Advertising stakeholders differ on sector’s second half performance
The first half of 2016 is gone and for many operators in the Integrated Marketing Communications (IMC) sector, it was one with sad memories. The situation was so mainly because of the economic crunch in the country, which impacted negatively on clients’ businesses, leading to attendant cuts in marketing budgets.
Now, as the second half of the year begins, not many stakeholders are optimistic about what it holds for them. However, while a few operators are optimistic of an improved economy, others are skeptical that the sector may still be in crisis.
One of the operators whose views on the second half have not been too positive, is CEO of Noah’s Ark, Lanre Adisa. Though his agency may have made some remarkable growth in 2016, Adisa was however, worried that many other agencies were struggling for survival due to the hard times.
While acknowledging government’s efforts at reviving the economy, he cautioned that the expected transformation the IMC operators want to see may not come be visible this year. “Our clients are groaning, and we are hoping that government will do something to pump some funds into the economy. That might help but we may not see the results as quickly as possible.
“The year is as good as gone. We can only hope that whatever government is able to achieve this year, can be built on next year. I do believe that a lot of agencies are suffering. Just look at the last AAAN AGM, a number of agencies were delisted, it’s not good for our industry, and we are only hoping that the economy would pick up, so that people can do business. But I can’t tell you that it’s going to be a great year, but agencies will have to find a way of surviving the tide,” Adisa added.
But CEO of Media Perspectives, Tayo Oyedeji, has a slightly different views from that of Adisa, as he stressed that the changes were already trickling in, and in a matter of time, the economy would pick up.
“The forex debacle created a lot of challenges for our clients. So when our clients have challenges, those challenges affect us as marketing communications professionals. Sometimes, they source dollars from oversees and also have to repatriate dollars to their head offices. But it is getting better because things are beginning to look up,” Oyedeji said.
The agency boss told MARKETING EDGE that some of the interventions from government are beginning to produce positive results. According to him, this is an indication that the second half of the year holds better promises for the sector than the first. Oyedeji’s sense of hope may have been inspired by the recent complete liberalisation of the forex market by the Central Bank of Nigeria, and the removal of fuel subsidy which seems to have solved the problem of fuel scarcity.
Oyedeji’s optimism for a better sector in the second half was equally shared Chief Operating Officer of 7even Interactive, one of the fast growing agencies in Nigeria, Taiwo Agboola.
Agboola told MARKETING EDGE that the full liberalisation of the forex market which was carried out recently, was a desired step forward by government and a boost to investors, who had hitherto held back their funds.
He explained that now that the Federal Government has liberalized forex, market forces will come into full play and investors will have more confidence in the market.
“And like you know, the more investment we get, the better for the agencies, because we’ll have more companies needing our services,” Agboola said.
Agboola which said that its not been rosy for his firm, which warehouses a number of good accounts including, Smile, Main One, Fidelity bank, GAC Motors, CMA and others, adding, “one of our clients recently told us that it will cut its marketing budget from N180million to about N40million, and we had no choice but to accept.”
Oyedeji said that despite the near insurmountable challenges, IMC was facing, that media owners have enjoyed a better outing than the other arms of the IMC.
For many Out-of-Home operators, the last six months have been agonizing as their businesses experienced a lull, and not many of them are very optimistic about the second half of the year. A major pointer to the gloom in the outdoor industry is the large number of vacant billboards around Lagos and other parts of the country.
Apart from the massive cut in billboard campaign by clients, which swept away a huge chunk of the OOH revenue for 2016, the operators were also left to bemoan their fate when many clients unusually delayed in the annual outdoor campaign approval budget.
Apart from the impact of the economic crunch on the OOH industry, the sector has been further distressed by the overbearing posture of the regulators, especially the Lagos State Signage and Advertisement Agency (LASAA), who has slammed the industry with outrageous fees, and other stringent operational regulations.
Lately and excitedly, LASAA has been making efforts to mend fences with Outdoor Agencies Association of Nigeria (OAAN). Both parties have held a couple of meetings with a view to ironing out their differences. However, in spite of all these seeming positive indicators, some OAAN members still believe that the remaining part of the year may not change their fortunes.