Nigerian advertising industry declines by N15billion since 2013
In the last four years, Nigerian businesses have been spending less and less on advertising and this has had an adverse effect on the fortunes of the advertising industry which has seen about N15billion or 14.5 percent of its total value wiped off since 2013.
According to the 2017 Mediafacts released recently, Nigeria’s total spend on Above-The-Line campaigns stood at N103billion, but last years, only N88billion was allocated for ATL activities, which reflected a loss of about N15billion.
The massive loss in value has been blamed on economic challenges and difficult operating environment which has discouraged productivity and investment growth. Analysts have also attributed it to rise in technology and other alternative advertising channels like activation and influencer marketing which now take a he chunk of the annual advertising budget
The MediaFact report which is an annual publication of MediaReach OMD, showed that the total advertising expenditure in the country declined by 3.3 percent in 2017 compared to N91 billion in 2016. The decline was of course blamed on the recession that ended last year.
Also, the recession caused 2016 total advertising expenditure to decline by 7 percent of N91 billion compared to N97.9 billion in 2015. Meanwhile, industry watchers have indicated that many brands have yet to increase their marketing budget after the country’s exit from recession and as such most advertising and media agencies are struggling for survival.
In 2017, TV advertisement stood at N33.5 billion, Radio – N12.4 billion, Outdoor – N24.6 billion, Press – N17.6 billion while in 2016 the figure stood at N31.5 billion, N12.6 billion, N28.8 billion and N18.1 billion respectively.
The decline has been on since 2016. Recall in 2015, TV advertisement stood at N39 billion, Radio at N15.1 billion, Outdoor at N20.1billion and press at N23.7 billion. The growth industry watchers attributed to the general election that year and the series of political campaigns that were launched. However, MediaFact report shows that 2013 had tremendous growth of N103.8 billion as total Above-The-Line (ATL) advertising spends compared to N97.9 billion in 2015 and N93 billion in 2014.
A comparative analysis of 2016 and 2017 in terms of growth in ATL advertising expenditure in the media shows that TV grew by 6.4% while others declined. Radio declined by -1.7%, Outdoor by -14.8%, and Press by -2.9%.
In the same vein, in terms of reach of media conducted across the country in 2017, Radio had the highest reach. It led with 80 percent ahead of TV at 76 percent, Outdoor/Posters 63 percent, Internet 41 percent, Magazine 27 percent and Newspaper 24 percent.
In addition, fourth quarter of 2017 had the highest spend at N23.3 billion with 26 percent of the total spend, third quarter followed with N22.9 billion, 1st quarter N21 billion and 2nd quarter N20.8 billion.
The report stated that GSM service providers topped the 20 categories that contributed 74% to the total ad spend. “Top 20 categories contribute 74% of the total spend. GSM Service Providers continue to top the chart year in year out, with overall total spend of 15.4billion Naira 17% of total ATL advertising spend in 2017.”
The top 20 categories are: GSM Service Provider (N15.4 billion), Personal Paid (N7.0 billion), Corporate (N6.2 billion), Banking and Finance (N6.1 billion), Cable TV (N3.4 billion), Larger (Beer)-N3.2 billion, Soft Drinks (N3.1 billion), Noodles (N2.5 billion), Online Mall (N2.2 billion), Milk and Dairy (N2.1 billion), Handsets (N2.1 billion), Cocoa Beverages (N2.0 billion),Seasonings (N1.9 billion), Malt ((N1.7 billion), Spirits (N1.4 billion), Public Services (N1.1billion), Nutritional Drinks Ltd (N1.1 billion); Gaming, Entertainment, Leisure & Tourism (N1.0 billion); Education Imparting knowledge and skill (N1.0 billion), and Cooking Oils and fats (N1.0 billion).
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