2022 so far, its prospects and challenges for brands and agencies
By Zion Rufus
2022, so far, has witnessed a fair share of ups, an unprecedented share of downward turns, and a series of setbacks to global developments. In 2021, per an Ipsos survey, over 75% of people around the world opined that 2022 will be a better year than 2021. However, as the year approaches its mid, a peek at the past few months have ushered in some new convictions.
On that note, we have highlighted some of the challenges, prospects, and their possible impact on the marketing and advertising sector.
Challenges
Russia- Ukraine crisis
Economic impact of the war in Ukraine on the rest of the world has been devastating as energy and commodity prices have surged, adding to inflationary pressures from supply chain disruptions and the rebound from the Covid‑19 pandemic. In the same vein, sustained increases in the general price level of goods and services have continued to erode the purchasing power of consumers across the globe.
In addition, the mass exodus of multinational firms like Coca-Cola, Pepsi, KPMG, Nestle, Unilever, PwC, IBM, Shell, Microsoft, HP, and Mastercard from Russia will shake the global financial market.
Advertising fraud to hit $81B
Global research company AI Multiple estimates that the rise in digital ad fraud will cost the global economy a whopping $81B. Marketers have woken to find themselves stuck paying for ads that are shown to fake visitors, invalid traffic, and inaccurate audiences. In a study conducted by the Association of National Advertisers(ANA), it was revealed that up to 11% of display ads and almost a quarter of video ads were viewed by softwares, and not people.
Inflation
Rufai Ladipo, Managing Director/C.E.O Agile Communications Limited said: “Inflation is one of the indicators that can affect the success of brands this year, accompanied by the challenges posed by foreign exchange. The spate of insecurity and the entire environmental scenario will determine the rate at which they will grow but we are very optimistic that this year will be definitely better. When an economy is not doing very well, it affects the way we operate, especially the marketing budgets for brand communication.
In Nigeria, inflation rate shot up to 15.92% in March of 2022, the highest price hike since October 2021, with prices of most commodities soaring. Cost of food increased 17.20%; prices of imported food rose 17.56 percent year-on-year in March, accelerating from a 17.48 percent advance in February, according to data shared by the National Bureau of Statistics (NBS), Nigeria.
Client in-housing
Clients in-housing media and creatives have topped the list of agencies’ concerns. Forrester’s August 2021 CMO Pulse Survey revealed that 44% of CMOs plan to move more marketing in-house this year 2022.
Owing to rapid transformation of the industry, the marketing and advertising sector is currently witnessing an evolving agency-client relationship as marketers are expanding their in-house expertise. A Kepler survey also revealed that larger enterprises appear to be more committed to the idea, with 63% of respondents from companies with $10 billion or more in revenue considering full in-housing.
Prospects
Adspend shifts to digital
Nigeria’s advertising industry is geared up for the groundbreaking possibilities of 2022 as experts anticipate an increase in digital advertising budget coupled with an acceleration in digital penetration and innovation.
One of the experts, BB Buzz CEO, Yomi Olaniwun opined that the bigger portion of ad budget will shift to digital this year.
He said: “2022 is a strategic year, especially if we also look at the fact that elections are coming up next year; it is a year of big digital spending as the budget will shift to digital. However, those who feel they don’t want to lose out of the budget will begin to position themselves as digital marketing agencies so that part of that budget can come into their pocket.”
Global B2B influencer marketing to hit $11.7 billion
This year, it is expected that influencer marketing will gain more ground as collaborations between brands and influencers become more diverse and purposeful. According to global research firm, ResearchandMarkets, B2B Influencer marketing has the potential to generate $11.7 billion in revenue by the end of 2022, with more than 38% of B2B companies currently exploring influencer marketing as a new lead-generation avenue.
Digital advertising to exceed 60% of global adspend
2022 also kicked off on a positive foot as advertising across all digital channels is projected to exceed 60% of global adspend for the first time this year, reaching 61.5% of total expenditure according to market reports from Publicis Groupe media agency, Zenith.
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