Marcom Industry: Grappling with Growth amidst Industry Reforms

In this report, Raheem Akingbolu reviews the activities in the Marketing Communications industry in 2022 and concludes that most early generation agencies are fast going into extinction, while the Advertising Regulatory Council of Nigeria is struggling hard through various reforms to reposition the industry

At the 2022 National Advertising Conference held early this month in Abuja, stakeholders in the marketing communications industry unanimously agreed that the industry they so much treasured was in distress. One after the other, heads of sectoral bodies and some experts dissected various challenges facing marketing communications in the country and tried to proffer solutions. Some of the speakers include; the President of the Experiential Marketers Association of Nigeria (EXMAN), Tunji Adeyinka; President of the Advertisers Association of Nigeria, (ADVAN), Osamede Uwubanmwen; President of the Association of Advertising Agencies of Nigeria (AAAN), Steve Babaeko; the representative of the President of the Outdoor Advertising Association of Nigeria (OAAN) and of course the Director General of Advertising Regulatory Council of Nigeria, (ARCON), Dr. Olalekan Fadolapo. 

 Top among the issues raised and deliberated upon was how the industry would lobby the Federal Government to push through various regulatory reforms embarked upon by ARCON in the year under review to save the industry from total collapse. Some of the policies are; the ban of foreign models in media advertisement, local enquiry on investment, promoting equity and fairness within the ecosystem, among others, as ways of growing the media and advertising ecosystem in the country.

Fadolapo, who spoke to THISDAY at the sideline of the conference opined that the marketing and advertising management industry in Nigeria was inspired by some facets of individuals, while stating that, the decline of the industry prompted the need to find resolutions to problems facing the industry.

To this end, he called on the Federal Government to take urgent steps at reviving the declining advertising sector in the country noting that if no proactive measure is taken, the industry would remain in limbo. 

He noted that the sector is distressed and threatened by foreign incursion while urging President Muhammadu Buhari to streamline and restore confidence in advertising practices in Nigeria.

According to him, this year’s edition of the advertising conference has provided a framework through which fundamental changes aimed at improving the advertising sector could be made in order to possibly overhaul and reset the system.

The conference also gave the practitioners an opportunity to review the level of patronage between registered agencies and leaders of various political parties  ahead of the 2023 elections and came to the conclusion that nothing has changed as politicians still put their fate in quacks and unregistered practitioners.  

Cracks in HASG

Despite the seeming collective effort to reset the industry through effective regulation, THISDAY findings have revealed that the subtle war among the Heads of Advertising Sectoral Groups (HASG) could be a stumbling block. While OAAN, EXMAN and AAAN are on the same page, ADVAN, which is the body of the decision makers in the various local and multinational companies, has consistently opposed ARCON and its reviews. Since October 2021, ADVAN has not hidden its discomfort towards the implementation of the new Code of Conduct titled Advertising Industry Standard of Practice (AISOP). In a statement issued after the unveiling of AISOP, ADVAN rejected the implementation of the new code introduced by the Advertising Practitioners Council of Nigeria (APCON).

According to the association, the provisions of the framework “make an unconstitutional attempt to infringe on the rights of private entities to determine their contractual terms.”

The body has maintained that AISOP and other such reforms do not serve the collective interest, but rather permits unfair treatment of certain parties over others and creates an unfriendly business framework.

Though a lot of window-dressing measures have been taken to pacify ADVAN, the body language of its leaders still speaks volumes of the body’s opposition. According to an investigation carried out by this reporter, ADVAN’s Osamede Uwubanmwen had threatened a walk out with his colleagues during a recent peace meeting, a situation that has since created a split in HASG. 

Reacting to the crisis rocking HASG recently, Uwubanmwen told a selected journalists at the association’s end-of-the-year press parley recently that the body is in the forefront of seeking a marketing communications industry that is good and fair to everyone while helping to shape the economic policies of the government. 

Billings and Leading Agencies

But for various award institutions that generously doled out the Lifetime Achievement Awards to some of the first indigenous advertising and Public Relations practitioners in 2022, the name of many wave-making marketing agencies a few years ago would have either been forgotten or remain relevant only in academic exercise. For instance, the roll-call of agencies at the 2022 edition of the Advertising and Ideas Festival (LAIF) Awards didn’t include most of the so-called billion billings agencies of the yester years. In particular, the fact that Insight Communications stayed away from the award after putting in entries and met all financial obligations set tongues wagging. Analysts believed the development was clear evidence that all is not well for Insights, performance wise. 

As at today, billion-naira billing agencies that appeared to have totally gone into comatose include, LTC-JWT Nigeria, Rosabel Advertising Limited, Lowe Lintas, Grant Advertising Limited, OBM Advertising Limited and many others. There are others that are only existing on papers without a single business but their owners are still being celebrated for their contribution to industry growth and grooming of the new set of ‘boys’ running the industry. 

While record has shown that Insight Communications is still among the top five in the billion naira billing bracket,  Noah’s Ark, X3M Ideas and two other agencies are giving it a run for its money. Other top agencies that competed well in 2022 are; MediaFuse Dentsu International (Nigeria), a media buying agency, Nitro 121 and little known Imaginitrium and The Hook, an agency that came to limelight with the 2019 ‘O to Ge’ campaign in Kwara. With the MTN account residing in DDB, the agency is still pulling the strings. Perhaps SO&U could have been a contender but for its loss of the Glo account.  There is also a case of a second generation agency (name withheld) that is currently grappling with the Asset Management Corporation of Nigeria (AMCON), over 2.5 billion debt that pitched the agency against one of the new generation banks a few months ago. 

In the Public Relations cycle, where volume of business dictates rating, Black House Media, CMC Connect, Strategic Outcomes, Indigo, Chain Reactions, Hill+Knowlton Strategies, Media Edge and Brooks & Blakes have pushed older agencies like The Quadrant Company, C&F Porter Novelli and others into the back seat. For experiential business in 2022, Idea House and Oracle Experience are still in the forefront with mouthwatering accounts. 

Speaking on why some of the top old agencies are going down with little or no clients to sustain their operations,  some analysts who spoke to THISDAY blamed the problem on poor succession plan and lack of invention. 

Brands

MTN Nigeria Plc achieved further accelerated growth in sales revenue from N471 billion in the first quarter, N479 billion in the second and N506 billion in the third, which add up to N1.46 trillion turnover for the telecommunications company in the nine months of operations in 2022.

This marks a rebound in quarterly revenue numbers for the company after a slowdown in the second quarter from 22 percent growth in the first quarter to 18 percent and pushing back to 22 percent in the third quarter.

For the third quarter, Q3, ended September 30, 2022, United Bank for Africa (UBA) Plc, announced remarkable performance in its unaudited financial results recording impressive growth in its gross earnings by 23.3 per cent to N608 billion from N493 billion recorded in the corresponding period, September 2021, Q3’21.

The Bank’s operating income also grew by 27.3per cent to close at N414.1 billion as at September 2022, up from N334.8 billion achieved a year earlier.

For FirstBank, a subsidiary of the behemoth FBN Holdings Plc, the 2022 operation year has been characterised by a superlative performance which analysts believed signposts the confirmation of the bank’s return to the frontline of the Nigerian banking industry following its 2021 equally stellar performance. 

From its half-year 2022 reports, which show a remarkable turnaround, and the ability of the management of the bank not only to resolve old corporate governance issues but to also return the bank to the path of profitability, it has been proven beyond any reasonable doubt that FirstBank has freed itself from old encumbrances and it is back to its old trajectory of breaking boundaries and being a pacesetter in the Nigerian banking industry.

At the Standard Chartered Nigeria, what appears like a parting reward for excellence service in 2022 was the clinching of the ‘Outstanding Use of Technology in Cash and Liquidity Management’ award and the Best Bank for Trade Finance in Nigeria award from Global Transaction Banking Innovation Awards 2022 (GTB22). The bank successfully edged out other several financial service institutions to emerge winner. 

Despite all the odds and the Central Bank of Nigeria (CBN) announcement of 100 per cent divestment of government ownership of Polaris Bank to a new core investor, Strategic Capital Investment Limited (SCIL), analysts are optimistic the bank will continue on the trajectory of growth.

Recently, SCIL paid an upfront consideration of N50 billion to acquire 100% of the equity of Polaris Bank which has performed relatively well making profit year-on-year from its first year of operation.

Speaking on the divestment, a business analyst, Chika Mbonu who spoke on Arise TV commended the management of the bank for leading a successful transition while urging the core investors (SCIL) to take the financial institution to the next level

First City Monument Bank, a member of the FCMB Group Plc, led the list of best-performing commercial banks in the third quarter of 2022, according to Nairalytics Research. The bank’s holding company sustained its impressive half-year 2022 record of 73.2% growth in profit by landing a 68.4% year-on-year profit before tax growth by the nine months ended September 30, 2022.

Highlights of the Group’s unaudited nine-month results released on the floor of the Nigerian Exchange Limited (NGX) showed double-digit growth across all business segments: Banking Group 74.8 per cent, Consumer Finance 30.8 per cent, Investment Management 47.1 per cent, and Investment Banking 220.9 per cent.

The diversified Group’s gross revenue grew by 33.9 per cent to 200.1 billion for the nine months that ended September 2022, compared to 149.5 billion in 2021.