–A Sector-By-Sector Analysis based on PwC’s Economic Outlook for 2026
-Global Advertising To Surpass $1 trillion
-How Brands Can Capitalize On Digital Momentum While Managing Affordability Pressures
By Jeremiah Agada, Toyosi Olajide & Chidinma Abaraonye
Nigeria’s brands, marketing, and corporate communications industry stands to benefit from improving macroeconomic fundamentals, including moderating inflation that declined to 14.45% in November 2025 from a peak of 34.6%, a stabilizing exchange rate of ₦1,436.31 to the dollar, and projected GDP growth of 4.3% according to PwC’s Nigeria Economic Outlook 2026. Yet these gains coexist with formidable challenges that include poverty projected to reach 62% of the population, real household spending that contracted 2.5% in 2025 despite nominal growth, and persistent structural constraints across key economic sectors.
The Nigerian Entertainment and Media sector is projected to reach $4.9 billion in revenues in 2026, according to PwC’s outlook, maintaining its position as Africa’s fastest-growing E&M market. The creative economy segment, comprising cinema, music, radio, podcasts, and OTT video, is expected to contribute approximately $110 million, representing roughly 2% of total E&M revenues. Digital advertising specifically is valued at approximately $1.2 billion according to market research, with total advertising spend forecast to reach $1.04 billion in 2025 according to Statista, though this figure likely captures traditional advertising separately from digital channels.
Global Advertising To Surpass $1 trillion
Global advertising expenditure is set to surpass $1 trillion for the first time in 2026, marking what industry analysts characterize as the dawn of the “Algorithmic Era.” According to Dentsu’s Global Ad Spend Forecasts released in December 2025, global advertising spend is projected to increase by 5.1% in 2026, outpacing the anticipated 3.1% expansion of the global economy. This structural shift reflects advertising’s growing centrality to business strategy in an environment where algorithms increasingly determine what consumers see, like, and ultimately purchase.
WPP Media projects even stronger growth, forecasting global advertising revenue will reach $1.14 trillion in 2025 with 8.8% growth, continuing into 2026 with 7.1% anticipated growth. The upward revisions reflect more favourable trade tariff outcomes than initially feared, and the sustained AI investment boom is reshaping how brands connect with consumers.
Will Swayne, Dentsu’s Global Practice President for Media and Integrated Solutions, captures the importance of this moment: “Crossing the trillion-dollar threshold signals a structural shift in how growth is created. Media is now the front door to every brand and the most powerful system for driving relevance, creativity and value at scale.”
Digital Dominance
Digital advertising is forecast to grow 6.7% in 2026, which is 68.7% of total global investment, according to Dentsu. This digital dominance continues to reshape traditional channel hierarchies and create new advertising ecosystems.
Retail media remains the fastest-growing digital channel for the fifth consecutive year, expanding 14.1% annually. Brands are increasingly drawn to retailers’ first-party shopper data and closed-loop measurement capabilities, with retail media projected to overtake paid search by 2028 as the world’s second-largest digital channel.
Social media advertising is experiencing exceptional momentum, projected to grow 11.4% globally. According to WPP Media analysis, social spending is estimated to expand 14.9% to $306.4 billion globally in 2026, which is 26.2% of global ad spend. Social platforms now account for 40% of new advertising dollars.
Online video advertising is expected to grow 11.5%, driven by streaming adoption and short-form video proliferation across platforms including TikTok, YouTube Shorts, and Instagram Reels. The rise of creator-driven commerce, with 49% of CMOs planning to increase influencer marketing spend according to Dentsu research, positions video as central to modern brand storytelling.
Programmatic advertising is expected to account for more than four-fifths (81.4%) of digital investment in 2026. Algorithm-driven advertising is forecast to represent 71.6% of all ad spend globally in 2026, rising to 76% by 2028. This automation extends beyond media buying to encompass creative production, audience targeting, and campaign optimization.
Traditional media channels show mixed performance. Television advertising is projected to grow 2.4%, supported by connected TV adoption and major sporting events. Out-of-home advertising increases 4.1%, driven by digital OOH formats and programmatic buying capabilities. Cinema rises 2.2% on post-pandemic recovery, while print continues declining at 3.0% annually as audiences and advertising budgets migrate to digital alternatives.
Regional Growth Patterns
The Americas region is forecast to grow 5.2% in 2026, reaching $460.5 billion. The United States is expected to rise 5.0%, supported by the World Cup and midterm elections. Brazil leads major markets at 9.1% growth, while Canada is projected to expand 5.4%.
Asia Pacific remains the most dynamic region with 5.4% growth expected, reaching $376.4 billion. China is forecast to rise 6.1%, while India leads at 8.6% growth, driven by the ICC Men’s T20 Cricket World Cup, IPL 2026, and rapid digital expansion, particularly in retail media and short-form video. India’s advertising market expansion is bolstered by the country’s youthful demographic and e-commerce boom.
EMEA is projected to grow 4.2%, with the United Kingdom leading at 5.7%. These regional dynamics reflect varying degrees of digital maturity, economic growth trajectories, and platform adoption patterns that influence how brands allocate marketing investments globally.
Africa’s advertising ecosystem reveals a variation across markets, with Nigeria occupying a distinct position characterized by high growth potential tempered by structural economic challenges. South Africa maintains its position as Africa’s most mature entertainment and media market, projected to grow at a 3.5% CAGR according to industry analysis. Internet advertising, OTT streaming, and mobile gaming drive growth in this market, which benefits from stable connectivity infrastructure and increasing 5G adoption. Retail display advertising in South Africa represents the fastest-growing segment, expanding at a CAGR of 32.1%, followed by retail paid search at 27.7%.
Kenya is a global outlier, with the fastest-growing internet advertising market worldwide at a 16% CAGR according to PwC’s Africa Entertainment and Media Outlook 2025-2029. Video advertising in Kenya is projected to grow at an exceptional 22.3% CAGR through 2029, which is a reflection of the country’s mobile-first consumer base, where mobile connections exceed the total population. This mobile penetration, combined with a young, digitally native demographic, creates conditions for rapid advertising innovation and platform adoption.
Nigeria maintains its distinction as Africa’s fastest-growing E&M market overall at a 7.2% CAGR, projected to reach $5.8 billion by 2029 according to PwC analysis, as earlier mentioned. However, this growth rate is influenced by surging mobile internet access spending rather than pure advertising expansion. The market’s trajectory is a combination of demographic advantages, including Africa’s largest population, accelerating digital adoption driven by smartphone proliferation, and persistent structural economic challenges, including poverty, inflation, volatility, and foreign exchange instability that distinguish Nigeria from more economically stable African markets.
Nigeria’s Market Characteristics
Nigeria’s digital advertising and social media economy market is valued at approximately $1.2 billion according to market research from Ken Research. Digital penetration is advancing rapidly, with Nigeria’s digital advertising penetration expected to reach 84% by 2029, surpassing many global benchmarks. Mobile devices account for over 90% of internet access in Nigeria, with approximately 100 million smartphone users as of 2024, a 20% increase in smartphone sales year-over-year.
Social media advertising has emerged as the leading digital advertising segment in Nigeria. Spending is projected to grow 10.68% annually from 2024-2029 to reach $216.90 million by 2029 according to Statista forecasts. By 2029, mobile is expected to generate 71% of total social media ad spending in Nigeria.
Geographic concentration remains pronounced, with Lagos, Abuja, and Port Harcourt dominating Nigeria’s digital advertising economy. Lagos, as the commercial hub, hosts the majority of advertising agencies, creative studios, and tech startups. Abuja is the political centre, attracting government and NGO advertising spend. Port Harcourt, with its oil and gas industry concentration, contributes as energy sector companies invest in both institutional communications and digital marketing strategies.
GDP Growth and Sectoral Composition
Real GDP is projected to grow 4.26-4.3% in 2026 according to PwC’s Nigeria Economic Outlook 2026, primarily driven by services expansion in ICT, finance and insurance, and real estate sectors. However, this growth remains concentrated in capital-intensive sectors with limited spillover to employment-intensive activities that would more directly support consumer purchasing power and mass-market consumption.
The ICT sector sustained growth of 5.78% in Q3 2025, driven by rising mobile subscriptions, broadband penetration reaching over 120 million users at approximately 50% penetration, and widespread adoption of mobile and real-time payments. Finance and insurance recorded exceptional growth of 19.63% year-on-year in Q3 2025, driven by higher interest income from elevated policy rates and increased digital transaction volumes. Real estate contributed 13.36% to real GDP in Q3 2025 with 3.5% year-on-year growth, supported by urbanization trends and continued commercial and residential development despite affordability pressures.
These sectors typically maintain robust marketing budgets and sophisticated brand strategies, supporting agency revenues and creative spending. However, their concentration means that marketing industry growth remains somewhat insulated from broader economic struggles affecting the majority of Nigerian consumers and businesses.
The real sector presents a contrasting picture. Agriculture, manufacturing, and trade remain constrained by persistent insecurity that disrupted farmland access and displaced workers, high energy costs despite some moderation, elevated logistics costs, port inefficiencies, and continued import dependence for critical inputs. Manufacturing grew only 1.25% in Q3 2025, contributing 7.62% to GDP despite ongoing reforms. These structural bottlenecks suppress productivity, raise operating costs, and limit marketing investment capacity in production-oriented sectors that employ larger segments of the workforce.
Oil and gas retained its position as the dominant export driver, accounting for 56.1% of total exports valued at ₦12.81 trillion of ₦22.81 trillion in Q3 2025. Crude oil production reached 1.44 million barrels per day as of November 2025. With global prices projected around $55 per barrel in 2026 according to World Bank forecasts cited in the PwC outlook, the sector faces revenue pressure but operational stability. This matters for marketing because oil sector institutional advertising, corporate communications, and consumer-facing campaigns from refineries and downstream players represent noteworthy budgets.
Inflation, Exchange Rates, and Cost Dynamics
Nigeria achieved sustained disinflation in 2025, with headline inflation falling for eight consecutive months to 14.45% in November from a peak of 34.6%. This decline was driven by favourable base effects from the prior year’s elevated prices, easing food prices that declined to 11.08% in November 2025 marking a fifth consecutive monthly decline, improved foreign exchange stability that reduced imported inflation, and consistently tight monetary policy with the policy rate maintained at 27% through most of the year.
The disinflationary trend directly benefits marketing operations by reducing the naira cost of imported marketing materials including printing supplies, audiovisual equipment, and finished goods for campaigns; stabilizing costs for technology platforms and SaaS subscriptions typically priced in dollars; enabling more accurate budget forecasting as price volatility moderates; and beginning to restore consumer purchasing power, though recovery remains gradual and uneven across income segments.
The naira appreciated 6.9% year-on-year to ₦1,436.31 per dollar in December 2025 and remained broadly stable through the year, according to Central Bank of Nigeria data cited in the PwC outlook. Foreign reserves increased 11.1% to $45.45 billion, reflecting stronger foreign inflows, rising diaspora remittances, strong non-oil exports, and steady investor demand for high-yield domestic instruments. The convergence between official and parallel market rates, with official at ₦1,436.31 and parallel at ₦1,452 per dollar, reduces arbitrage pressures and improves predictability for budget planning.
For marketing practitioners, exchange rate stability enables more accurate budget forecasting for international partnerships, technology subscriptions, and media buying; reduces hedging costs and foreign exchange exposure management complexity; supports import-dependent sectors, particularly FMCG and retail, in planning promotional activities and product launches; and improves conditions for international client relationships and cross-border agency operations.
The Central Bank of Nigeria maintained the Monetary Policy Rate at 27% through most of 2025, before adopting a cautious easing stance toward year-end, lowering the rate to 27% at the November 2025 MPC meeting as inflation moderated. The policy rate is projected to decline gradually in 2026 as inflation continues moderating and foreign exchange conditions firm, with the CBN seeking to support credit expansion while maintaining price stability.
Bond yields across major maturities started declining in late 2025, with the yield curve flattening as 2-year, 5-year, and 10-year yields converged below the MPR according to PwC analysis. Yields are projected to fall further in 2026, supported by lower inflation expectations, reduced term premia as macro stability improves, improved fiscal coordination between monetary and fiscal authorities, and cautious monetary easing. This environment may gradually improve access to marketing investment capital for well-positioned brands and agencies, though credit conditions remain tight overall.
Consumer Dynamics
Poverty levels are projected to reach 62% of the total population, equivalent to 141 million people in 2026, according to PwC analysis. This is an increase from 61% in 2025 and 59% in 2024. The poverty dynamics have profound implications for marketing strategies. Premium and discretionary categories face sustained demand pressure as consumers prioritize basic necessities. Value positioning and affordability messaging become critical success factors across categories. Segmentation strategies must account for widening income disparities, with the top income deciles experiencing very different economic realities than the bottom 70-80%. Brand loyalty also weakens as consumers prioritize price over preference, increasing private label penetration and switching behaviour.
Food accounts for 70% of consumption among the poorest households, according to household survey data cited in the PwC outlook, limiting discretionary spending on branded products that typically drive advertising investment. This concentration of spending in essential categories means that marketing effectiveness depends heavily on reaching consumers at critical purchase moments rather than building sustained brand consideration over time.
Although nominal household spending grew 19.6% from ₦116.5 trillion in 2024 to ₦139.3 trillion in 2025, real household spending contracted 2.5% from ₦12.2 trillion to ₦11.9 trillion when adjusted for inflation, according to PwC calculations. This stark disparity shows that inflation has eroded purchasing power despite growing naira outlays. Consumers are spending more money to buy fewer goods and services, with direct implications for marketing ROI and media efficiency.
Real household spending is expected to recover modestly in 2026 according to projections in the PwC outlook, constrained by persistent price pressures in essential categories including food, transport, and energy; high interest rates despite cautious easing that limit credit-financed consumption; ongoing fiscal constraints limiting government support programmes and public sector wage growth; and employment concentration in the informal sector at 92% of jobs according to 2023 data with characteristically unstable income streams.
According to the CBN inflation expectations survey cited in the PwC outlook, 70.1% of households expect inflation to remain elevated over the next three to six months, driven by high energy prices, transportation costs, and exchange rate pressures. The key drivers identified by households include energy costs at 83%, transportation costs at 83%, exchange rate pressures at 78%, interest rates at 76%, middlemen activities at 76%, insecurity at 75%, infrastructure challenges at 72%, raw materials costs at 71%, and natural disasters at 62%.
However, by April 2026, expectations show signs of stabilization. The share of households expecting inflation to remain stable increases to 38.4%, while the share anticipating a decline rises to 29.9%, pointing to early signs of improving sentiment despite near-term pressures. These expectations shape consumer behavior by encouraging front-loading of purchases when prices are perceived to be rising, sustaining preference for bulk buying and stockpiling in certain categories, dampening major discretionary purchases and brand experimentation, and reinforcing focus on value and promotional sensitivity.
Fiscal Environment and Government Marketing Spend
Nigeria’s 2026 budget is set at ₦58.18 trillion with a deficit of ₦23.85 trillion which represents 4.28% of GDP, according to the Budget Office data cited in PwC’s outlook. Total expenditure is projected at ₦58.18 trillion against expected revenue of ₦34.33 trillion. Debt service is budgeted at ₦15.52 trillion, equivalent to 45% of projected federal revenue, materially constraining fiscal space for discretionary expenditures including marketing and communications.
Government advertising and institutional communications command some level of the market segment, particularly for corporate communications firms, media houses, and large agencies with government practice capabilities. The fiscal constraints create several dynamics affecting the marketing industry. Reduced government advertising spend is expected across MDAs, Ministries, Departments, and Agencies, as budget execution focuses on statutory obligations and priority expenditures. Longer payment cycles and cash flow challenges are likely for agencies servicing government accounts, a reflection of the cash management pressures documented in the PwC outlook. There will be an observable shift toward more cost-effective digital and direct engagement channels as government entities seek to maximize reach with constrained budgets. Increased scrutiny of marketing ROI and procurement processes can be expected as fiscal discipline intensifies.
However, capital expenditure is budgeted at ₦26.08 trillion in 2026 representing 44.8% of total expenditure, with infrastructure development and sectoral initiatives potentially generating demand for project-related communications, stakeholder engagement campaigns, public awareness initiatives, and strategic communications around reform implementation particularly in sectors including agriculture with ongoing mechanization and financing programmes, solid minerals with formalization and value-addition policies, power sector with ongoing reforms and private sector partnerships, and digital economy initiatives with regulatory developments and infrastructure investment.