PwC’s N893bn 2028 Nigeria advertising sector value projection excites investors

Cynthia Ezekwe

A recent report by PricewaterhouseCoopers (PwC) has revealed a bullish outlook for Nigeria’s advertising industry, with its value  at N605.2 billion in 2023, and projections indicating a massive leap to N893bn by 2028.

The report tagged, “Economic Contribution of the Marketing Communications Industry to the Nigerian Economy,” noted that every N1 spent on marketing communication in Nigeria has a Gross Domestic Product (GDP) multiplier effect of N16.50 kobo.

According to the multinational professional services firm, the total expenditure on marketing communications soared to  N605.2 billion in 2023, having grown at a compound annual growth rate (CAGR) of 18.7 percent over the past six years, from N216 billion in 2018.

“This trajectory 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,’’ the report noted.

The report, which was commissioned by the Advertising Regulatory Council of Nigeria (ARCON) and funded by various associations in the industry, including the Experiential Marketers Association of Nigeria (EXMAN), the Association of Advertising Agencies of Nigeria (AAAN), the Outdoor Advertising Agencies of Nigeria (OAAN), the Media Independent Practitioners Association of Nigeria (MIPAN) and the Broadcasting Organisation of Nigeria, (BON), was  carried out by PricewaterhouseCoopers (PwC) and presented to stakeholders at  media briefing in Lagos.

Speaking at the presentation of the report, Olalekan Fadolapo, the ARCON director general, expressed his delight over the industry’s recent strides, noting that the findings of the report underscored the industry’s paramount role as a catalyst for consumer demand, business expansion, employment and innovation across various sectors of the Nigerian economy.

Fadolapo disclosed several initiatives that the regulatory body has undertaken to advance the growth of the industry, which include the audience measurement and the GDP Multiplier effect report. ARCON is also set to hold an event on the audacious rebrand “Nigeria Project” amongst others that stemmed from the resolutions contained in the communique of the National Advertising Conference (NCF) in 2022.

Tunji Adeyinka, chairman of the National Advertising Conference (NCF) noted that the  report examined the advertising industry’s direct monetary contribution to the GDP and its multiplier effect, which is the amplified impact of advertising investment on overall economic output.

On his part,  Femi Adelusi, chairman of the Multiplier Study Committee, explained   the impact of Nigeria’s marketing communications industry on the nation’s economic growth, stating, “The marketing communications sector has emerged as a formidable economic powerhouse. The study estimates that for every N1 spent on marketing communications in Nigeria, the nation’s GDP increases by a staggering N16.5 – a multiplier effect that highlights the industry’s substantial value contribution.”

Breaking down  the industry’s segments, Adelusi highlighted that the top three contributors to marketing communication spending in Nigeria between 2018 and 2023 were cable TV (25.5 per cent), digital media (18.5 per cent), and creative & content production (13.4 per cent).

“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.

Adelusi noted that  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.

However, the report noted that challenges such as economic pressures, regulatory reforms, and competition from global players, are challenges constraining the growth of the industry, noting that the sector can leverage digitalisation,  local and international partnerships,  technological innovations like AI and big data analytics, Nigeria’s large and culturally diverse market to facilitate its growth and contribute to the advancement of the Nigerian economy.

The report provided key recommendations to to enhance the industry’s operations, coordination, and innovation, driving its growth and development, which includes:

– Set specific GDP contribution goals

– Establish a Joint Industry Body (JIB) for coordination

– Encourage strategic alliances among industry players

– Adopt a global  approach combining international best practices with local initiatives

– Utilize analytics tools to track spending patterns and consumer behavior

“The marketing communications industry is an economic force that deserves recognition and support. By implementing these recommendations, we can unlock the industry’s full potential, drive sustainable growth, foster job creation, and cement Nigeria’s position as a leading marketing communications hub in Africa and beyond,” the report noted.