Year of Consolidation for Marketing Communication

Ikechi Odigbo
Ikechi Odigbo

Despite daunting challenges facing the industry, players in the marketing communications proved their mettle in 2019 through consistent business reviews to reposition their businesses. Raheem Akingbolu reports

As practitioners in various sectors of the marketing communications industry wrap up activities in 2019, stakeholders are at crossroads in measuring the growth in the industry for the year.

While it is easy to rate the industry high in terms of innovation membership and creative performance, the financial performance is still abysmally low. According to the President of the Association of Advertising Agencies of Nigeria (AAAN), Ikechi Odigbo, who spoke last week at the 2019 Lagos Advertising and Ideas Festival (LAIF), said advertising agencies are thrived despite the economic challenge in the country.

He said, “The advertising industry from the perspective of AAAN has continued to grow despite the harsh economic weather in the country. As of now, we have about 90 members. About two years ago, we were 70, this simply means that we are having more members.

“Of course, we all know that the economic landscape in the country is very hostile but one thing we are also proud of is the resilience of the agencies to come up with ideas and be able to reposition and expand their outreaches to meet gaps in the market place and also to improve their revenue.”

Again, in a recent interview he granted THISDAY, the President also stated that there has been a significant upsurge in membership in the past couple of years.

“I believe we have exceeded the target; we have 85 or probably close to 90 member agencies made up of full members and associate member agencies. So, in that sense the association or the industry is growing because people are seeing a significant need to have themselves properly registered with the professional association,” he told THISDAY in a recent interview.

He also pointed out that with regards to creative performance, the creative industry has gotten quite a lot of traction in the sense that most of the nation’s agencies won awards and becoming more and more dominant in terms of award wins at the regional level. “We have Nigerian agencies holding their own at the Lorries, Chrystals, at the Epical. So, that shows that the creative quality or the creative performance or the quality of creative works is on the upward trajectory and that is being recognized internationally,” he said.

But in terms of the actual financial performance, especially as it concerns the industry’s contribution to GDP, the share of the advertising pot or the brand building pot appears to be a bit cluttering because of the advertising spend is fragmenting. For instance, investigation carried out among members of the Experiential Marketers Association of Nigeria (EXMAN) shows that in 2019, the biggest budget went into activations.

At the just concluded National Advertising Conference, EXMAN President, Tade Adekunle, alluded to the fact that more than before, brand owners have seen the need to give their businesses more visibility through experiential. According to him, more brands now patronize activation agencies because when they do activations, their brands are meeting the consumers one on one and most of the time these activations happen in the sales field which is different from conventional advertising.

Besides, the year ended on a bad note because government still showed that it cared but little for the industry. The call for constitution of governing board for the Advertising Practitioners Council of Nigeria (APCON) was not heeded by relevant authorities and the Minister of Information, under whom the industry falls, distanced himself from the industry activities throughout the year.

Digital revolution
Another index that shows growth in the industry is in the success that was recorded in 2019 through digital media especially in the Out-of-Home (DOOH) industry. OAAN President, Emmanuel Ajufo said the sector blossomed better in 2019 and redefine the outdoor sector.

He said: “Digital displays started becoming common in the early 2000’s and its numbers have continued to rise. It has the ability to show multiple displays, texts, and videos, and have content changed in seconds, remotely as against the static signs that require materials to be changed manually. “Technological advancements have made it possible for DOOH to synergise and have the same ad shown on mobile phones of location-based audience, indicating the number of the specific audiences that have passed by the platform. Programmatic OOH technologies are also being used to automate media buying and execution for campaigns on connected DOOH inventory and the ease of this process will attract more advertisers who typically would lean towards digital.”

He also pointed out that the smart phone as a device that has bridged the divide between digital and OOH, helped the industry growth in 2019. “However, OOH display unlike TV and radio cannot be switched off at will, it cannot be blocked or skipped like on digital and is relatively cheaper than these other mediums. This is an indication that our platforms are still the most relevant, the most flexible, and the cheapest.

“The digital revolution has expanded the communication potential of OOH and the role it plays in the media mix. The industry started from static campaigns to timely, contextual, and interactive messages, which will opportune media planning the ability to fully integrate digital OOH into a brand’s broader digital strategy. No doubt, as public infrastructure improves so also would DOOH across markets, leading to an exponential increase in the opportunity that this medium offers,” he added.

Perhaps more than the previous years, marketing communications practitioners successfully used 2019 as a year of review of businesses and strategies to prepare ahead of the awaiting business boom across African markets. From advertising to Public Relations, Experiential Marketing to Digital Advertising, sectoral bodies appeared to have seen the need to work together as one to build a robust market base.

At various fora, they admitted that their businesses are under threat, hence the need to refocus and change their approach. The tone was first set at the AAAN 46th Annual General Meeting held in September in Lagos with the theme; “The War Within: Solutions for Survival.” The Guest Speaker at the AGM and Vice Chairman, Troyka Holdings, Mr. Jimi Awosika, gave a lecture on how to contend with various challenges facing advertising business in Nigeria.

Like brothers who have withdrawn into their chambers to tell one another the home truth, Advertising practitioners minced no words when they met at the AGM. It was the moment of truth and the speakers didn’t mind whose ox is gored. Beyond comradery and pumping of Champaign, this year’s AGM was primarily aimed at providing new directions and solutions needed to overcome the challenges and problems confronting the creative industry in Nigeria.

He admitted that the world is now in the post digital age and that all the things that determines and makes an agency very relevant in the pre-digital age have all changed drastically.

He said the fact that the age has changed means that the rules and strategies too must be changed as one cannot keep pouring new wine into an old skin.

He stressed that survival involves gaining relevance consistently and in order to do this effectively in the present post-digital age of the world, the agencies should first redefine and identify what they represent and the exact services they render to clients.

“In this post-digital age, we now have a new audience completely different from those of the dark age. And it’s because this audience all now have free access to many things they couldn’t accessed in the past. So, for an agency to prove to be the one for me, it has to understand my audience and the medium that drives them.

“Being aware of them alone is not enough, an agency has to know how to build affinity. It has to have something the client can tap into. That is also a key factor to becoming relevant in this age.”
Awosika, further urged the advertising agencies to effectively understand how the internet works since their job is to connect people to brands.

New payment structure
Also, in 2019, practitioners across board, pushed for the 120-day credit policy by the multinationals. All sectoral bodies, including the AAAN and Outdoor Advertising Association of Nigeria Practitioners engaged the leadership of the Advertisers Association of Nigeria (ADVAN), with the aim to resolving the issue once and for all.

While sharing his experience of over four decades in the industry at the National Advertising Conference, Chairman of Troyka Group, Biodun Shobanjo, touched on the need for contract payment restructuring, which he said would contribute in no small measure to the revitalisation of the industry. He proposed to the practitioners, which were about 300 delegates, 60 days duration for payment of media contracts by clients as an option of saving the media business.

The proposal is on the background to save the struggling media industry that is facing many challenges, including effects of 2016/17 economic recession, budget cut by clients, inconsistent policies by government and multiple taxations, especially in Outdoor sector.

He didn’t only advocate that interventions are needed in these areas, he added that the debt within the industry between clients, service providers, media owners and advertising agencies must be checkmated.

On adequate regulation within the industry, the senior practitioner, whose presentation addressed contemporary issues in the industry further called on APCON to play its regulatory functions without fear or favour.
“A situation where interlopers are allowed to infiltrate the business as the case in many sectoral sectors must be stopped.

“For instance, where the law prescribes that foreigners acquire not more than 25percent equity in Nigerian advertising companies but this is circumvented by using unscrupulous Nigerians. This, I think must be stopped and reversed.”

Shobanjo, challenged the practitioners to galvanise themselves to save the profession because if “we don’t, the possibility of the profession being endangered is obvious. If you scan your environment and take a historical perspective of where you are coming from, the chances are that you can predict what will happen”, he said.

Explaining how the 60 days payment period can be achieved, Tunji Olugbodi, the CEO of Verdant Zeal who endorsed Shobanjo’s suggestion that the 60 days payment period can also be realised through agreement with the clients.

Olugbodi, who is the Nigeria’s President of the International Advertising Association (IAA), also said that the clients need education and enlightenment to see things from the perspective of the agency and agencies can also understand the financial situation of the clients.
He also suggested engagement with all the stakeholders and operators in the advertising value chain to address the debt challenges.

The home truth
For the second time in six months, the practitioners have admitted that there are dangers ahead if players in the industry fail to take the bull by the horn. Speaking one after the other at the Abuja conference, with the theme; ‘Advertising in the Post Digital Age: The Profession, The Business and Nigeria’s socio-economic Development’, industry leaders, including two former President of the Association of Advertising Agencies of Nigeria (AAAN); Biodun Shobanjo and Lolu Akinwumi and the current President, Kelechi Odigbo, x-rayed the challenges facing the industry and concluded that the time for practitioners to change the gear and put on core innovative cap is now.

Odigbo, who spoke on behalf of AAAN agreed with the keynote speaker at the event, Lolu Akinwumi, that globally, businesses and professions, including advertising industry are facing challenges and more so in Nigeria as a developing country. The AAAN president also alluded to the fact that most of the challenges are related to the profession while others are of general interest.

To be able to compete favourably in today’s market, Odigbo said as agencies, advertising firms must transit from being insular providers of templated ideas to client to becoming culture curators and incubators of ‘mamaput’ ideas that they could also take directly to the marketplace.

“We must reposition to extract more value and reduce client dependency by co-creating with relevant partners, content developers, innovators within the digital ecosystem.

“If we are to increase our relevance we must start to shift from Creativity to innovation. The reason why we are not winning at Cannes is not that we are not creative. It’s just that we are not as innovative as we ought to be. Cannes recognises Innovation,” he stated.

Likely future trend
Meanwhile, contrary to trends in the U.S. or Europe, where the lion’s share of ad budgets is focused on internet and TV marketing, research has shown that between 2018 and 2020 the majority of advertising dollars in Nigeria will be devoted to TV and video promotion. In developed markets internet advertising expenditures are expected to surpass TV, however, in Nigeria TV advertising is and will remain strong in the near future.

The second most popular ad medium in the country is out-of-home, which is also projected to grow in the three years. Internet is ranked third based on advertising spending.