Oke: Why there is Stunted Growth in Advertising Sector
A former President of the Association of Adverting Agencies of Nigeria, Mrs. Bunmi Oke, in this interview reviews the state of the nation’s advertising sector, arguing that the current challenges facing the industry is as a result of the poor state of the nation’s economy. Raheem Akingbolu brings the excerpts.
The need for Marketing Communications agencies to merge and form strong synergy that would enable them have strong competitive advantage has always been on the front burner at various fora. Don’t you think the time for merger and acquisition is now, when the industry is facing challenges?
Much as I agree that there are challenges, I don’t want us to single out marketing industry as the only sector being troubled. What we are witnessing now is a global issue that cut across all the sectors. If you look at the history of advertising around the world, the growth is synonymous with the growth of such country’s economy. Advertising is going through that phase where there is a bit of stunted growth because of the recession of the economy. Advertising and marketing communications are offshoots of the brand-building process for a company and a country that is growing. But when a country is stunted in terms of its economic growth, the advertising and marketing communications industry will be stunted. But you know, a stunted growth has solution, you start taking different vitamins.
What is the way out of the current situation?
There will be different solutions but it takes a while. You find out that different segments of the marketing communications industry are being addressed differently. There are some stunted growths that are never reparable. Go and look at the global advertising history, even in the UK and America, the moment the economy is buoyant, you find the marketing communications industry in these countries become buoyant. Up till now we are finding it difficult to find local manufacturing companies that are buoyant with viable products and services. So the ones that are there are still the same ones that were there 10 years ago
So, what you are saying in essence is that what the industry is passing through now is a reflection of the bigger national economy?
Yes, it is. Just like anywhere, the industry is a reflection of the economy. If the economy is depressed, the industry is going to be challenged. In fact it’s almost stagnated due to the advent of COVID-19 and that is why it appears there is so much inactivity. I agree with you that as time goes on, people are going to come together to find out what options are available to get the industry going. You know Nigeria is in a recession now and there is no way we can come out with flamboyant campaigns because the consumer is also challenged. We can’t be delusional about it. So what I’m saying in essence is that the industry is evolving, it’s moving to new platform. Our platforms are evolving. So let’s understand what is going on. Let’s stop misrepresenting it. We need to watch and observe. Hopefully both the private and public sectors should look at new areas to give new impetus to business. So just the same way the economy is evolving, the industry is also evolving. It’s also going through its own metamorphosis, and there will be new players emerging, new mergers emerging, new platforms and new opportunities emerging, and there will be those that will go with the wind.
As stated earlier, experts have consistently recommended mergers and acquisition as a way of bringing the industry back to its feet. Is M&A feasible in Nigeria’s ad industry, especially now that COVID-19 and other challenges are killing businesses?
No doubt, the nation’s advertising industry is going through rough patches, especially with the advent of the COVID 19 pandemic and the not-so-bright fortunes of the nation’s crude oil in the global market. Now to answer your question; it’s possible. There had been collaboration in the past. I believe when it gets to a point when people realise that it is possible to collaborate with people of complementary services, they’ll have no choice than to do that. Don’t forget everything in life is evolving
What form do you think the M&A approach can take in Nigeria to run it successfully?
Don’t forget some of today’s big agencies collaborated to come together. There were mergers of different interests, maybe in a sector, like the media. Definitely with digital technology, it’s going to get to a point where new skills are required in some agencies’ where a lot of content management is required, where a lot of new digital platforms-created communication skills would be required. Some of the agencies that we have today came out of necessity. Some came out of the need to just survive. I think that very soon, for our industry to remain buoyant and lively, as well as attractive to good talent, there is the need for agencies to absorb and merge together and also bring in very brilliant, experience and inexperience hands to move the industry forward.