Digital marketing professionals raise alarm over unending impact of dollar spending restrictions
By Zion Rufus
Digital marketing practitioners in Nigeria are expressing their concerns over the ongoing impact of restrictions on dollar spending on the country’s digital marketing ecosystem.
As more Nigerians call on the government to lift the ban on Naira cards for international dollar transactions, Industry professionals are again raising their voices to draw attention to the harsh realities of the negative impact of the restrictions, and the challenges faced by businesses and marketers.
The issue dates back to 2022 when several Nigerian banks, including GTB, Zenith, Access Bank Plc, UBA, First Bank of Nigeria, and Ecobank, announced the suspension of international transactions with domestic naira cards. This move limited the ability of Nigerians to shop online from international stores and hampered digital marketing professionals’ ability to pay for ads and other services using their naira cards.
The restrictions on dollar spending have had a significant impact on the budgets of businesses engaged in digital marketing. Many advertising platforms charge in foreign currencies, such as dollars, making it difficult for Nigerian businesses to allocate sufficient funds for their digital marketing campaigns. This has resulted in reduced advertising efforts and the need to explore alternative, more cost-effective strategies to reach target audiences.
Access to international platforms that require payments in foreign currencies, particularly dollars, has also been limited. Nigerian businesses are finding it challenging to leverage these global platforms, hindering their ability to expand their reach beyond the country’s borders and tap into global markets. While focusing on local digital marketing channels like social media, local influencers, search engines, and local websites can offer a more targeted approach, it may limit opportunities for global growth.
Tunny Ogunnowo, a lead strategist at Absolute Hearts Media, highlighted the challenges faced by digital marketing professionals in accessing paid tools and platforms required to drive marketing activities.
Since many of these tools are priced in foreign currencies, the restrictions force marketers to seek alternative payment methods that often come with additional costs or complications.
“Consequently, these issues have the potential to increase marketing expenses and disrupt the productivity of digital marketers,” Ogunnowo said.
While some new brands and products have emerged to address the payment problem, he argued that, on the whole, the restrictions on naira cards have caused more harm than good to digital marketers in Nigeria.
Meanwhile, justifying the restrictions, Nigerian banks had cited “current market realities on foreign exchange” while gradually reducing the monthly international spending limit on naira cards from $100/$120 to $50/$20. However, industry analysts and experts believed that the scarcity of foreign exchange may have contributed to these developments. Some even predicted that the restrictions could lead to the adoption of more Fintech solutions that could provide the same access.
Fridel Makun, a marketing consultant, expressed concerns about the implications of the restrictions on budgets, access to international platforms, and the emphasis on the local audience.
The marcomms professional asserted that allocating budgets for digital marketing campaigns has become challenging for businesses due to the limitations on dollar spending.
“Advertising platforms typically charge in foreign currencies, such as dollars, making it difficult for Nigerian businesses to plan and execute effective marketing strategies. As a result, businesses may resort to reduced advertising efforts or seek alternative, more cost-effective methods to reach their target audiences. Although some solutions exist, there is still room for improvement,” Makun said, noting further that the restrictions considerably hinders access to international platforms that require payments in foreign currencies, particularly dollars.
“This limitation prevents Nigerian businesses from fully leveraging global platforms and expanding their reach beyond the domestic market. While local digital marketing channels like social media, local influencers, search engines, and local websites offer targeted approaches, they may restrict opportunities for tapping into global markets,” he added.
Expressing concerns about the strict forex laws in Nigeria, which make it challenging to access dollars for digital advertising on platforms like social media and search engines, Miriam David, a seasoned digital marketing expert, re-emphasized the significance of digital marketing for businesses in establishing and maintaining their brand presence.
“Startups face considerable amounts of obstacles due to the high cost of obtaining dollars, which impacts their limited budgets and hinders their ability to compete with larger competitors. Even larger firms face budget constraints as the rising dollar rate increases the cost of running ads,” Miriam pointed out.
She suggested supporting local talent to develop advertising platforms within Nigeria as a solution to lower the cost of digital marketing while prioritizing the strengthening of the national currency.
Ebuka Chidube, who leads online marketing for PiggyVest, discussed the negative consequences of the restrictions on dollar spending in Nigeria on the digital marketing sector.
Chidube outlined a range of adverse effects, including limitations on investments, decreased foreign investment, hindered innovation and competitiveness, and the overall impact on digital marketing agencies and professionals.
The restrictions on dollar spending have significantly hampered investments in the digital marketing industry. Local businesses, as well as foreign investors, are deterred from allocating funds to Nigerian digital marketing ventures due to the uncertainties and complexities surrounding currency exchange and international transactions. This lack of investment stifles the growth and development of the sector, impeding its potential for generating revenue and creating employment opportunities.
Furthermore, the restrictions hinder innovation and competitiveness within the digital marketing landscape. With limited access to international platforms and tools, Nigerian marketers face challenges in keeping up with global trends and implementing cutting-edge strategies. This creates a disadvantage for businesses aiming to stay ahead in a rapidly evolving digital environment. The inability to access foreign digital marketing solutions may result in a stagnant industry that struggles to adapt to emerging technologies and consumer preferences.
According to Chidube, the impact of the restrictions also extends beyond individual businesses and professionals to the digital marketing agencies that support them.
“These agencies rely on a thriving and dynamic industry to sustain their operations and provide valuable services to their clients. However, the limitations on naira cards for international transactions pose significant challenges for agencies, making it difficult for them to effectively manage client campaigns and optimize their results. The increased costs and complications associated with alternative payment methods further strain their ability to deliver high-quality services,” he said.
The restrictions also have broader implications for the digital marketing professionals themselves. The limitations on dollar spending restrict their access to educational resources, training programs, and industry events that are often conducted on international platforms. This impedes their professional growth and limits their exposure to new techniques and strategies employed by global experts. Additionally, the restrictions may create a brain drain as skilled professionals seek opportunities in countries with more favorable conditions for their careers.
Chidube continued “Moreover, the limitations on naira cards for international transactions disrupt collaborations between Nigerian businesses and international partners. Joint marketing ventures, influencer collaborations, and cross-border campaigns become more challenging to execute, hindering the potential for mutually beneficial partnerships.” He noted that this further isolates Nigerian businesses from global networks and markets, limiting their ability to expand their customer base and increase their brand visibility on an international scale.
Another concern raised by industry professionals is the potential impact on the digital divide and inclusivity. Digital marketing provides a platform for businesses of all sizes to compete on a level playing field. However, the restrictions on dollar spending exacerbate existing inequalities, as smaller businesses with limited resources face greater difficulties in accessing global advertising platforms and reaching wider audiences. This can lead to a concentration of advertising power among larger corporations, impeding the growth of emerging entrepreneurs and stifling economic diversity.
In light of these challenges, there is a growing call for comprehensive solutions and improvements to address the negative consequences of the restrictions on dollar spending in the digital marketing ecosystem. Stakeholders, including digital marketing professionals, are urging the government to consider alternatives that strike a balance between economic considerations and the need to foster a vibrant and inclusive digital marketing landscape in Nigeria.
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