A recent study funded by multiple industry groups has revealed the significant impact of the advertising industry on the country’s GDP. The report, commissioned by the Advertising Regulatory Council of Nigeria (ARCON), indicated that the sector’s value is estimated at ₦605.2 billion, with a multiplier effect ranging from ₦1 to ₦16.5. During a media briefing in Lagos, stakeholders were presented with the report prepared by PricewaterhouseCoopers (PwC). Dr. Olalekan Fadolapo, the Director General of ARCON, shared a positive outlook on the industry’s progress, particularly highlighting the successful launch of an Audience Measurement program.
Dr. Fadolapo expressed gratitude towards various sectoral organizations such as the Broadcasting Organisation of Nigeria, (BON) , Association of Advertising Agencies of Nigeria (AAAN), Outdoor Advertising Agencies of Nigeria (OAAN), Media Independent Practitioners Association of Nigeria (MIPAN) and the Experiential Marketers Association of Nigeria (EXMAN), for their contributions to the study. He emphasized that this report will serve as a basis for evaluating the impact of advertising on the Economy annually moving forward. It also highlights how crucial the industry is in driving consumer demand, fostering business growth, creating jobs, and promoting Innovation in various fields.
Spending in the sector is anticipated to soar to ₦893 by 2928.
During his speech, Dr. Femi Adelusi, leader of the Multiplier Study Committee, highlighted the significant role played by Nigeria’s marketing communications industry in fuelling the country’s economic development. He noted that the sector has established itself as a strong driving force in the nation’s economy. In 2023, the total spending on marketing communications in Nigeria was reported to be a staggering ₦605.2 billion, with a noteworthy compound annual growth rate of 18.7 percent over the previous six years, starting from ₦216 billion in 2018.
By 2028, spending in this sector is anticipated to soar to ₦893 billion, making up a notable 1.08% of Nigeria’s GDP, a considerable increase from 0.7% in 2023. Further analysis disclosed that the leading sectors contributing to marketing communication expenditure from 2018 to 2023 were content and creative services (13.4%), digital platforms (18.5%) and cable television (25.5%). He also mentioned that the changing marketing landscape has been influenced by a growing Investment in digital media, driven by higher internet and mobile usage. The popularity of Social Media and video-on-demand services has further contributed to this transformation.
Key actions were suggested in the study to boost the sector.
An increasing trend in creative and content production has been showcased in the study, with a Compound Annual Growth Rate (CAGR) of 15.8% from 2018 to 2023. The flourishing Nollywood industry in Nigeria has seen a significant boost thanks to investments from popular video-on-demand platforms such as Amazon Prime and Netflix, further enhancing this sector. It also highlighted the robustness of the sector, showcasing the growth of digital advancements, chances for collaborating with both local and global entities, utilizing cutting-edge technologies such as AI and big data analysis, Nigeria’s vast and diverse consumer base, and the possibilities for original marketing strategies tailored to the local market.
However, the industry is encountering obstacles including financial strains, changes in regulations, and rivalry from international competitors. In order to drive rapid growth and advancement in the industry, the study suggested various key actions. These included setting clear, measurable targets for the sector’s economic contribution, forming a Joint Industry Body (JIB) to facilitate cooperation among broadcasters, agencies, and advertisers, promoting alliances among industry participants, adopting a global strategy that combines global standards with local strategies, and leveraging analytical tools to closely monitor consumer behaviour and spending trends..
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Implementing these suggestions could lead Nigeria to fully realize the industry’s capabilities, promote long-lasting development, encourage the creation of jobs, and solidify Nigeria’s status as a prominent marketing communications center in Africa and other regions. The study has received positive feedback from industry stakeholders, who view it as a step in the right direction. They opined that the results of the study have caused a wave of enthusiasm within the industry, as those involved acknowledge the great potential that awaits. With this, the marketing communications sector is set to become a key player in Nigeria’s economic growth, driving innovation, creating jobs, and boosting economic activity.