2020: Factors, events that will shape Nigeria’s IMC sector

Akin Adewakun | Lagos


For many in the nation’s integrated marketing communications industry, the outgone Year 2019,  is one that can not  be forgotten in a hurry.  A lot of factors have, without doubt, made the year indelible in the memories of many a stakeholder. For instance, besides the continued decline in fortunes of businesses in the sector, as evidenced in their poor showing, in reports, released in the course of the year, a lot of self-inflicted challenges continued to dog the steps of the sector, throughout the year.

Interestingly, one of such is the lingering issue of a ‘boardless’ Advertising Practitioners Council of Nigeria (APCON), a development, stakeholders  believe has continued to hold  back  the hand of the sector’s clock.

But,  for many, all those seem to have gone with the 2019. Stakeholders are upbeat about the new year, and such optimism is, without doubt, hinged on  some premises and factors, they believe, would shape and reshape the industry, this year.


Early passage of 2020 Budget

For the first time, in a long while, the federal government was able to dot the i’s and cross the t’s of the nation’s fiscal document,  the 2020 budget, on time;  a development, many believe will enable early commencement  of its implementation.

A major challenge that had been the lot of the industry, just like other sectors, in recent past, had been the unnecessary long delay in the passage of the nation’s budget, a development that had always  had its negative trickle- down effects on both corporate and individual economies, in the past few years.

The timely passage of the budget, this time around, analysts believe,  would go a long way in shaping the marketing communications industry;  since  it would allow corporate organisations align their fiscal policies with the nation’s budget, early enough.


Closure of the nation’s  borders

The continued closure of the nation’s land borders remains another major factor that will determine  the  direction the industry’s pendulum would swing, this year.

Not a few practitioners in the industry had expressed  their reservations, last year, about the abrupt and continued closure of the nation’s land borders by the federal government, and the consequences of such action on businesses in the sector.

Interestingly, such fears are not unfounded. For instance, the nation’s manufacturers had echoed the same sentiments, noting that the action might further worsen the already bad situation in the nation’s manufacturing sector.

For instance, in its reaction to the closure, last year, the Manufacturers Association of Nigeria (MAN), through its Director General, Mr. Segun Akadiri, had expressed ‘worry about the unintended negative effects of the closure of the borders on the business activities’ of members of the association.

“Our members who are engaged in the business of import and export to neighbouring countries are unable to do so. As bonafide manufacturers who are beneficiaries of the ECOWAS Trade Liberalisation Scheme (ETLS), our affected  members have a network of inter-connected business chain that make their operations dependent on seamless  cross-border movements. The closure has therefore cut off this flow, and rendered them incapable of leveraging on the inherent economies of scale,” the association had argued.

Unfortunately, since the nation’s real sector constitutes a sizable chunk of clients  of agencies in the IMC industry,  the tendency for practitioners and other stakeholders to catch cold, whenever there is a sneeze from that nation’s real sector, is very high.

In other words, the industry would also have its fair share of the consequences of shutting down the nation’s land borders, since its major clients are writhing in pains, over this.


Hike in VAT

The coming of the new year, no doubt, brings with it the implementation of the new Value Added Tax (VAT) rates of 7.5 percent on luxury items. Prior to this, what was being paid by the Nigerian consumers, as VAT, was 5 percent.  Though meant to shore up revenue for the government, many however believe  the VAT hike would further limit the purchasing power of the average  Nigerian consumer, who is already choking under different financial burdens being imposed by the state. What is simply means is that buying public would need to spend more since manufacturers and service providers are bound to pass the extra 2.5 percent to them.  How the industry reacts to this would go a long way in shaping it in the Year 2020.


The AfCFTA deal

After much dilly dally, Nigeria eventually appended its signature to the African Continental Free Trade Agreement (AfCFTA), last year. Despite the reservations being expressed in some quarters, on the need to effectively manage the process, so as not to achieve the exact opposite of its purpose, not a few however  believe that the Agreement also provides another opportunity for investors, including practitioners in the nation’s IMC to explore new business opportunities within the continent and expand their frontiers. How ready are businesses and agencies in the sector to leverage the prospects and challenges provided by the trade agreement, remains to be seen in the new year.

Though ‘cross-border relationships and opportunities’ are not alien to practitioners in the industry, as evidenced  in different ‘marriages’ and ‘affiliations’ between some indigenous agencies and their foreign counterparts, over the years. It is however believed that the AfCFTA, if well leveraged,  could serve as an opportunity to enhance the dwindling fortunes of the  industry.


The Digital Onslaught

The advent of technology is fast taking its toll on the industry,  with the new media increasingly catching the fancy of  advertisers, in Nigeria. The success or otherwise of many agencies, this year, many argue, would be tied to how well they are able to respond to the digital challenge. John Ajayi, Publisher and Chief Executive Officer of the Marketing Edge Magazine does not see this as a challenge.

“For me the way out for every player in the industry that still wants to remain relevant is to imbibe technology in their processes. It is glaring that digital advertising is fast eating deep into the marketing budget of the traditional media, so any player that wants to be above board must have this in mind,” he added.

Not a few however believe that the response to this ‘digital onslaught’, by practitioners and agencies, will go a long way in shaping the industry in the new year.


The new man at LASAA

Of late, the nation’s outdoor advertising sector had been at the receiving end of  state governments’  unstable and highly unfriendly policies, a development many has contributed to the poor showings of outdoor advertising, of late.

For instance, in Lagos State, until his exit, at the twilight of Year 2019, a major grouse of practitioners in that sub-sector, against the  then  Managing Director of the Lagos State Advertising and Signage  Agency, (LASAA), Mr. Mobolaji Sanusi, had been that of  a ‘strangulating’ policy regime. For instance, mandating operators in the sub-sector to pay for a vacant billboard, in the state, was a major policy that left the practitioners at daggers drawn with the former LASAA boss.  Besides, not a few practitioners believe that it had been a non-level playing; since some powerful forces within the industry seem to be getting choice areas, earlier denied some practitioners, considered ‘cantakerous’.  All eye is on the new LASAA man, Mr. Adedamola Docemo. The general belief, in the industry is that Docemo’s  actions and inactions, in the next few months, would go a long way in determining the direction the  advertising sub-sector would go in Year 2020. Interestingly,  the state outdoor advertising regulatory agency constitutes the flagship agency among its peers in the country.

It is on record that the nation’s outdoor advertising sector has been experiencing a decline in fortune, in recent times. For instance,  since Year 2016, when it attracted a spend of N28.8billion, representing a 35 percent spend of the N91billion of the  total advertising spend for the year, it has been a steady decline in fortune for the once boisterous  sector.

A report, released by Mediafact, revealed that  in 2017, the revenue for the sector dropped from N28.8billion, recorded in the previous year, to N24.6billion; representing a 28 percent of the N88billion of the total ad spend  of that year. This was to drop further in 2018, to N20.7billion, representing 26 percent of the  total N81billion spend, an indication of a sector, going through  trying times.


‘Boardless’ APCON

Another issue that will definitely impact the industry, in the new year remains the issue of the industry’s apex regulatory body, the Advertising Practitioners Council of Nigeria (APCON), which has been without a governing  board, since the dissolution of the existing board, led by Udeme Ufot. The Udeme Ufot-led board was dissolved by the incumbent minister of information, Alhaji Lai Mohammed, in 2015.

Besides inducing the very slow pace of growth in the industry, in the past few years, analysts have  also attributed  the outright disregard for rules and regulations in some quarters, within the industry, to lack of an  existing board for the apex regulatory body.

More worrisome for stakeholders is the fact that the industry has not produced any fellow of the practitioner, in the past few years, since the statutory power to give fellowship to an advertising practitioner resides in the board.

As the industry welcomes the new year, not a few industry analysts believe how well practitioners manage these factors will go a long way in determining the growth trajectories of their businesses this year.

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