The Nigerian advertising industry is set to reach an estimated N893 billion by 2028, according to a new report by PricewaterhouseCoopers (PwC).
The report, commissioned by the Advertising Regulatory Council of Nigeria (ARCON) and funded by various industry associations, aims to highlight the advertising sector’s contribution to the nation’s GDP, its value, and its multiplier effect.
The findings were presented at a stakeholders’ meeting on Tuesday, the News Agency of Nigeria reported(NAN).
Currently, Nigeria’s advertising industry contributes an estimated N605.2 billion to the nation’s Gross Domestic Product (GDP). Dr. Femi Adelusi, Chairman of the Multiplier Study Committee, detailed the sector’s significant impact on economic growth during the meeting.
“The marketing communications sector has emerged as a formidable economic powerhouse,” Adelusi remarked. “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.”
Adelusi highlighted that the total expenditure on marketing communications reached N605.2 billion in 2023, reflecting a compound annual growth rate (CAGR) of 18.7% over the past six years, up from N216 billion in 2018.
This growth trajectory is projected to continue, with spending expected to reach N893 billion by 2028. Consequently, the industry’s contribution to Nigeria’s GDP is anticipated to rise from 0.7% in 2023 to 1.08% by 2028.
Sector Insights
Tunji Adeyinka, Chairman of the National Advertising Conference, elaborated on the origins of the study. He explained that the 2022 conference identified a gap in understanding the industry’s GDP contribution, prompting the decision to engage PwC for a comprehensive assessment.
The report examines both the direct monetary contribution of the advertising industry to the GDP and its broader economic impact.
Analyzing the industry’s segments, the report identifies the top three contributors to marketing communication spending between 2018 and 2023 as cable TV (25.5%), digital media (18.5%), and creative & content production (13.4%). “The proliferation of cable TV, driven by its diverse content offerings and affordable package options, has captivated a wide consumer base,” Adelusi noted.
“Additionally, the surge in digital media spend, fueled by increased internet and mobile penetration, as well as the rise of social media and video-on-demand platforms, has reshaped the marketing landscape.”
The study also highlighted the growing influence of creative and content production, which recorded a CAGR of 15.8% between 2018 and 2023.
This growth is driven by the popularity of smartphones, social media engagement, and the appeal of real-time online content.
Investments by video-on-demand platforms like Netflix and Amazon Prime in Nigerian productions, particularly in the thriving Nollywood industry, have further bolstered this segment.
What you should know
The study outlined key recommendations to accelerate the industry’s growth and development.
- These include setting specific, measurable goals for the sector’s GDP contribution
- Establishing a Joint Industry Body for operational coordination among broadcasters, agencies, and advertisers, and encouraging strategic alliances among industry players. “By implementing these recommendations, we can unlock the industry’s full potential, drive sustainable growth, foster job creation, and cement Nigeria’s position as a leading marketing communications hub in Africa and beyond.”
The ARCON Director-General, Dr. Olalekan Fadolapo, expressed optimism about the industry’s recent strides, including the launch of an Audience Measurement initiative last week.
According to him “The report, lays the foundation for us to assess the advertising space and its multiplier effect on the economy every year going forward,” Fadolapo stated. He added that the report shows the industry’s crucial role as a catalyst for consumer demand, business expansion, employment, and innovation across sectors.
