This is not the best time for Nigeria’s marketing agencies. Last two years have really been tough for the industry that generates communication strategies and approaches employed to improve the growth of companies.
The operators tone when a call is put across to them clearly indicates that things are not really rosy as some of them owe salaries, landlords and other bills. Clients are equally putting them in tight corner with debts.
As INEC releases last Saturday’s election results, many of the agencies’ CEOs are hoping for a better manager of the mono-economy waiting to be diversified.
In the last three years, companies including multinationals that the agencies rely on for businesses have increasingly reduced their marketing communication budgets due to poor economic performance and unfavourable policies by government.
Ehi Braimah, CEO of Neo Media and Marketing agency based in Lagos described 2018 as a difficult year for business owners and entrepreneurs. This difficulty manifested in low spending power of consumers, government regulations which include excise duty affecting clients, stiff competition and the fight for relevance, difficulty in sourcing foreign exchange and reduced FDIs. This may not change in 2019.
Early last year, the agencies had hoped to leverage spin-off businesses that will emanate from both W/Cup hosted in Russia in June and pre-election 2019 campaigns by political parties.
But even after Nigeria exited recession mid last year, Innocent Oboh of Dijo Communication late last year told BusinessDay that recession is still biting as there has not been substantial increase in marketing communication budget.
According to him, this is against anticipations at the beginning of 2018 based on some activities such as World Cup, pre-election and come-back from recession year. Referring to 2018, he said “This is one of the years there was World Cup and there was not much activities and events heralding the tournament”, he said.
Pre-election campaign did not favour the marketing communication agencies as most political parties employed the services of below-the-line firms for printing of materials. The print media was worst hit as the politicians engaged in more street campaigns.
John Ehiguese, the CEO of MediaCraft, said typically, an election year should represent a season of boom for IMC agencies, but “unfortunately, that does not appear to be the case this time around.
He attributed this to poor campaign funding, favourable disposition to foreign agencies by political parties and engagement of mostly unregistered but non communication firms for printing of campaign materials.
“Some of the major political parties seem to be more comfortable contracting the services of foreign communication firms to run their campaigns. This is bad judgement, because there is no way such firms can understand the political terrain, and be able to deliver, like Nigerians would. We do have the expertise and competences here in the country. And even where we do not, several of our agencies have foreign affiliations and partnerships that they can tap into, to bridge the gap. In any case, how can local professionals raise their game, and grow, if you do not give them a chance?” Ehiguese who is the president of Public Relations Consultants Association asked.
Unfortunately, months ahead do not appear to be bright for the agencies as their clients are still hard hit by unfavourable environment. Many of them suspended product promotions and brand campaigns because of the elections.
The agencies believed that if President Muhammadu Buhari eventually wins the presidential election, the economic situation may remain the same. But if Abubakar Atiku, his main opposition takes over power, it may take some time before his policies will begin to impact on the economy.
The tough situation, according analysts really calls for new survival thinking among the agencies. This includes mergers and acquisitions, diversification and creation of new businesses and relocation of offices to better but low rent areas.
As Lanre Adisa of Noah’s Ark put it recently, the industry definitely needs to rethink its business models. “We need to open our minds to unlearning some old things while we embrace new thinking”
Daniel Obi
