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Pandemic: Industry practitioners rethink business for survival

by Goddy Ofose
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For Ayobami Babatunde, an integrated marketing communication consultant in Lagos, 2020 was the most difficult year for the advertising industry. The integrated marketing communication industry comprises core advertising, experiential marketing/brand activation, public relations, brand management, outdoor advertising, digital advertising and media buying and selling.

The 2020 began well for brands that launched into the market earlier. Some marketing activities had commenced for several brands and products. Organisations such as MTN, Nigerian Breweries, Airtel and Glo had launched thematic and/or tactical campaigns.

However, the high hopes the year 2020 presented was suddenly thrown into the state of despair as Coronavirus pandemic hit the nation in early March of 2020. Several organisations called in to halt or out rightly cancel their planned marketing activities.

Marketing thrives when people come together. The worst hit were fast moving consumer goods segment particularly, the alcohol beverages as government issued several guidelines hitherto, shutting down hotels, bars and restaurants nationwide.

According to EMarketer, overall ad spending will decline by 4.9% worldwide this year, a significant drop from last year’s 6.3% growth and from our pre-pandemic 2020 forecast of 7.0% growth. The total figure will come in at $614.73 billion, which represents $76.99 billion less new revenues than previously expected.

Industry practitioners believed that worldwide digital ad spending will achieve 2.4% growth this year, the lowest on record. Although this figure is still positive, the category has never been in single digits. The $332.84 billion total for 2020 represents $36.11 billion less spending than our pre-pandemic forecast.

On the ad spending compare with search, EMarketer said, “Idiosyncratic outcomes associated with the Coronavirus’ social impact have hindered the search ad business more than the display ad business. We estimate that globally search ad spending will decline by 0.2% this year to $135.25 billion, whereas display spending will increase by 5.3% to $179.39 billion.

In Nigeria, while 2020 was lost on COVID-19, industry watchers stated that 2021 was going to be better than last year; however, the trend so far, has continued to pose a threat for the survival of several fast moving consumer goods and agency business in Nigeria as government continued to encourage individuals and corporate bodies to imbibe responsible behaviour.

Agencies owners have already written off the first quarter of 2021 due to the second wave of covid-19. Most points of sales have been shut across the country. This has forced several FMCGs to suspend campaigns and other marketing activities. But the telecoms have offered a little respite so far.

Speaking on the prospect of 2021 Mr. Israel Opayemi, President Public Relations Consultants Association of Nigeria (PRCAN)/CEO Chain Reactions said, “2021 will be a mixed bag of opportunities for key operators in Integrated Marketing Communications.”

For those in the Public Relations sub-sector, the money will be in advisory.  Clients will be looking up to their PR partners to help understand the minds of consumers and their stakeholders in the midst of the pandemic.

For advertising and experiential, Opayemi said, “Government will have need for the smartest social marketing campaigns to be able to convince a skeptical populace about the Covid-19 vaccines. So there will be money here for those in advertising and experiential marketing as big corporate organisations will make interventions in this area too.

PRCAN President believes that for agencies to survive the crunch year, agencies would stop looking and/or waiting for briefs but partner with clients to solve critical problems that would eventually make the agencies stakeholders rather than just agency.

“My honest opinion is that practitioners remove the agency thinking cap by not waiting for briefs to come. We have to be all out to our clients to help them spot opportunities in trends etched in this new normal,” Opayemi said.

Recently, Statista published that contrary to trends in the U.S. or Europe, where the lion’s share of ad budgets is focused on internet and TV marketing, between 2018 and 2020 the majority of advertising dollars in Nigeria will be devoted to TV and video promotion.

In developed markets internet advertising expenditures are expected to surpass TV, however, in Nigeria TV advertising is and will remain strong in the near future. The second most popular ad medium in the country is out-of-home, which is also projected to grow in the three years. Internet is ranked third based on advertising spending.

On the impact of COVID-19 on IMC, Mr. Charles O’Tudor, Lead Consultant/CEO Adstrat BMC said, “The IMC industry has gone through a “shake down “due to the covid-19 pandemic. Based on the reduced spending capacity most consumers are now very finicky in deciding what spend on.

This, no doubt, automatically affects most of the brands. This no doubt has created a reduction in the budgets of most brands. It is imperative that practitioners focus their strategies on the online platforms.

O’Tudor believes that the reduction in advertising spend would definitely create a new normal in the sector. “That no doubt would create the “new normal” in connecting with the consumers. The future is online, he said.

Some industry agencies have started refocusing their business offerings to remain relevant. For instance, the CEO of USP, Kayode Muyiwa said that “Our company has been making a strategic refocus away from the IMC business. We are therefore not focused on the industry going forward.

EMarketer predicted that Google will suffer a 3.3% loss in ad revenues this year (its first negative result since our tracking began), driven in part by a huge decline in travel-related search queries. Facebook will muddle through with 5.9% growth on the strength of its display business. This is still a significant downturn compared with Facebook’s 26.6% growth in ad revenues in 2019. Conclusively, the President of Experiential Marketers Association of Nigeria, (EXMAN), Mr. Tade Adekunle stated that It will be a challenging year because COVID-19 still roving around. “This is the time for us to put on our thinking caps to re-invent ourselves. Innovation more than ever before will be a cutting edge for survival.”

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