Second recession in 5 years causes heavy breathing for marketing communication industry
Africa’s largest economy has slumped into recession, the second in five years and marketing communication operators fear that this will prolong the unpleasant business environment the industry has faced in recent time.
The multi-billion naira marketing communication industry depends largely on the performance of other businesses which are affected by the economy. Kelechi Nwosu, the managing director of TBWA Concept told BusinessDay that the industry is already affected as “the industry grows when the economy grows”.
Nwosu, former president of Association of Advertising Agencies of Nigeria, AAAN put it directly that the consequence of the recession will be adverse. “The recession was not unexpected as the signs were open following activities which slowed down in the Q1 and Q2 due to Covid-19. But what we should be asking are the innovative ways the industry and as a country should take to allow us to come out of the recession”
With this recession, it will continue to have a ripple effect on the marketing communication industry which is battling to stay afloat from the effect of Covid-19, a pandemic which affected global economy, John Ehiguese, the managing director of Mediacraft said.
When companies don’t perform too well, due to poor macro-economic situation, the marketing communication industry suffers, Ehiguese said, pointing out that “When companies’ revenue goes down, unfortunately one of the areas they quickly visit is the budget for marketing communication” and this is why there is apprehension that the industry might not breathe soonest.
Ehiguese, who was past president of Public Relations Consultants Association of Nigeria, PRCAN, said though things have really been tough for a while especially since Covid-19 but he believed that the operators will find a way to weather the storm. “The industry will respond to the realities in the economy. “If your revenues are dropping, for instance, it will affect employment and perhaps many will downscale.”
He advised government to come out with a strong plan to deal with the situation and find ways of ameliorating the hardship Nigerians are facing at least in the short term.
Nwosu suggested that what Nigeria should do at this time is to spark and catalyse the different parts of the economy to begin to move very quickly and come out of the recession exacerbated by Covid-19 and poor demand for oil.
According to him, the marketing communication industry should expand its contribution to GDP and this can only come when more projects and contracts are executed by the industry. He implored government to engage more with Nigeria’s marketing communication industry for effective communication of government activities.
Globally, marketers whose responsibility is the promotion and positioning of products of companies they represent are facing daunting challenges amid weak economies exacerbated by Covid-19 pandemic. This has led to reshuffling of markets as consumers’ spending habits are fundamentally altered.
In Nigeria with the present recession, the challenges facing marketers are not different as they also face the upheaval task of engaging consumers to promote spending on brand’s products and developing effective business strategy in the midst of government Covid-19 interventions and recent protests. Surviving this challenging period which is hitting governments, businesses and households therefore should be more critical to marketers, Lolu Akinwunmi, Group CEO of Prima Garnet Africa told marketers recently at the National Institute of Marketers of Nigeria, NIMN 2020 fellowship award forum held online.
Akinwunmi who said the recession “made worse by an economy that had performed poorly in the last 24 months, and then weakened by Covid-19 in the last three quarters of 2020” stated that in every recession, marketers find themselves in poorly charted waters.
Guiding marketers on survival strategies in period like this, Akinwunmi, past chairman of Advertising Practitioners Council of Nigeria, APCON cited examples of marketing successes of companies that navigated recessions through some marketing strategies.
Since marketing principles are generally applicable across markets, Akinwunmi who has marketed successful brands, said market leaders like WalMart and Amazon have been able to survive and maintain their dominance through focus on implementing a single strategy more effectively than their competitors, and exceed customers’ expectations.
He listed four key successful factors that successful brands have employed to survive stressing that the key issues concern the speed at which organizations facing turbulent time must be able to respond and act.
The success factors, he said are strategic pricing; superior quality products; strong human capital policy and relevant customer relations strategy.
In his view on Nigeria sliding into recession, John Ajayi, a marketing communication operator and publisher, Marketing Edge Magazine said it is actually a challenging moment for all industries including marketing communication and brand support services sector.
He said if the brands in the economy are performing well, certainly, marketing communication will also survive as there will be enough job for the industry. “But a situation where the fortunes of brands are hanging in the balance, because of the situation of the economy, the brands will struggle to make sales as purchasing power will plummet. This will result to inventory of goods which will not encourage productivity. This will also result to cutting cost by brands to survive”
Ajayi agreed that survival will depend on innovation and creativity in business. He encouraged firms in marketing communication operators to support brands in terms of thinking on how to get the consumers to buy. He said the survival of marketing communication firms hangs in the balance and it is only those who are innovative that will survive the storm.