• Thursday, July 18, 2024
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Value of Nigeria’s advertising industry put at ₦605.2b – PwC Study

What CEOs can do to thrive in business amidst challenges — PwC

A new report commissioned by the Advertising Regulatory Council of Nigeria (ARCON) and funded by various industry associations has shed light on the advertising sector’s contribution to the nation’s Gross Domestic Product (GDP) as it put the value of Nigeria’s advertising industry at N605.2 billion as at 2023

The report was carried out by PricewaterhouseCoopers (PwC) and presented to stakeholders in Lagos Tuesday.

Speaking at the unveiling of the report, Olalekan Fadolapo, ARCON Director General expressed optimism about the industry’s recent strides, including the launch of an Audience Measurement initiative last week. He thanked the sectoral groups including the Experiential Marketers Association of Nigeria (EXMAN), Association of Advertising Agencies of Nigeria (AAAN), Outdoor Advertising Agencies of Nigeria (OAAN), Media Independent Practitioners Association of Nigeria (MIPAN) and the Broadcasting Organisation of Nigeria, (BON) for funding the study.

Strongly emphasizing the need to quantify the industry’s size and impact as an economic enabler, Fadolapo remarked, “We cannot continue to guesstimate the size of the industry. This report lays the foundation for us to assess the advertising space and its multiplier effect on the economy every year going forward.”

Fadolapo added that findings of the report underscore the industry’s paramount role as a catalyst for consumer demand, business expansion, employment, and innovation across sectors.

In his presentation, 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, the 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, he 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 its 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,” he said.

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.

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.

Tunji Adeyinka, Chairman of the National Advertising Conference, provided context on the study’s genesis. He explained that the 2022 conference highlighted a gap in understanding the industry’s GDP contribution, prompting the decision to engage PwC for a credible assessment. He added that 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.

Industry stakeholders have variously praised the study, hailing it as a move in the right direction. Among industry leaders at the event were Tolulope Medebem, President, EXMAN; Brenda Nwagwu, Vice President, MIPAN; Steve Babaeko, President, AAAN; Kenny Ogungbe from BON and Sola Akinsiuku, President, OAAN, among others. According to them, the study’s findings have indeed 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.