Total Pageviews

Friday, June 28, 2013

FUTURE OF NIGERIAN ADVERTISING MARKET: 2014-2015




      As we are mid way into the present tenure of the current political office holders, and approaching 2015 election the mouth of major advertising practitioners in Nigeria has started to salivate. Like in most countries where elections hold at an interval, the advertising industry in Nigeria is planning on how to maximize the billions of Naira that will be spend by political office holders/seekers during the period. Already political maneuverings have become intense, a major opposition political party with the power to rival the ruling party (Kobo for Kobo) is about to be registered. Like in the US the prospect of having two near equal major political parties is good for the advertising industry, as it will means piece competition in placing of advert not like before when the weaker parties cannot march what PDP (the ruling party) normally spend on advert. During the 2011 elections, Billions of Naira were spent on advert comprising the entire advertising sector such as in electronic, print media, and bill board. Looking at the changing dynamics of Nigerian politics and the growth in the Nigerian economy it should be expected that the amount to be generated from the next general election will be higher than that of 2011; the same way that spending on 2011 elections is higher than that of 2007. Unless a law is passed to reduce the amount an individual or corporations can donate to an election campaign, which I do not see one coming before the next general election, little will change in the way of this forecast. Thus, the prospect of borrowing everything (money) from the last US election is quite real, add to this Nigeria’s elite hidden corrupt money that is finding it ways to election funding. Already political adverts and advertorials have started pouring in, even though it is nearly two years to the general election; in the forms of rejoinders, attacks, and parties’ jingles from one group against the others.
       As one of the important dynamics that will determine the future direction of this industry, there is currently a squabble going on between the major players in the industry. One of the main issues at stake is that of allowing foreign advertising agencies to invest their capital in the Nigerian advertising industry. Remember that the outgoing board of advertising practitioners’ council of Nigeria (APCON) has instituted a law banning foreign advertising agencies from owning more than 25% stake in any advertising agency in the country. This single move no matter on whose side you are will have a profound effect on the future direction of the industry. There are those that belief the move will help protect local advertising industry by protecting it from the predatory practices of global advert agencies, thereby, allowing it to grow to a level where it will compete with bigger global brands not only on Nigerian soil but on the global scene. The issue of foreign cultures importation that it is alleged the foreign participation beyond 25% will cause is another point advanced by the advocate of 25% limit, in addition to job exportation by foreign agencies back to their countries. But, those against the 25% limit argue that liberalization policies of the current regime goes against the limit; taking into cognizance the current derive to woo foreign direct investment into the country to speed up the development of the nation’s economy. In addition to that it is the view held by some observers of the industry that the participation of foreign advert agencies will increase competition in the industry and prevent the creation of a scenario where few local agencies develop into oligopolistic agencies that collude against the interest of other stakeholders in the industry.
   Recently, the federal government has intervened in the matter with the view to settle this row. Government has already reconstituted the board of APCON as well as appointing new interim chairman. But, we wait to see how the new board will steer the course of the body in the interest of all stakeholders in the industry and for the rapid development of the Nigerian advertising market.  But, if my advice is to be sought on this controversial issue of 25% limit I will suggest the middle course between the two opposing camps by recommending limiting foreign participation to 39%. This to me make sense because for one it will still leave the advert market in the hand of indigenous companies while on the other hand increasing foreign participation to the extent that will make them (foreign agencies) to  make meaningful contributions to the development of the industry. The good thing with globalisation is that it brings with it world recognize parameters to bear on a local industry. Our local industry still needs the creativity, capital, and managerial know how of the big global advertising companies. But, while still desirous of benefitting from these advantages we still have to be wary of some of these predatory practices of the global companies that may result in harming our national interest. Dumping of all sort of advertising on the local market by foreign agency is still very possible; but effective regulation by bodies such as APCON, BON, etc will go along way in bringing-in our foreign partners to their senses.
     As the global marketing communication industry adopt the latest cutting edge technology in order to make it operations more efficient and satisfy the changing taste of consumers worldwide, Nigerian chapter is bound to follow suit spending billions of Naira in the years to come in the purchase of some of the best technology in the market money can buy. Already new satellite TVs are coming on stream together with new TV and radio stations. The increasing adaptation of the internet as a means of advertising has awoken the Nigerian advert industry on the need to quickly catch up with the global practice. Already numerous Nigerian corporate agencies are now allocating part of their annual advert budget on internet sites such as Yahoo, Facebook, Google, LinkedIn etc., the trend is to reach the largest target audience possible at the most efficient cost possible. Since the advent of democracy the Nigerian advert industry has witnessed a monumental growth that has given hope to stakeholders in the industry; today the industry is a billion Dollar market. This will translate into many positives for the Nigerian economy among which are increasing job opportunities for teeming unemployed graduates coming out of our tertiary institutions, more tax for the Nigerian government as the revenue base of the industry blossom, more investment opportunities for both local and international investors, increasing maturization of the local industry to enable it compete in the global market, and development of our local talent inline with the global best practices. Hence, to me the need to look at the issue of 25% limit more critically, as it will look like we are different from the rest of the market in the world. But, by this I am not saying that the limit should be scrap totally. Rather, it should be increased to something like 39% as I suggested earlier.
    But, the year 2014 through 2015 is not only mean for the domination of political and public sector sponsor adverts over others, as the first paragraph of this piece may have led one to believe. The private sector of the Nigerian economy has important role to play during the period, after all major private sector players have been contributing billions of naira to campaign trains of political office holders/seekers. As the economy continue to grow so doe’s major companies’ effort to boost their image through branding. Already major brands in the country such as Dangote, First Bank, MTN, Glo, BUA, GTBank have been spending billions of Naira in order to increase the strength of their brand, what branding experts called Brand equity. One should not also rule out surprises during the period as relatively less well known brands such as Shoprite, TATA Nigeria, Dantata & Sawoe, are busy spending money here and there in order to increase their presence in the whole market. Despite all these the Nigerian advertising industry is still at developing stage, as it will take years before it will reach the level of maturity we are seeing in advanced markets such US, France and Japan. The total annual advert budget for the whole economy combine is still meager compare to South Africa, here on the African continent. In term of creative content in our advertising we still lag behind what is found in the Arab world, whose creative content does not even reach the level found in advanced countries. The Nigerian market is still being dominated by some few big local advert agencies (with monopolistic tendencies) who do not like new entrance into the business whether they are local or international; thus, for the interest of development of the industry there is need for fair play, healthy competition and effective regulations.

3 comments:

  1. it is too good from other post really appreciate all recmond all readers comments on post

    eco 372 final exam


    http://eco372finalexam.weebly.com/

    ReplyDelete
  2. NIGERIA CUSTOM AUCTION CARS FOR SALE AT A CHEAP AND AFFORDABLE PRICES CONTACT CUSTOM PASTOR JOHN OBINNA ON 08131188267 THANKS.

    ReplyDelete
  3. This is a great inspiring article.I am pretty much pleased with your good work.You put really very helpful information...
    free classifieds ads Pakistan post free classifieds Pakistan

    ReplyDelete