…As January- August proved difficult for agencies
The first eight months of 2023 have been described as difficult period for business especially marketing communication, but experts said there is hope if operators could offer solutions to clients instead of waiting for briefs.
The year continued with Naira redesign policy which had debilitating effect on consumers and business. There was election period which made consumers and businesses circumspect. In addition to fuel subsidy removal, inflation skyrocketed to over 23 percent which weakened purchasing power.
Globally, the continued Russia, Ukraine crisis is driving economic headwinds for the world, as whatever plagues the global north has a way of spilling over to other regions including Africa.
In a chat with BusinessDay, Steve Babaeko, Founder and CEO of X3M Ideas, a creative house said the “best way to drive revenue growth in a time like this, would be to plumb the depth of organic growth, find a way to do more with current clients in your portfolio.
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“To do that successfully, one must be proactive by going to clients with solutions instead of always waiting for briefs”, he said.
Similarly, John Ehiguese, CEO of MediaCraft Associates who describe the first eight months of 2023 as very challenging said clients are moving their campaigns to Below the Line platforms. “There is significant shift to BTL because it offers more value and it is measurable”, he told BusinessDay.
Ehiguese said public relations practitioners are benefiting from the shift to BTL. “The naira redesign also affected liquidity and there is a general decline in the economy. It was not surprising that politicians did not spend so much on communication this time around. They also had alternatives in social media”.
“People expected a lot of expenditure on marketing communication and advertising due to the political campaign of 2023 unfortunately, the landscape changed. Now the engagement with consumers is more through digital, and that is why a lot of people are disappointed. With digital, clients can get more for less in terms of spend. Social media was instrumental in last political campaign and it is increasingly creeping into the product campaigns”.
Answering the question on why marketing communication industry is not witnessing mergers and acquisition as survival strategy; he gave two reasons behind it.
He said culturally everybody wants to be in their environment. “Who is going to subsume his business to another especially after some years in operation? Secondly he said major reason for M&A is to build scale but said that scale does not automatically translate to profitability in this environment. “For the fact you are big does not mean you will have big clients or that you must make money, it does not correlate.
He said that however, M&A is inevitable, at some point the market will get there.
He was confident that MediaCraft will continue to grow as “we are seeing signs that business is going to be great for the rest of the year. More briefs are coming from clients who want to do more as demand is increasing for PR in view of its cost effectiveness”.