Despite Global Market Steady Growth, Nigeria Loses N120bn Annually in Advertising Revenue

Raheem Akingbolu

Despite fears of a recession, the global advertising market is still on track to grow 8 per cent in 2022, unfortunately, Nigeria still loses over N120 billion annually to the production of advertising, advertisement and marketing communication materials outside the country, data from media agency, Zenith has revealed.

According to Zenith, global advertising spend is on track to grow by 8 per  cent in 2022, buoyed by mid-term election activity in some parts of the world and major sporting events, especially 2022 World Cup.

In contrast to this possible global boom, the Advertising Regulatory Council of Nigeria (ARCON), has disclosed that the local industry is declining in revenue as a result of foreign infiltration.

Its Director-General, Dr. Olalekan Fadolapo, stated this in a signed statement titled, “ARCON to compel minimum of 75 per cent cumulative local content in advertisements targeted at the Nigerian market.

He said: “This has continuously led to loss of jobs in the industry, retarding the growth and development of the Nigerian advertising industry. The current efforts of the Federal Government aimed at job creation, inclusive growth and development of various sectors of the economy are negatively affected by this trend which if not regulated, will lead to continuous decimation of the Nigerian Advertising Industry.

“In line with Section 8[1][1] of the Advertising Regulatory Council of Nigeria Act No. 23 of 2022 which empowered the Council to ensure the preservation of Nigerian local content and use of indigenous skills as an important element in advertising, advertisement and marketing communication materials and for such services directed at the Nigerian market, ARCON will commence implementation of a policy to ensure a minimum of 75% cumulative local content of all advertising, advertisement and marketing communication materials with effect from January 1, 2023.”

While revealing ways of implementing the policy, ARCON said: “The policy on a minimum of 75 per cent cumulative local content will be applicable to all advertising, advertisement and marketing communication materials directed at the Nigerian market. The following guidelines will apply: model and voice-over artist shall be Nigerian citizens, production of advertising, advertisement and marketing communication materials must be done in Nigeria, ambience should reflect Nigeria as much as possible.”

“Production crew may include foreigners. However, Nigerians and Nigerian organisations must partake in the production and post production may be done at any location [within or outside Nigeria). The new policy is to enable Nigerians and the Nigerian economy to benefit from an industry that has benefitted tremendously from Nigerians as consumers and the Nigerian economy.

“Annually, this policy will create over 500,000 new job opportunities within the advertising industry with a positive multiplier effect on the economy. Current job holders will be protected as the Nigerian advertising ecosystem will witness progressive growth. The new policy will also attract investment to the industry.

“The leakages and capital flight being experienced in the industry as a result of foreign production of advertising campaigns will be discouraged, “he said.

Meanwhile, Zenith’s latest Advertising Expenditure Forecasts report puts the global advertising growth forecast at 8.0 per cent for 2022, down slightly from the 9.1 per cent it predicted at the end of 2021, but still healthy.

Head of Forecasting at Zenith, Jonathan Barnard, said: “Price inflation is also a factor in revenue growth; television advertising has seen cost increases of between 11-13 per cent. This has in turn pushed advertisers toward digital alternatives. Online video prices – up by just 7 per cent – have attracted attention and online video and social media spending are forecast to grow by 15 per cent annually to 2024. Online video is steadily narrowing the spending gap with television, and it had been predicted that it would be half as large as television by 2024.”

Reacting to the Nigeria’s advertising regulatory body, the Independent Television Producers Association of Nigeria (ITPAN), expressed its excitement over the policy by critical stakeholders compelling a minimum of 75 per cent cumulative local content in advertisements targeted at the Nigerian market.

According to a statement signed by the National President of ITPAN, Adeyinka Oduniyi, ITPAN had long been an advocate and campaigner for urgent and critical policy interventions to save the practice and business of advertising in Nigeria.

“We are very glad that the Federal Ministry of Information and Culture, the National Assembly and the DG of Advertising Regulatory Council of Nigeria, ARCON have finally and jointly decided on a more effective regulatory framework to guide and protect the practice of Advertising and its ancillary businesses in conformity with the best practices within the global advertising community,” the ITPAN statement stated.