Brands And Nigeria’s IMC Industry In ‘Gloomy Times’
By Azeez Disu
The third wave of Covid-19 called the Delta Variant is currently causing a major threat around the world forcing companies to rethink the new normal, their business, and marketing strategies. Since the Covid-19 first broke out, the business landscape has been disrupted globally, causing many economies to slip into recession while many businesses are closing shop.
“We have moved to a recession that will be worse than the one we experienced in 2008,” said UN Deputy-Secretary-General Amina J. Mohammed.
Assessing the business implications of Covid-19, KPMG in its ‘Covid-19: A business impact series’ report revealed that 94 percent of the Fortune 1000 across the globe, and by extension, businesses in Nigeria, have been impacted and are already seeing the effect of Covid-19.
Nigeria’s Integrated Marketing Communication (IMC) industry which comprises advertising, public relations, experiential marketing, Out-of-Home (OOH) advertising, media-independent, and others is not immune to these effects as it witnessed issues such as budget cuts, payment delays, contract cancelations by clients, inability to get to some communities to embark on marketing activities and research, among other issues which disrupted business activities.
The astronomical rise in the cost of food and raw materials for production in the country is also affecting virtually all economic activities. As a consequence, most brands had to increase their prices to meet up with production realities while some consumers have taken to cutting their cloth according to their clothes by reducing their consumption of certain brands.
To be more specific, according to the National Bureau of Statistics (NBS), the rise in food index is caused by increases in the prices of milk, cheese, and eggs, coffee, tea and coca, vegetables, bread, and cereals, soft drinks, and meat. NBS reported that the prices of goods and services, measured by the Consumer Price Index (CPI), rose by 17.38 percent. That is lower than 17.75 percent recorded in June. “This implies that prices continued to rise in July 2021 but at a slower rate than it did in June 2021,” NBS said.
The boomerang effect of this in the industry means that there is a limited budget from clients, and agencies are left to compete for the limited budget to work on winning consumers’ loyalty. Interestingly, Covid-19 and other economic challenges forced some brands to reinvent, enter new markets and industries. For example, the Seven-Up Bottling Company, manufacturers of Carbonated Soft drink (CSD) brand Pepsi in Nigeria diversified to producing hand sanitizer called 2Sure and most recently they entered into the bath soap market with the launch of 2Sure Soap.
Also, more than ever before, brands are engaging their consumers on social media with different kinds of campaigns, online contests and giveaways including organising hybrid or solely online events. Some of such initiatives are Smoov Chapman In Harmony Challenge, Mamador first-ever virtual August women meeting, among others.
IMC agencies and brands have had to key into the online trend while also deploying medium like TV as more consumers now pay attention to it. This they do by sponsoring realities shows and talent shows like BBNaija, Nigerian Idol, and others.
They are a lot of challenges within the brands and IMC industry which range from data and audience measurement, insecurity in some part of the country, debt recovery, absence of pitch fee among others.
In another vein, the rising profile of media debt owed by multinational advertisers which have overstayed agreed working grace period of 90 days and 180 days in some quarters, has led to acute liquidity crisis in the industry. This has also created some operational challenges. The hardest hit is the electronic and the print media, and OOH advertising.
Also, the issue of quackery is another, from the Nigerian Institute of Public Relations (NIPR) to the National Institute of Marketing of Nigeria (NIMN) and others have several times instituted measures or reel out it laws against the act but sadly the issue is still on the front burner.
Insecurity and Banditry Affecting Business
Threatening insecurity challenges have become complex with the activities of bandits and kidnappers forcing more advertising and experiential companies to boycott the northern markets including some parts of the east.
“The insecurity issues in most parts of the country have greatly affected our business as we are concerned about the safety of our personnel, the extra cost of operations and reduced delivery of Service to our clients,” President of the Outdoor Advertising Association of Nigeria (OAAN), Emmanuel Ajufo said.
In addition, the President of EXMAN, Tunji Adeyinka, disclosed that insecurity has indeed affected consumer spending and marketing activities adversely, especially in the northern part of the country.
“Specifically, in the area of experiential marketing, physical activations have been seriously hampered in the regions where banditry and crime have been high. There are regions where our members have not been working because of insecurity. Sadly, we are experiencing this at a time when we should be reaping the gains of our investment in technology to meet clients’ demand during the lockdown,” he said.
Audience measurement is also a major issue affecting the industry, affecting the activities of OAAN to Media Independent Practitioners Association of Nigeria (MIPAN).
Sectoral groups are calling on brands to pay when their members are invited for a pitch because they spend a lot of resources in research and ideas which go into the presentation made to clients. The Experiential Marketers Association of Nigeria (EXMAN) for example stated that organisations inviting their members for pitches should prepare to pay N500, 000 as rejection fee to the agencies not picked.
Relatedly, the Heads of Advertising Sectoral Groups (HASG), a sectoral group made up of IMC professionals, recently demanded the amendment of the proposed APCON ACT CAP. A 7, L FN, 1988. They also called on the government to engage with stakeholders before making legislation that will affect the industry.
Noteworthy, HASG is the joint body of professionals across advertising, media-independent, OOH, advertisers, broadcasters, and experiential marketers as represented by the Association of Advertising Agencies of Nigeria (AAAN), EXMAN, MIPAN, OAAN, Advertisers Association of Nigeria (ADVAN) and Broadcasting Organization of Nigeria (BON).
Recently, in a letter addressed to the Senate President, the President of the House of Representatives and Chairman, House Committee on Information as well as Members of the House Committee on Information, HASG called for an amendment to certain sections of the proposed bill sponsored by Hon. Adeyemi Akeem Adeniyi.
Stating the progress on the bill, Dr. Lekan Fadolapo, Registrar and CEO of APCON disclosed that the law has passed through its first and second reading as well as the public hearing. “We are in touch with the senate and the house of reps committee on information and we believe the final reading would be successful and, in our favour, so that the reforms in the bill can be promptly signed into law,” he explained.
In another vein, HASG urged the Minister of Information and Culture, Lai Mohammed to engage the industry players and practitioners more and explore collaboration on issues critical to the industry before making pronouncements.
The body remarked on the federal government’s announcement that advertisers will pay a fine for advertisements placed on CNN, an international TV station, and other foreign-owned media channels and production of content abroad.
In recent times, APCON has been very active in helping industry stakeholders navigate gloomy times with initiatives and interventions that are not short of commendable. As cheery news, APCON and the National Broadcasting Commission (NBC} recently appointed First Media and Entertainment Integrated (Nigeria} Limited (FME1} for the development and delivery of audience measurement services on Nigeria Media Platforms. This is in line with the Federal Government’s commitment to deepening advertising spend and improve the advertising ecosystem.
On pitch fees, Dr. Fadolapo stated that the committee on Standard of Practice will guide all stakeholders to draw up an inclusive and acceptable term of engagement.
His words: “This why APCON, the regulator is getting involved, to bring everyone, all stakeholders to the table, including all the groups like AAAN, etc. We will need to agree on the terms of engagement, on the issue of pitch fee, and what should be the standard. We will not hide behind the absence of a governing council to keep silent, and not fulfill our mandate to the industry.
“What should be the pitch fee, the procedure in changing agencies, and the credit base as an industry? We will not just bring whatever happens in South Africa or Kenya into Nigeria as the cost of capital, inflation rate, and availability of funding from the government are not the same. We cannot just pick things hook, line and sinker”.
Even as there is the issue of government and its ministries including agencies not engaging the services of Nigerian professionals to execute their communications campaigns, NIPR reaffirms that it is committed to the Nigerian project and promoting the Nigerian brand. In a national survey it conducted recently it said “From our findings, the NIPR believes that Nigeria is too strong to disintegrate and we as professionals are committed to making the Nigerian project work”.
Multiple taxations is another challenge confronting the industry, which APCON has disclosed that it is working with the Federal Inland Revenue Services (FIRS) to sort out challenging issues relating to tax applications.
In the words of Dr. Lekan Fadolapo, “FIRS and APCON created a committee to interface on this issue and they have promised to set aside an exclusive tax desk for the industry in their offices. Any agency with tax-related issues would receive express attention on that desk”.
In bracing up for the new realities and recovering from economic challenges, AAAN President, Steve Babaeko said “The idea may have been mooted way ahead of its time over a decade ago but there’s no better time than now to give it a good shot,” he explained.
He also urged practitioners to collaborate in the interest of growing the industry, citing the collaboration among telecommunications companies in the country on co-location of masts which many brands and IMC agencies can lesson from.
Felix King, CEO, Oracle Experience on his part chatting a course for experiential marketers and marketing professionals said, “The truth we have come to embrace is the fact that Covid is not going to leave anytime soon, so, what is happening now is that people are learning to leave with it, everyone is adjusting to the times, taking necessary precautions as stated and advice because we definitely cannot continue to live our lives the way we used to.
“For now, we are not going to see all the massive concerts taking place now what we have are the smaller concerts happening with the different precautions put in place. I will also say that now, the budget is being re-managed, doing more with whatever you have and giving optimum value. Most companies are no longer under the pressure as pre covid as most FMCGs are even selling more than pre Covid era. So, what most brands are doing now is while trying to still do those activations, how can we put an element of Corporate Social Responsibility (CSR) into it so that they are doing one thing and also using the avenue to give back to people to recover from the effects of Covid.”
In conclusion, brands and IMC agencies’ relationships must be redefined and both parties should see each other as partners and erase ‘master or servant’ work culture in the interest of brewing great brands that transit generations and a continent.