Nwosu: AfCFTA Will Drive Competition in Advertising Industry
A former President of the Association of Advertising Agencies of Nigeria, Kelechi Nwosu, in this interview speaks on the need for creative agencies to be more savvy savvier in their approach to idea conceptualisation and brand building. Raheem Akingbolu brings the excerpts.
Just when the business communities, including creative agencies were heaving a sigh of relief that they had gotten over the COVID-19 crisis, the second wave resurfaced and began to unsettle the market. In view of this, can you comment on the developments in the first quarter of this year so far?
Looking back at what experienced in the last one year, I see slow and modest recovery in the months ahead. Brands are eager to get back to production and selling. The consensus seems to be that economic recovery is far more important than a lockdown with limited benefits. Even though vaccination may or may not happen, Nigerian brands have understood and are still learning how to deliver products safely to consumers. One thing is important and that is the need for businesses to wake up and realise that demand pattern is changing in favour of sectors that are critical, especially in Telco’s/ISPs: food and Fmcgs; Pharma and Entertainment .etc.
Within and outside the creative industry, how would you describe last year?
It was a tough year given that COVID-19 dropped Nigeria into a recession. QTR 2 (-6%) QTR 3(-3%). Clients cut back on marketing and marketing communication budgets and that clearly adversely affected the IMC industry. We (IMC) support demand and without production and supply, why would clients pursue demand. Except for a few advertisers with an eye on the long-term value of brands that maintained their advertising even if modestly, most other advertisers quickly cut their marketing communication spend
Now going forward, what is your projection for 2021?
The World Bank and others predicted a recovery and growth of two per cent for Nigeria. There is also the resilience and tenacity of many brands to brave the conditions and see how to recover from last year . Those are motivating factors that suggest that the year will have a modest recovery for the IMC sector. Note though that the recovery will be skewed positively towards Agencies that are supporting brands in the growing sectors, which I have mentioned above: telco, fintech, E-commerce; health and pharma; food and processing and so on.
Looking beyond Nigeria, how has the pandemic affected the African advertising?
I cannot really speak on African advertising and the pandemic because I have not seen any studied figures . But the trends in Nigeria , South Africa and the world will not be different .
Advertising supports demand and where there was little or no demand, the industry and the players suffered loss of revenue to varying degrees. The rate of loss of revenue will be correlated to the diversity of the account portfolio of the Agencies all over Africa. We must also realise that Africa is underdeveloped and generally under advertised.
Check out the article by Ronald Redmond Nigeria Advertising Sector Path to Growth (May 20. 2020 where he states that Nigeria Advertising is underperforming for both macro and sectoral reasons
He says: that even though our GDP $397 billion is currently the largest economy in Sub Saharan Africa followed closely by South Africa GDP $366 billion, the South African advertising sector is $2.6 billion (7% of GDP) and this is almost six times the size of the Nigerian advertising sector $450 million (1% of GDP). AfCFTA is a factor that will drive competition: adversely and positively for the industry. We are still studying the possible effects as it has just started this year.
What would it take to revive the industry, despite the odds?
First, recognition that before COVID-19, we already had structural /sector problems and seek to fix these. These include: Empaneling of the APCON council so that the regulation and leadership role of APCON is enhanced. In particular, it will allow Reforms already formulated for the industry to take off and that should cascade to better professionalism and value for the players in the industry. Another one is that HASG (Heads of Sectoral Groups ) should continue to pressure the federal government on the above . Also, the IMC industry should be concerned about macroeconomic policies and work with other sectors to influence and stabilise government policies. Adverse policies on the advertisers especially the FMCGs tend to have a huge impact on the IMC industry. The above is also an opportunity to demonstrate our contribution to the GDP and cyclical flow of goods in the economy. The role of advertising is often underplayed whereas we are responsible for providing consumer awareness /education and choice; we instigate competition which is good for the consumers and for the mass production and mass employment. We help with behavior change for tangible and intangible goods. You cannot literally have a capitalist or even socialist economy without advertising. The third point is that IMC practitioners also need to design and create products and platforms for Clients and for themselves. Our country is in dire need of creativity and productivity; it cannot be left to advertisers alone and agency should utilise the skills they have built to create these. For us at TBWA\CONCEPT, the Spirit of LAGOS Behavior change campaign, ( 2012-2014) Proudly Made in Aba( 2017 & 2017) are great examples. And finally, government in recognition of the above roles, should consider a stimulus package for the industry. We do not want any free money, but that they should enforce the existing APCON regulations that only Recognized and licensed firms should do government communications If the federal government does the above at all levels of government ( federal/state/Local) it will stimulate huge growth for our industry .
It is believed in some quarters that experiential marketing sub-sector suffered more than core advertising, PR and others during the pandemic. Why is the so?
Experiential marketing unfortunately, was hit more because of the social distancing and lockdown. Core advertising and PR were also affected by the lockdown, but the difference was that the services for some Clients could be rendered remotely unlike services for experiential.
Your agency, TBWA has been in the forefront of helping SMEs. Can you share this project with us?
SME SHOP is our deliberate response to the SME market. Realising that the sector was critical to the growth in Nigeria, we studied the market four years ago and launched our offering known as the SME SHOP. Clearly, we still have a lot to learn about SMEs and their communication needs, but we have however had modest successes in capacity training seven consulting for SMEs in branding; business growth; how to get loans and set up financial processes. We have been to effect the above working with SAWUBONA , an SME business consultant and other collaborators. For instance, typical challenges of SMEs were exacerbated by Covid-19. We at TBWA\CONCEPT, in partnership with Ford Foundation, have designed and now implementing a programmes SME SHIFT which answers some of these challenges. The programme has free training videos in modules with experienced and deep facilitators speaking on different need areas which we learnt via a pre-programme research . Mrs. Nike Ogunlesi of RUFF’N” TUMBLE; Ms. Uloma Ike of BoI; Ranti Atunwa of TBWA\CONCEPT and six other prominent facilitators are part of the faculty. Check it out on smeshop.ng. So far, we have trained over 1000 businesses online, offering free business clinics to 50 SMES, majorly female owned.
What has been the impact of the Aba project? What were the contribution of the government?
Proudly Made—in-Aba (PMIA) developed and supported by Ford FOUNDATION over three years ago has been a success. It attracted businesses to the SMEs in ABA and generated enquiries that led to revenue increases. The Leather Sector and the textile sector reported N1.6 billion Naira direct sales during the campaign period in 2018 . An estimated $100,000 worth of free, positive publicity was generated for brand Aba.
There was a HACKATHON sponsored by Ford FOUNDATION that resulted from the first phase of PMIA and over $100,000 was given as prizes to the winners who were selected based on how they would use technology to build brands out of Aba. Clintonel, a second prize winner has successfully started a CAD supported, manufacturing Lab in Aba. We have also consulted for a few Aba based brands in fashion and leather. We were minimally supported by the Abia State Government via logistics and information) but we are yet to get their full support to help the government strategically build some strong brands in fashion, textile, leather, and fabrication out of Aba.