The value of the advertising industry increases to N605.2b, with a multiplier effect of N1

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 gross domestic product (GDP), revealing its value and multiplier effect.

Speaking at the unveiling of the report by Price Waterhouse Coopers (PwC), ARCON CEO Dr. Olalekan Fadolapo expressed optimism over recent advances in the industry, including the launch of an audience measurement initiative.

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

Strongly emphasizing the need to quantify the size and impact of the industry as an economic driver, Fadolapo stated: “We cannot continue to judge the size of the industry. This report provides us with a basis for assessing advertising space and its multiplier impact on the economy in the future.”

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

As part of the steps taken by ARCON to accelerate the development of the industry, he said that in addition to the report on audience measurement and GDP multiplier effect, the apex regulatory body will also organize an event on the bold rebranding project of Nigeria, which it has undertaken alongside other projects as part of the resolutions arising from the announcement of the National Conference Ads.

Chairman of the National Advertising Conference, Tunji Adeyinka, provided context on the genesis of the study. He explained that the 2022 conference highlighted a gap in understanding the industry’s contribution to GDP, prompting the decision to engage PwC to conduct a credible assessment. He went on to say that the report examined two key aspects: the advertising industry’s direct financial contribution to GDP and its multiplier effect – the increased impact of advertising investments on overall economic performance.

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

He said: “The marketing communications sector has become an economic powerhouse. “The study estimates that every N1 spent on marketing communications in Nigeria increases the country’s GDP by a staggering N16.5 – a multiplier effect that highlights the industry’s significant value contribution.”
According to the study, total marketing communications expenditure reached an impressive N605.2b in 2023, growing at a remarkable compound annual growth rate (CAGR) of 18.7% over the past six years compared to N216b in 2018.

This trend is expected to continue, with expenditure reaching N893b by 2028, making a significant contribution to Nigeria’s GDP at 1.08%, up from 0.7% in 2023.
Analyzing industry segments, he revealed that the top three sources of marketing communications spend from 2018 to 2023 were cable television (25.5%), digital media (18.5%), and creative and content production (13.4%).

Industry leaders present at the event included: EXMAN President, Ms. Tolulope Medebem; Vice President of MIPAN, Ms. Brenda Nwagwu; President, AAAN, Mr. Steve Babaeko; Kenny Ogungbe of BON and the President of OAAN, among others, Mr. Sola Akinsiuku.
According to them, the study results have indeed created a wave of excitement in the industry as stakeholders recognize the enormous opportunities that lie ahead.