Global economic challenges and Nigeria’s peculiar environment which have heavily affected businesses are taking a toll on the advertising sector making the industry dull at the moment.
From mid-2022, the marketing communication industry is yet to experience some brightness.
This is due to direct and indirect consequence of economic hardship on companies occasioned by Covid, inflation at 21.3% in December, 2022; exchange rate at N760 per dollar; diesel price at N810 per litre; epileptic power supply; poor infrastructure; low purchasing power and cautiousness in business planning due to the 2023 elections.
The multi-billion naira marketing communication industry depends largely on the performance of other businesses but presently, organisations are hard hit by the tough economic climate. The IMC industry simply grows when the economy grows.
The frail economy further weakened by Covid pandemic has performed poorly as the situation has created a challenging moment for all industries including marketing communication and brand support services sector.
Proffering more reasons for the present dull activity in the marketing communication industry, Calixtus Okoruwa, the CEO of XRL8, a business management consultant firm based in Lagos said the “truth is that marketing communication industry is a sector that services the wider economy and if the economy is not doing well, there is no way the Integrated Marketing Communication, IMC industry will do well”
He said presently, it is only those IMC companies that are privileged to have big multinational accounts that are able to operate with their heads above water. He said for many others, it is difficult as many organisations in various sectors are struggling to survive and if they are struggling to survive, those advertising companies that service them will equally face difficulty.
During recessionary time, businesses want to conserve their capitals and deploy it to areas where they imagine will yield more for them, he said.
Similarly, an advertising expert, Kelechi Nwosu who is the CEO of TBWA Concepts linked the current dull moment in the IMC industry to the new year when organisations are still at planning and strategy stage. He also identified recession and high inflation which compel companies to manage their spend; and the election with its low spend and fear of uncertainty including policy summersault.
Recently, the President of Advertising Association of Nigeria, ADVAN, Osamede Uwubanmwen told BusinessDay that many advertisers have locked up their budget for commercial purpose in the media due to elections. This means that they will not spend much for campaigns and product promotions until after the elections.
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He said that advertisers would not really want to fight in the space during the political campaign period as the product messages will be overtaken by political communications.
“If you put an advertisement out and there is a political rally, people will discuss more of the rally. We will just be quiet as most of the prime spots in the media have been taken up by political messages” he said.
In his further assessment of the economic environment and its effect on marketing communication, Okoruwa said “this is why the business operators are hoping that the election will lead to a paradigm shift in the fortunes of the economy, ;leading to more confidence by the world business leaders, multinational corporations that they want to support Nigeria and do more business with Nigeria in terms of investment and infrastructure development”.
Okoruwa said “when that time comes when the economy begins to show signs of growth the marketing communication industry will also blossom”.
On how the next government approaches the mounting debt burden, insecurity, inflation, exchange rate and unemployment, fuel subsidy, poor infrastructure, poor electricity supply and low morale in Nigerians all which that have combined to cause ‘Japa’ syndrome remain a focal point which will largely form a direction for many businesses.