The top three contributors to marketing communication spending were cable TV, digital media, and creative and content production.
Nigeria's total marketing and communication spending reached N605.2 billion in 2023, says a new report commissioned by the Advertising Regulatory Council of Nigeria (ARCON).
Carried out by PWC, the report shows that the Nigerian marketing and communications industry has been on an upward trajectory with a compound annual growth rate (CAGR) of 18.7 per cent in six years, from N216 billion in 2018 to 2023.
The report, which shows the advertising sector's contribution to Nigeria's Gross Domestic Product (GDP), its value, and the multiplier effect, was presented to concerned parties on Tuesday, during a media briefing in Lagos.
The top three contributors to marketing communication spending were cable TV (25.5 per cent), digital media (18.5 per cent), and creative and content production (13.4 per cent).
In his remarks, ARCON Director General, Olalekan Fadolapo, underscored the need to quantify the industry's size and impact as an economic enabler, noting that the report lays the foundation to assess the advertising space and its multiplier effect on the Nigerian economy.
Mr Fadolapo added that the findings of the report underscore the industry's paramount role as a catalyst for consumer demand, business expansion, employment, and innovation across sectors.
Multiplier effects, projections
Presenting findings from the study, the Chairperson of the Multiplier StudyARCON, PWC, multiplier effect noted that the marketing communications sector has emerged as a "formidable economic powerhouse."
Mr Adelusi noted that the study estimates that for every N1 spent on marketing communications in Nigeria, "the nation's GDP increases by a N16.5 - a multiplier effect that highlights the industry's substantial value contribution."
Speaking on cable TV, digital media, and creative and content production being the top three contributors, Mr Adelusi explained that the proliferation of cable TV, driven by its diverse content offerings and affordable package options, has captivated a wide consumer base.
"Additionally, the surge in digital media spend, fueled by increased internet and mobile penetration, as well as the rise of social media and video-on-demand platforms, has reshaped the marketing landscape," he said.
The Chairperson of the National Advertising Conference, Tunji Adeyinka, in his remarks, noted that the 2022 ARCON conference highlighted a gap in understanding the industry's GDP contribution, "prompting the decision to engage PwC for a credible assessment."
Mr Adeyinka added that the report examined two key aspects: the advertising industry's direct monetary contribution to GDP and its multiplier effect - the amplified impact of advertising investment on overall economic output.
Projections
According to Mr Adelusi, the recorded trajectory in the marketing industry is projected to continue, with spending expected to reach N893 billion by 2028, contributing a significant 1.08 per cent to Nigeria's GDP, up from 0.7 per cent in 2023.
In Africa, advertising spending is also projected to grow by a CAGR of 2.8 per cent between 2023 and 2027 from $10.3 billion in 2023 to $11.8 billion in 2027.
According to PWC, the projected growth is linked to the rising availability of mobile technology and internet access.
PwC Global and Entertainment Media Outlook 2023 Report also projected that global advertising revenue will increase from $763.7 billion in 2022 to $952.6 billion by 2027 at a CAGR of 4.5 per cent.
Highlighting the top countries with the highest advertising spending in 2022, PwC estimates that the US will continue to dominate the advertising market globally with spending projected to reach $692 billion by 2027 at a CAGR of 2.6 per cent, while China's will reach $305 billion at a CAGR of 6.1 per cent.
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The study also highlighted the growing influence of creative and content production, which recorded a CAGR of 15.8 per cent between 2018 and 2023 driven by the popularity of smartphones, social media engagement, and the appeal of real-time online content.
"The investment by video-on-demand platforms like Netflix and Amazon Prime in Nigerian productions, particularly in the thriving Nollywood industry, has further bolstered this segment," Mr Adelusi added.
To accelerate the industry's growth and development, the study recommends creating specific, measurable goals for the sector's GDP contribution, and establishing a Joint Industry Body (JIB) for operational coordination among broadcasters, agencies, and advertisers.
It also suggested a "global" approach that combines international best practices with local initiatives and utilises analytics tools to track spending patterns and consumer behaviour.
