Outdoor’s failure to respond to consumer changing experience hits industry hard
Inability to respond to market dynamics and consumer changing experience has put the multi-billion naira Nigeria’s outdoor industry in a precarious situation with the operators feeling the heat.
The plethora of vacant billboards as a result of pull-back by clients coupled by recession is indicative of the hard times for the once active industry. Analysts said the industry has lost over 50 percent of its business in the last one year which has also caused the operators to downsize workforce.
Emeka Okeke, CEO of Media Fuse Dentsu Aegis Network, an integrated marketing communication agency, said operators in the outdoor industry still structured their business in wholesale routine, asking clients to pay lumbsum even in recession when the market has shifted to retail method due to the economic difficulties and in an effort to reach more audience with fewer budgets.
Okeke acknowledged that outdoor operators have over time made significant investments in their business to serve clients but believed that with heavy Ad cost on LED outdoor, advertisers could get multiple views on other channels.
“Many clients are cutting cost and searching for cheaper marketing channels that would deliver the same eye-balls. It is not only outdoor that is hard hit, presently TV is suffering and losing to digital platforms” he said.
Late last year, the President of Oudoor Advertising Association of Nigeria, OAAN Tunde Adedoyin told BusinessDay that business for the industry has been very bad. He said that judging from OAAN members’ indications and complaints, about 50 percent of businesses have been lost in the last one year due to recession, increasing strict government regulations and tariff restrictions.
Adedoyin who is president of about 80-member OAAN estimated that the struggling industry had actually recorded further declines in its billings on account of cancellation of contracts by advertising companies and outright non-patronage resulting in plethora of vacant billboards around major cities in Nigeria.
Further assessing the impact of recession, low naira value to the dollar and scarcity of forex on production of adverts overseas, Emeka Okeke said some companies have resorted to editing of adverts produced abroad to fit local content.
Expressing the same view on outdoor business, the CEO of Fuel Communication, Tunji Ajiboye said with the rationalization of marketing budgets clients presently compare prices and reach of Ad messages even if they were given unit costs on LED screens by outdoor operators which they still believe is expensive.
With economic difficulties biting firms hard, a development that has thrown up innovations, Tunji advised outdoor operators to sit and re-strategise on how to offer clients service on retail basis in order to stay in business. “They should go for less expensive formats”. He recalled how FMCGs have started producing small satchet of beverages for consumers.
On production of adverts abroad, Tunji said some of the TVC campaigns are dependent on local ideation. But what happens is that some foreign agencies come to Nigeria to shoot their clients’ adverts, then take the work abroad for post editing before returning them to Nigeria for telecast on TVs.
The President of Association of Advertising Agencies of Nigeria, AAAN, Kayode Oluwasona told BusinessDay that in a time like this, the logical thing for the clients to do is to look inwards. “At the time of scarcity of foreign exchange, they should substitute forex- loaded expenses with naira loaded activity to keep business afloat. Now some clients are going that direction of local alternatives”, he said.
Though Oluwasona could not estimate how much Nigeria is saving in the new trend of looking inwards in advertisement production but said “it is really saving Nigeria a lot of money. We should desist from thinking foreign , it is killing us”, he said.
On the entry of big global media agencies to Nigeria through affiliations which is creating business realignment, media analysts said it is bound to happen but warned that Nigerian partners should ensure that they don’t lose out in the deals.
Analysts said big global agencies are really having massive influence and control over Nigeria’s media operations as they determine who gets multinational businesses in the Nigerian market and other emerging economies on account of global realignment.
“They are using these affiliations and realignments to understudy Nigeria and take briefs and where they don’t have affiliations, they hire”, says an analyst. Nigeria, the biggest market in Africa has a big growth opportunity globally for multinationals.
“The media business accounts change hands in the local market the moment the multinational companies who have deep purse for marketing communication transact media business with another agency globally and this has effect in Nigeria as the affiliate agencies subsequently get the business without pitch
Presently, it is only those Nigerian agencies that have relationship with the global giant agencies that get the juicier accounts while many others struggle to gain accounts of few local companies some of whom don’t have deep advertising budget or don’t advertise at all.
Daniel Obi