Scale-down of marketing activity by firms hurts media agencies
Marketing communication industry is really reeling under difficult economic weather as the operators clients in various sectors have scaled down marketing activities, equally occasioned by tough times.
Presently, companies are grasping and groaning under rising operations cost and spiraling administrative expenses as the economy of Africa’s most populous nation slides into recession. This is in addition to weakening consumer purchase and erratic electricity supply which have made them to trim their marketing communication budgets.
“Nothing much is happening among media agencies now as most of our clients have stopped implementation of some jobs. In fact they have scaled down activities and this is affecting us”, a source in the industry told BusinessDay.
The effect of the tough time is evident in all the sectoral arms of the marketing communication industry including Out-of-Home industry, PR and creative advertising sections as operators have either downsized workforce or owe salaries.
The economic effect is manifesting on the increasing vacant billboards especially in Lagos zone. A drive in major attractive areas in Lagos indicates that the hitherto busy and advertisement-occupied billboards were now empty suggesting cut down by clients.
If South West alone which generates over 70 percent of the billboards advertising revenue would be experiencing these terrible vacant boards, this is a sign that the industry is really chocked, an analyst said
As the harsh economy bites, a top PR agency, The Quadrant Company, recently downsized as it laid off about 13 of its staff.
Sources could not explain the reason for the sack, but it is linked to the harsh economy which has affected most businesses. The agency had last year lost lucrative Etisalat PR account to Chain Reactions managed by Israel Opayemi.
Speaking at Outdoor Advertising Association of Nigeria, OAAN award recently, the president of the association, Tunde Adedoyin acknowledged that cut in marketing budgets by clients has combined with other factors such as revenue loss due to multiple tax by some states, cut throat discount by advertisers, indiscriminate and regulatory taxes, charges on unoccupied billboards, delay payment by advertisers and government agents refusal to pay for services to frustrate the industry.
“Because we are losing businesses, our employees are at the verge of also losing their jobs and one of the multiplier effects of the emerging scenario is that the already populated unemployment environment will become more challenged”, he said.
Speaking at the same venue, Biodun Shobanjo, the chairman of Troyka Holdings, who assessed the tough times motivated the operators in the industry to rethink, redefine the industry, fight their course and create mega firms through mergers and acquisitions in order to stay afloat.
Daniel Obi