Advertising industry value grows to N605.2b, multiplier effect at N1 to N16.5 — New report

A new report commissioned by the Advertising Regulatory Council of Nigeria (ARCON) but funded by industry associations has shed light on the advertising sector’s contribution to the nation’s Gross Domestic Product (GDP), revealing its value and multiplier effect.

Speaking at the unveiling of the report carried out by Price Waterhouse Coopers (PwC), ARCON Director General, Dr. Olalekan Fadolapo expressed optimism about the industry’s recent strides, including the launch of an Audience Measurement initiative.

He thanked the sectoral groups including the Experiential Marketers Association of Nigeria (EXMAN), Association of Advertising Agencies of Nigeria (AAAN), Outdoor Advertising Agencies of Nigeria (OAAN), Media Independent Practitioners Association of Nigeria (MIPAN) and the Broadcasting Organisation of Nigeria, (BON) for funding the study.

Strongly emphasising the need to quantify the industry’s size and impact as an economic enabler, Fadolapo stated: “We cannot continue to guesstimate the size of the industry. This report lays the foundation for us to assess the advertising space and its multiplier effect on the economy every year going forward.”

He added that findings of the report underscore the industry’s paramount role as a catalyst for consumer demand, business expansion, employment, and innovation across sectors.

As parts of strides that ARCON has undertaken to advance the growth of the industry, he said that in addition to the Audience Measurement and the GDP Multiplier effect report, the apex regulatory body is also set to hold an event on the audacious rebrand Nigeria project that it had undertaken alongside other projects as part of resolutions from the communique of the National Advertising Conference.

Chairman of the National Advertising Conference, Tunji Adeyinka, provided context on the study’s genesis. He explained that the 2022 conference highlighted a gap in understanding the industry’s GDP contribution, prompting the decision to engage PwC for a credible assessment. He further said the report examined two key aspects: the advertising industry’s direct monetary contribution to GDP and its multiplier effect – the amplified impact of advertising investment on overall economic output.

In his presentation, Chairman of the Multiplier Study Committee, Dr. Femi Adelusi, revealed the profound impact of Nigeria’s marketing communications industry on driving the nation’s economic growth.

He said: “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.”
According to the study, the total expenditure on marketing communications reached an impressive N605.2b in 2023, having grown at a remarkable compound annual growth rate (CAGR) of 18.7% over the past six years, from N216b in 2018.

This trajectory is projected to continue, with spending expected to reach N893b by 2028, contributing a significant 1.08% to Nigeria’s GDP, up from 0.7% in 2023.
Dissecting the industry’s segments, he revealed that the top three contributors to marketing communication spend between 2018 and 2023 were cable TV (25.5%), digital media (18.5%), and creative & content production (13.4%).

Among industry leaders at the event were President, EXMAN, Mrs. Tolulope Medebem; Vice President, MIPAN, Mrs Brenda Nwagwu; President, AAAN, Mr. Steve Babaeko; Kenny Ogungbe from BON and President, OAAN, Mr. Sola Akinsiuku, among others.
According to them, the study’s findings have indeed sent ripples of excitement through the industry, as stakeholders recognize the immense opportunities that lie ahead.