As players in the integrated marketing communications industry take stock of the business landscape in 2020, Rahim Akingbolu predicts a changing business environment in 2021.
Business and brand owners have entered the Nigerian marketing environment in 2020 with high hopes that fortune will smile upon them this year.
Last year's 2019 general election was due to fear of negative results.
In the year In January 2020, investors who hesitated in 2019 began to adapt and start trading.
At the same time, the government, as the supervisor of government institutions and the executive of the government budget, has convinced the business world of the enviable conditions that will bring growth.
As a result, there is now an integrated marketing communication (IMC) community whose success is almost certainly dependent on the success of other sectors. However, in February, negative signs emerged against the backdrop of the global pandemic that has since paralyzed the world economy.
"New Normal"
In the year In March 2020, the wave of Covid-19 spread to various countries, forcing countries including Nigeria to close down cities and businesses. This phenomenon immediately threw players in the marketing communications industry off balance, as most of them relied on external structures and large numbers of people for their business. To make matters worse, brand owners who are key customers have announced that they have decided to reorganize their marketing spend in response to the Covid-19 pandemic.
According to today's inspection, several banks and multinational companies in the FMCG sector have failed to report the economy to their institutions to assess their business relationships.
To reach their target audience, companies have been able to adapt quickly by using new platforms such as digital marketing, radio and television to reach consumers who stay at home.
At the time of the shutdown, Coca-Cola, a major international beverage company, suspended any brand advertising indefinitely, a major economic downturn.
Stating that the launch was necessary in light of the needs and demands of the time, the company said it would like to continue to focus on the safety and security of its people and society.
Loss of job and business
As the shutdown continues, workers at major offshore companies and pilot agencies fear for the safety of their jobs. In the blink of an eye, dozens of agencies were shut down and many of their employees returned to work.
Speaking on the development, the Head of Experimental Marketing Agency of Nigeria (EXMAN), Tade Adekunle, admitted that the industry is going through tough times as clients have postponed most of their projects. However, the number of people who lost their jobs during the New Year holidays remained silent.
Unfortunately, the shutdown has affected our business for the global pandemic cure as all projects have been extended. The fact that the year was coming to an end hit many of us when the pandemic hit. ... creates a threat.
The head of EXMAN acknowledged that post-Covid-19 will bring its own challenges and that it will not be business as usual to ensure everyone stays safe and hopeful due to the second wave of the pandemic.
“There is no denying that there are still challenges ahead of us, especially in our area of practice, either again or partially.
"There is no doubt that consumer spending will decrease, which will affect the income of most of our customers. In order to survive in 2021, we need to rethink our thinking skills and come up with bright ideas so that consumers can continue to find the brand regardless of cultural differences. And now is the time to think."
Another medical expert and CEO of GDM Experiential Company Limited, Victor Avolabe, expressed concern that if the crisis continues, the pandemic and the economic downturn could curb budget spending for the market due to business restructuring. .
However, when companies struggle with raw material shortages, marketing budgets can generally be constrained. There is also low consumer spending and weak demand. As it stands, the problem is not limited to pilot agencies, but across the entire marketing industry, including advertising.
“If global problems continue, all sub-sectors of the marketing communications industry will eventually suffer.
"However, as far as the experience is concerned, it can be transferred to other people if the agency managers do not find creative and new ways to engage consumers without direct contact," he said.
Afolabi also predicts that by 2021, digital will become the primary interaction channel.
Overview
There is general agreement among experts that 2020 will be a special year for many marketing communications and traditional media agencies, as many are struggling in a challenging operating environment that is forcing them to rethink their strategy and operating models.
Bad experiences have also forced many traders to pay half of their workers' wages.
Absolute PR CEO Akonte Eki called 2020 an amazing year. He said that everything that happened in 2020 was not scripted and was against basic norms or rules.
In one year, "the idea of moving people became dangerous and we agreed to work from remote locations to digital parties. This was a year that presented technology as an absolute necessity for our society to interact with each other, from business to communication."
The effects of the Covid-19 pandemic and EndSARS on the economy and trade relations are part of the economy; It also determines the level of influence on the sub-sector, Aconte said.
"How many companies are actively campaigning or engaging with consumers throughout the year? Marketing activity for many companies outside of technology, finance and banking is very low. Covid-19 has shaped and driven behavior and behavioral conversations in 2020," Aconte said.
The effects of the Covid-19 pandemic and other negative factors such as the definition of EndSARS 2020 have changed the previous optimism curve.
Nigerians are full of optimism for 2020. This was 2.55 percent in the fourth quarter (Q4) of 2019 in GDP growth, after slowing down to 2.10 percent, 1.94 percent, and 2.28 percent in the first, second, and third quarters of 2019, respectively.
The National Bureau of Statistics (NBS) said fourth quarter growth was the highest quarter since the 2016 recession.
The oil price war between Russia and Saudi Arabia began in March 2020 over production, exports and oil prices, as governments and companies braced for expected gains in the economy as the 2020 budget was based on $57 a barrel. Crude oil. . Oil.
Experts explain that a price war is a competitive tactic designed to deliberately lower prices to weaken competitors. When this happens, other manufacturers have to cut prices to stay competitive, says KVB Prime, "and the cycle often leads to one or more problems with logistics until the next prices drop to levels too low to be sustainable." Parties."
A price war exacerbated by the Covid-19 pandemic has pushed Nigeria's crude oil prices below $30 at $57/bbl. These developments began to have a negative impact on income and the functioning of the economy.
Struggling companies are starting to cut their marketing communications budgets by as much as 50 percent, and that equates to cutting or halving their staff at marketing agencies.
Earlier this year, the President of the Outdoor Advertising Association of Nigeria, OAN, Emma Agofo, admitted that many industrial workers are being paid half of their wages, saying it is better than pushing workers into the labor market, especially in these tough economic times. situation. time. The unemployment rate in Nigeria is around 27.1 percent of the population and is expected to rise to 33.5 percent.
Many marketing communication agencies, including public relations agencies, creative advertising agencies, offline operators and event organizers, experience poor customer service.
During the months of the lockdown, many companies have suspended programs and product launches following guidelines aimed at curbing the spread of Covid-19.
Ajufo also said, "Clients who rely on eyeballs to display promotional materials have been forced to cancel screenings and contracts due to the Covid-19 lockdown." He said the industry has lost several million naira this year.
2021 and forecast
Top industry executives speaking today have warned brand owners to avoid introducing other products, despite the industry's future hanging in the balance as the country's economy plunges into its second recession in five years in 2021. Marketing support services. .
In addition, some experts predict that political activities will start this year with the 2021 Anambra, Ekiti and Osun governorship elections 2022 and 2023 to stimulate the market.
In addition to the fact that political income can reach unregistered institutions, most of the business this year will be in this region. In March, politicians vying for governorships in Osuna, Ekiti and Anambra began political shopping. "Last quarter, preparations for the 2023 presidential election also started, which will attract publicity," said one of the experts, Bayu Adeosun.
Meanwhile, ahead of 2021, the President of the Advertising Agencies Association of Nigeria (AAAN), Steve Papiko, has urged marketing communication professionals to adopt the scouting motto of “Be Prepared” as the new year approaches.
While the AAAN president acknowledges that navigating the business environment at this time can be difficult, he is optimistic that brand owners will continue to work closely with marketing communications agencies to keep their businesses afloat.
Dr. The Secretary of the Advertisers Council of Nigeria (APCON), Likan Fadulapu, agreed that the economic downturn may force some companies to cut spending on research and advertising in 2021, but he was quick to say that some smart companies would benefit from it. Give them points of visibility in advertising, public relations and other marketing departments.
"During an economic downturn, it may seem logical for companies to cut costs because savings are more important than spending in such times. But, on the other hand, when companies cut advertising costs, it is rarely seen by the public. Know the opportunities that stability can bring.
"When competitors reduce their marketing efforts, companies can stand out in front of their target market by maintaining strong advertising campaigns during an economic downturn. Perhaps there has never been a better time to advertise, because more people want to spend less money. So a company can promote and maintain awareness by promoting aggressive advertising during an economic crisis." It also increases market share with a strong brand image, Fadolopo said.
