By Opeyemi Adebiyi
In a groundbreaking report unveiled today, the Advertising Regulatory Council of Nigeria (ARCON) revealed that the country’s advertising industry has experienced a remarkable boom, contributing a staggering ₦605.2 billion to the nation’s economy in 2023, with a multiplier effect of ₦1 to ₦16.5. This significant growth, announced at a media briefing in Lagos, was attributed to the industry’s 18.7% annual growth rate since 2018, with projections indicating a further surge to ₦893 billion by 2028, equivalent to 1.08% of Nigeria’s GDP. According to ARCON’s Director General, Dr. Olalekan Fadolapo, this unprecedented growth is a testament to the industry’s resilience and creativity, and highlights its crucial role in driving economic development.
The report reveals that the marketing communications sector significantly drives economic growth. Dr. Femi Adelusi, Chairman of the Multiplier Study Committee, disclosed that every ₦1 spent on marketing communications increases Nigeria’s GDP by ₦16.5. The sector’s total expenditure reached ₦605.2 billion in 2023, with a compound annual growth rate (CAGR) of 18.7% since 2018. Projections indicate that spending will rise to ₦893 billion by 2028, contributing 1.08% to Nigeria’s GDP, up from 0.7% in 2023.
Breaking down the industry’s segments, the report identifies cable TV (25.5%), digital media (18.5%), and creative & content production (13.4%) as the top contributors to marketing communication spend between 2018 and 2023. The growth of cable TV is attributed to its diverse content and affordable packages, while digital media’s rise is driven by increased internet and mobile penetration, social media, and video-on-demand platforms. The creative and content production sector has also grown significantly, bolstered by investments from platforms like Netflix and Amazon Prime in Nigerian productions, particularly Nollywood.
Despite facing challenges such as economic pressures, regulatory reforms, and global competition, the study highlights the industry’s strengths. These include rising digital trends, opportunities for local and international partnerships, and the potential to leverage technological innovations like AI and big data analytics, and Nigeria’s large and culturally diverse market. The study suggests the industry can accelerate growth by setting measurable goals for GDP contribution, establishing a Joint Industry Body for better coordination, encouraging strategic alliances, and adopting a global approach with local initiatives.
Industry leaders praised the study as a pivotal move for the sector. Prominent figures like Mrs. Tolulope Medebem, President of EXMAN, Mrs. Brenda Nwagwu, Vice President of MIPAN, Mr. Steve Babaeko, President of AAAN, Kenny Ogungbe from BON, and Mr. Sola Akinsiuku, President of OAAN, acknowledged the immense opportunities highlighted by the report. The findings have generated excitement within the industry, as stakeholders recognize the sector’s potential to catalyze economic activity, spur innovation, and create employment opportunities.
The event also had question and answer sessions from the various media representation and Industry Experts. Thus, addressing the industry’s various tax-related challenges from questions asked, the ARCON Director General, Dr. Fadolapo, elaborated on issues with withholding tax, value-added tax (VAT), and transfer tax. He stressed the importance of understanding these tax implications for the overall economy. The future study will delve into these areas to evaluate the industry’s tax contributions comprehensively.
Furthermore, Dr. Fadolapo highlighted the necessity of assessing the industry’s size and its contributions. Clear communication of these aspects is crucial when engaging with stakeholders. He assured that all contributions and feedback would be considered in future reviews.
In conclusion, the PwC report marks a significant step forward in understanding and leveraging the economic power of Nigeria’s advertising industry, setting the stage for sustainable growth and positioning the country as a leading marketing communications hub in Africa and beyond.
