How Telecoms Sector Topped Advertisers’ 10-year List in Nigeria

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Raheem Akingbolu reviews the latest edition of mediafacts Nigeria: 10-Year Trend Review, noting that players in the telecommunications sector were the highest spenders in the years under review

The Communications & Telecommunications sector has been declared as the consistent highest advertising spender in Nigeria in the last 10 years. The declaration was made by mediaReach OMD in its publication, mediafacts Nigeria: 10-Year Trend Review (2006-2005). The compendium contains a longitudinal review and trend analyses of year-on-year, mediafacts, with key insights into the annual statistics performance and dynamics of key players on critical indices of the media, advertising and marketing industry in Nigeria.

In 2015, the sector spent N16.7bn on advertising to lead the pack. The report placed the Personal Paid Advertisers, having spent N12.2bn, second behind Communications & Telecommunications. Between 2006 and 2009, Banking & Finance was consistent in taking the second position after the Communications and Telecoms sector. However, the trend changed in 2010 when the former had N3.5bn ad spend while Personal Paid Advertisers spent N7.8bn.

Similarly, Lager (Beer) had oscillated between the third and fourth position. While it spent N4.8bn on advertising in 2014; the figure dropped to N4.6bn in 2015. Paid Advertisers had experienced a higher growth rate in the past 10 years, with a compound annual growth rate of about 26% followed by Educational Imparting Knowledge & Skills category with a CAGR of 21%.

Ad income for newspapers

Advertising income for newspapers in Nigeria during the review period hit N143.1bn between 2006 and December 2015, revealing a wavy pattern that reached its peak in 2014 with N25bn; and declined to 23.7bn at the end of 2015.

According to a special edition of mediafacts, the N4.4bn advert income in 2006 moved up to N4.8bn and N4.9bn in 2007 and 2008; respectively. The newspapers got N15.8bn in 2009 and N16.5bn in 2010.

The figure declined to N15.4bn in 2011 and slipped further to N9.0bn in 2012. The downward slope however changed in 2013 with an advert income of N18.5bn and rose to its peak in 2014, hitting N25.8bn. The figure went down by N2.1bn in 2015 when the newspapers earned N23.7bn.

ATL Ad Expenditure

MediaReach OMD explained that the newspapers mostly attracted their highest advert patronage in the second and third quarters, with the exception of 2013 and 2014 which had their highest spending in the fourth quarters of the year.

In terms of regional spending in the last ten years, the split is between Lagos and North, with Lagos constantly attracting the dominant share of advert spending year-after-year. The product analysis however shows that Glo has consistently dominated the list of press advertisers, rising steadily in the last three years to tie with Guaranty Trust Bank ahead of others while MTN currently occupies the third position.

In terms of advertising expenditure across board, the TV medium consistently enjoyed the lion share of advert budget over the years. It was followed by the Out-of-Home (OOH) medium except for 2014 and 2015, when the print medium followed the leading TV medium. The newspapers had however experienced the highest growth rate in terms of advert spends especially in the last three years.

For total advertising expenditure, the year 2013 enjoyed the highest spending with N103.8bn, representing a marginal increase over year 2011 spending of N102.8bn. There was a decline in 2014 as compared to the high spending in 2013.

Television Trends

Historically, TV spends in the last 10 years rose gradually from N15bn in 2006, it reached its peak in 2012 (N49.4bn) and has currently dropped to N39bn in 2015.

In terms of TV spend in the last decade, Communications and Telecommunications towered above others with occasional interruption by Gaming and Entertainment which mostly occupied the second position in the relative trend review. In TV Advertising spend, there was a considerable level of growth in the categories section, topping the list on growth basis was the Noodles/Pasta category as it recorded a CAGR of 28% and was followed closely by the Skin Cleansing category with a CAGR of 24% and then jointly following was the Nutritional Drink, Milk and Dairy products and Dental Care products with each having a CAGR of 20%.

From its modest figure of N5.7bn in 2006, Radio spends increased haphazardly in the last 10 years reaching its peak in 2012 and wobbled through the years to settle at N15.1bn currently. In the last 10 years, Radio attracted the highest media spend in the second and third quarters of the year mostly. Lagos grew and sustained its lead position on Radio spend in the last decade.

FMCG influence

Among the top 20 spender categories on Radio, Communications and Telecommunications consistently dominated other categories. However, in terms of the compound annual growth rate, cocoa beverage topped the chart list at 23% followed by Noodles/Pasta and soft drinks at 21% and 20% respectively over the last 10 years.

Three telecom radio advertisers, MTN, Airtel and Etisalat, competed interchangeably for the top 3 positions above others during the period under review. As regards growth over time for radio advertisers, Cadbury topped the list of growing advertisers with 20% with DeUnited Foods and Etisalat following closely with each having 17% CAGR.

The Outdoor media spend enjoyed its peak between 2010 and 2011 but declined slightly from N20.5bn in 2014 to N20.1bn in 2015 apparently due to increasing strict government regulations and tariff restrictions. The trend analysis revealed that the OOH maintained its peak patronage in the second and third quarters like the other media. Lagos consistently attracted the bulk of the Outdoor spend while West struggles in the second position with other regions.
Among the Top 15 product categories, Communication & Telecoms consistently led the pack beating Lager Beer which began its growth trend in 2010 to second position currently. The top spenders that have shown positive growth over the last 10 years are Dental Care 28%, Cocoa Beverages 25% and Lager (beer) 22%.

Globacom competed fiercely with MTN ahead of others to dominate the scene for most of the period. However, it was outstripped by MTN in 2010 and 2013; while Airtel currently strives in a close tie with MTN. With a positive CAGR of 38%, Etisalat topped the list of growing spenders, with Nigerian Breweries and Cadbury following with 37% and 24% respectively.

Managing Director and Chief Executive Officer, mediaReach OMD, Mr. Tolu Ogunkoya, said: “Nigeria’s media is one of the most dynamic in Africa. Each of the 36 states has at least a TV station and one radio. There are hundreds of radio stations and terrestrial TV stations, as well as cable and direct-to-home satellite offerings.”