Nigerian IMC Industry: Is the Grass Green?
By Azeez Disu
Technological disruption and other issues are changing the Integrated Marketing Communications (IMC) landscape globally. Agencies are now reinventing to key to current realities. In Nigeria, the story is not different; many IMC agencies are restrategizing to be counted.
Meanwhile, the industry is hampered with series of challenges that is declining its revenue.
“Nigeria has faced various challenges over the last two years including recessionary trends from mid-2016, and a rapidly rising inflation, however we are seeing steady recovery in job prospects and personal finances, bringing some relief to inflation and we expect further recoveries in both sentiment and consumption.” Abhik Gupta, Managing Director, Nielsen West Africa & Maghreb commented on the state of the country’s economy.
It is worthy of note that ad spends by brands is declining year in, year out according to MediaFact, a report released by MediaReach OMD yearly. The total advertising expenditure in the country declined by 3.3 percent in 2017, reaching N88 billion compared to N91 billion in 2016 and N97.9 billion in 2015. Industry analyst attributed the decline to recession which started 2016 and ended in 2017.
In this vein, the state of the economy affected consumer purchasing power and marketing budgets as well. As the economy picked up, marketers continued their long competitive race for victory. More than ever, they are taking advantage of different components of IMC, such as advertising, public relations, personal selling, sales promotion and direct marketing to achieve their marketing objectives.
THE MANY WORRIES OF NIGERIA’S AD INDUSTRY
Advertising in Nigeria is like a pot of soup; its aroma is perceived by millions of people, an industry flowing with milk and honey one might say, estimated to be about $500m in 2015 according to an article published on an online site, The Nerve Africa. The estimation is expected to have grown tremendous more than that this year, especially with the heavy spent by brands during and before the 2018 FIFA World Cup. Also, advertising spend is also expected to increase this year due to the forthcoming 2019 General Election, as political gladiators prepare to embark on massive political campaigns.
However, industry stakeholders at the 2018 edition of Association of Advertising Agencies of Nigeria (AAAN) Annual General Meeting (AGM)/ Conference held at AbeokutaOgun State, expressed that not all of the huge revenue attributed to their industry actually come to their member agencies.
On a different note, the creative industry churning out mind-blowing contents across media but surprisingly in terms of regulation, Advertising Practitioners Council of Nigeria (APCON) has yet to have a constituted Governing Council since it was dissolved in accordance with the directives of the Presidency in 2015.
The Acting Registrar of the Advertising Practitioners Council of Nigeria, APCON, Mrs. Ijedi Iyoha pointed out that the absence of APCON Council is affecting the full operation of the body which also includes the appointment of a substantive Registrar and the constitution of the statutory panels charged with the disciplinary measures for erring practitioners.
With declining patronage of some agencies, many resulted to affiliation deals with global agencies while some global agencies have opened shop in the country with equity share with Nigerian agencies. Like marriage, some of the partnership has been successful while some partners had to go their separate ways. One of such is Ogilvy (a member of WPP Group) and Prima Garnet which led to legal battle before it was settled out of court.
“Personally, if you ask me and I am not speaking for anybody, I will never go into affiliation again. You can have technical partnership because you need to interact with people from other parts of the world but you cannot grow with the kind of affiliations that we have,” Lolu Akinwunmi, Group CEO of Prima Garnet Africa said.
Another pertinent issue is that the industry is not gender equality as it currently boast of only one female creative director in the whole of the country, in the person of Sinmisola Hughes -Obisesan, Creative Director at Leo Burnett Lagos.
Although there are plenty of female creatives in the industry, corporate boardrooms are less inclusive, which means that they don’t always get the new insights or perspectives needed to reach today’s female consumers.
“Ads that target women all say the same thing, like we haven’t evolved as a species,” Sinmisola stated.
Baring his mind on how to chart a new course for the industry, Steve Babaeko, Vice President, AAAN and CEO, X3M Ideas said, “What is important for us is to get the respect of this association back. Right now, I don’t think we are prominent enough at the national front because, if it is true that the government is still giving out jobs that can be effectively executed here in Nigeria outside, then, we urgently need to do something about that. That action shows disrespect for the advertising industry in Nigeria.
“These are the kind of stuff we want to stand up and fight. Other countries will want to protect the local industry by supporting them while ours is purportedly taking scarce foreign exchange to some seedy portfolio agency somewhere in Bahrain.”
In addition, Lanre Adisa, Chief Creative Officer, Noah’s Ark and the first Nigerian to be jury member of Cannes Lions (2018 edition) called for collaboration from agencies in order to be relevant. He stated that most of the awards winning works at Cannes Lions were won by agencies that collaborated, pointing that same can be done in the country for the industry to grow stronger.
Meanwhile, Kelechi Nwosu, Managing Director, TBWA\CONCEPT, also well known for his agency’s campaign on “Proudly Made-in-Aba” urged agencies to be more enterprising for them to contribute meaningfully to the Gross Democratic Product (GDP) of the country.
Uwosu, therefore, called for research and innovation, asking the question “How many invest enough money on research and innovation? He is optimistic that if agencies invest in these, it will invariably contribute to the well beings of citizens and the country at large.
OOH ADVERTISING IN CRISIS
At the height of Nigeria’s recession in 2016, the country’s out-of-home (OOH) advertising industry was badly ravaged by deep cuts in marketing and media budget across various brand categories.
After the country exited recession, it appears that many of the OOH agencies are still in recession.
There is no gain saying that the industry is rocked with crises which includes issues such as media debt, declining patronage of outdoor advertising platforms resulting in large number of vacant boards, overregulation by government among others. These have turned the industry into a shadow of itself, although they are few agencies who are still waxing stronger in the midst of the crisis especially because of their deployment of digital OOH technologies.
Ijedi Iyoha, Acting Registrar, Advertising Practitioners Council of Nigeria (APCON) advised the industry to reinvent and deploy technology-driven boards.
“With your varied experiences in this business, you are better-positioned to appreciate the necessity to adjust your business models to create a more focused, client-driven, smart and technologically innovative organizations. You can explore various financing options that will enable you invest adequately to complete in today’s OOH business which globally, is leveraging digital mobile technology, environment-friendly structures, signage materials and lighting as well as monitoring and performance reporting systems and measurement/rating metrics that satisfy the demands of clients.
“Businesses may need to explore various forms of partnerships, collaborations or consolidation which may deny them the level of control they currently enjoy but guarantee greater efficiency, value-delivery and return on investment.” She disclosed.
According to industry watchers, marketers are now spending much of their marketing budget on Below-The-Line (BTL) marketing, because of its real-time value and measurability. The industry is worth N30 billion in 2016 according Kehinde Salami, President of Experiential Marketers Association of Nigeria (EXMAN).
“What I have witnessed in the last few years is a situation where spending has moved gradually to experiential marketing sector from advertising. It’s the reason why you find some advertising organisations having a second line interest in experiential, simply because the spend is moving towards that experiential.” an experiential marketing expert, Jerry Uchenna of Uzara Concept, said.
Meanwhile, research shows that the activity of street urchins, popularly known as area boys, is a major challenge confronting experiential marketing business in the country. In response, Salami said “As a practitioner, you need to know some of these boys, especially those areas you may likely run into them, during activations. You must also devise your strategy of handling them to ensure that they do not debar you from carrying out your activities. Actions of the street urchins have become a major challenge to advertising business generally in Lagos,”
Revealing the association’s plans for the year (2018) and expectation from the government, he stated “What government can do to assist agencies is to partner with EXMAN by creating accessible funds at a single digit interest rate for our members. In the coming year, we intend to begin the engagement process with relevant stakeholders. As an industry that engages no fewer than 100,000 personnel annually and 500,000 indirectly, the need to further support this Small and Medium Enterprises, SME, sub-sector in 2018 cannot be understated.”
Speaking recently at the EXMAN Business Conference in Lagos tagged: Growing Nigeria’s Brands Through Meaningful Experiences, Oare Ojeikere, Group Chief Marketing Officer at Dangote Plc, said, “it is imperative for experiential marketers to unlearn old way and acquired new skills because the economic realities required new rule and radically different way.”
Oare said this is necessary because what is redefining marketing now a day are the trio of “Internet, Media and Social Media,” adding that marketers are also required to “change their mindset to become customer-centric which will eventually improve on the bottom-line.”
Technology disruption, social media trend, media fragmentation and proliferation are affecting the practice of public relations in the country. Also, is the hiring of foreign consultants by Nigerian government at the expense of local practitioners and agencies.
According to a report on icirnigeria.org published in 2016, “In the last three years, the icirnigeria.org has tracked many of such controversial contracts amounting to over $6 million dollars awarded by different agencies of the Nigerian government to foreign firms to launder the country’s image abroad.”
A recent example is the award of a brief to a foreign firm for the public relations campaign for the Debt Management Office of Nigeria in its effort to sell Eurobonds. This, Public Relations Consultants Association of Nigeria (PRCAN) protested and the Minister of Information and Culture, Alhaji Lai Mohammed vowed that the government will curb such practice in the future.
“As for your request that government should involve your members in planning and executing PR campaigns, you are preaching to the converted. Discussions are ongoing on the need to patronise Nigerian PR consultants when planning government campaigns. So, rest assured on that.” He said.
Fighting fake news is one of the bottlenecks the industry is facing, especially with growing usage of social media. On this, experts have advised practitioners to be fully involved in the new digital reality in the interest of combating the spread of fake news, which is a challenge globally.
Recommending solutions to some of the industry’s challenges, John Ehiguese, Managing Director of Mediacraft Associates Ltd and President, PRCAN urged practitioners and firms to position themselves as consultants and begin to offer robust communication solutions to clients. He added that by listening to clients and understanding their challenges, a robust solution can then be packaged which will invariably impact on their bottom-line.
“We need to become business consultants with a communication focus rather than communication consultants. Consulting firms like Philip Consulting when they go to a client they propose a holistic business solution with communication as part of it. If you are going to play in this field successfully you have to begin to look in that direction so that you can position your business”
He explained further that the dearth of research and measurement is a challenge to the industry and more than ever clients are demanding for the impact of a PR campaign on their Return of Investment (ROI) and reputation. He, therefore, urged practitioners to embark on scientific research and measurement.
Tech companies in 2016 like Google, Facebook, Twitter and Yahoo took over 65% of global digital ad revenue, while print ad revenue declined by 10% on the global average.
According to PwC’s Global entertainment and media outlook 2017 -2021 “Digital revenue will continue to make up more and more of the industry’s income, accounting for more than 50% in 2018.”
With the number of internet users growing rapidly in Nigeria, the connection between individuals and social media cannot be ignored. This trend is forcing advertisers to go to where their consumers are.
“One question which answer points us to a positive budget direction for digital media in 2018 is; where else can advertisers whose brands are constrained by water-shed advertising policies spend their marketing communication budget if not the digital media?” Emeka Okeke, Group Chief Executive Officer of Media Fuse Dentsu Aegis Network stated.
Okeke explained further, “Two more pointers to increasing growth in digital media budget is inventory costs and measurability relative to other media channels. So, I can safely tell you that for the category of advertisers that are restricted by law to advertise or cannot afford the high cost of conventional media space in Nigeria will continue to explore the digital ecosystem and therefore the digital marketing spend will continue to grow at a phenomenal rate underscored by growth in internet penetration and smart phone accessibility. Digital budget has gone up by over 400% at the expense of TV and radio. “
ON A PARTING NOTE
Agencies are now evolving; agencies are now moving from being specialized agencies to integrated 360 degree marketing communications agencies, offering Advertising, Experiential, PR, Media buying and planning, Digital marketing and others. In essence, below the line and above the line are at the point of convergence.
As regards the convergence of above the line (ATL) and below the line (BTL), Okeke said “In a convergent communication world, both below the line and above the line are at the point of convergence. What we have now is a hybrid situation which is a combination of both channels. This communication enables advertisers to take investment decision not based on below the line, or above the line. They simply make choices based on where they will get the most returns for every buck they spend. That means whether it is a combination of the two or media neutral channels like, email marketing, one-on-one marketing and others, what is important is that advertisers are making decisions depending on anticipated return on investment.”
PwC also revealed Mobile advertising is growing space, but still needs better measurement practices. “The growth of Internet advertising is being powered by mobile advertising, which grew by 58.7% in the past year, and will continue to expand at an 18.5% CAGR through 2021.”
This means internet advertising has a lot of opportunities for IMC players to key into. The players of the industry and brands have to align with current realities across IMC platforms to remain relevant.