so far are government policy-induced. For instance the Nigerian Enterprises Promotion Act 1973 compelled foreign investors to sell some selected companies to Nigerians. Much integration had not been recorded in the Nigerian economic scene, and if it has, it has not been pronounced until 2005 when major alliances were recorded, especially in the banking industry”.
